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Notes to Accounts of HMT Ltd.

Mar 31, 2023

i) The Company has classified certain land & building as investment property which is not a owner occupied property.

ii) The Company has not obtained any fair valuation of the investment property from Registered Valuer. However, based on the guidance value, the fair value of the investment property as at March 31, 2023 is Rs.2,27,020.15 Lakhs (as at March 31,2022 Rs. 2,27,020.15 Lakhs)

iii) Land:

(a) The Company is in possession of land located at Pinjore, Kalamassery and Hyderabad gifted by the respective State Governments admeasuring 382.54 acres, 27 acres and 660.75 acres respectively, nominally valued at Rs. 1/- each.

(b) In respect of land 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 1,000 sq. yards of land, for which lease deed was executed and agreed to release another two acres of land to Telangana (formerly called as Andhra Pradesh) Postal Department in Hyderabad, the execution of sale deed is pending. The Company has obtained stay order from the Honourable Andhra Pradesh High Court, against repossession of 106 acres and 35 guntas of land by the Government of Telangana (formerly called as 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 Telangana (formerly called as Government of Andhra Pradesh), in lieu of payment of part sale consideration and issue of marketable title for the balance land.

(a) The Company owning 5.80 acres of land at Bangalore which is classified as Assets Held for Sale, is pending for hearing with the Hon''ble Supreme Court of India due to Government of Karnataka filing an Interlocutory Application (IA) during the year 2020-21. The same shall be dealt upon final outcome of the case.

(b) In line with the approval of Government of India, the Immovable Assets of HMT Watches Ltd (under closure) have been transferred to HMT Limited at the book value of Rs.296.06 lakhs during the year 2022-23, the rights of transfer of immovable assets have been assumed by the Government and HMT Limited is the custodian of these properties till their disposal and ensure the transfer of the sale proceeds to the Government of India after deduction of applicable expenses and taxes.

(c) The Company is in possession of gift land located at Bangalore admeasuring 89.74 acres of which 7.0 acres of land has been encroached upon and the matter has been taken up with the Government of Karnataka to shift the un-authorised occupants

(d) The Company has allowed possession of land measuring 45.622 acres and received entire sale consideration of Rs.7202.10 lakhs and is pending for registration.

(e) The sale proceeds from the above stated land should be transferred to Government of India after incurring applicable taxes.

1.3.5% Preference Share Capital

Each Redeemable Preference Shares has a par value of Rs.100/- per share and is redeemable after 3 years. The preference shares carry a dividend of 3.5% per annum and conversion of cumulative dividend into equity shares on accrual. The dividend rights are cumulative. The preference shares rank ahead of the equity shares in the event of a liquidation.

In accordance with the CCEA approval and DHI''s directions thereon during January 2016, 3.5% Redeemable Preference Shares of 4,06,14,000 no''s (Rs.40,614.00 lakhs) out of 4,43,00,000 no''s of Rs.100/- each (Rs.44,300.00 lakhs) has been extinguished and set off against the Loans and advances to subsidiaries companies provided by the Company to HMT Watches Limited, HMT Chinar Watches Limited and HMT Bearings Limited.

For the remaining 3.5% Redeemable Preference Shares the revival Plan sanctioned to the Company vide sanction No F.No.5.1(1)/2005.PE.X dated 29 March 2007 has specified for redemption of Preference Share Capital out of sale proceeds of the identified surplus assets of HMT Machine Tools Ltd. Since the sale of identified assets has not taken place which is pre-condition for redemption, remaining 3.5% Redeemable Preference Share Capital is not redeemed.

(Rs. in lakhs)

Particulars

As at

31-Mar-23

As at

31-Mar-22

33 Contingent Liabilities

Claims against the company not acknowledged as debt:

a)

Tax related claims pending in appeal i) Sales Tax

53.64

ii) Income Tax

37.92

-

b)

Non receipt of related Forms against levy of concessional Sales Tax

-

3.22

c)

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

52.64

52.64

d)

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

4,154.95

4,173.55

e)

Various legal cases relating to employees and other contingent liabilities pertaining to HMT Watches Ltd (Ref: Note No.52)

9,896.80

f)

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

23.89

23.89

g)

Guarantees and Counter Guarantees and LCs issued [(including Rs.9454.00 Lakhs and Rs.8018.00.lakhs (previous year) against Corporte Guarantee of Rs.12272 lakhs issued to HMT Machine Tools Ltd)]

9,649.58

8,228.18

h)

Income tax deducted at source demand under the traces software for short and non remittances of tax deduction at source - matter under examination.

79.40

75.40

i)

Disputed Lease Rentals in respect of premises occupied by the Company upto April 2010 at Jeevan Tara Building belongs to LIC of India, New Delhi.

311.77

311.77

j) Stock Exchanges have levied penalties to Company for the certain Non-Compliances under the SEBI (LODR) Regulations, 2015 like Composition of Board of Directors, Committees, delay in submission of accounts etc. As per the circulars of Stock Exchanges, listed entities are required to comply with the provisions of the Exchange circular before filing the waiver applications to the Exchange. Accordingly, in some of the cases, Company has got waiver of penalties from stock exchanges. The Company has again requested for waiver of penalties and awaiting reply from Stock Exchanges. Hence, the exact penalties amount from stock exchanges could not be ascertained

34 Other Disclosures:

(i) (a)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 and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

(ii) Other Liabilities - Advance received against sale of land represents Rs. 926.64 lakhs from M/s Raman Research Institute towards sale of land and buildings at Bangalore and Rs. 7202.10 Lakhs (including TDS) for Government of Uttarkhand (GOUK) the value of the land has been included under Noncurrent assets held for sale. Though the company has executed an Agreement to sell and possession of land given to the purchaser in respect of RRI and part possition of land to the purchaser in respect of GOUK, the transaction has not been recongised as income pending approval from the Concerned Authorities for execution of Sale Deed.

35. Preference Share Capital:

(i) 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.44,300 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.

However, as per the CCEA approval 40614000 No. of Shares has been extinguished out of 44300000 Nos. of Rs.100/- each, leaving a balance shares of 36,86,000 of Rs.100/- each which is proposed to be redeemed upon sale of immovable property.

The Company has assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the shortterm maturities of these instruments. The Company has also assessed that the Government of India ("GOI") loan excluding interest free GOI loan approximate their carrying amounts as transaction costs are not levied

The Fair Value of Interest Free Government of India Loan is arrived by discounting the loan amount for a repayment period of 5 years. For the purpose of calculation 8% is considered as the effective rate of Interest

The company has defaulted 3.5% preference shares which are already matured for redemption and hence no fair valution has been made in the accounts.

43 SEGMENT REPORTING:

As per Ind AS - 108 "Operating Segment", segment information has been provided under the notes to consolidated financial statements.

During the year Food Processing Division has made a sale of Rs.3679.63 Lakhs to one customers which exceed 10% of the revenue.

The Company has not recognised deferred tax asset on unusable tax losses in the absence of resonable certainity of future business profits.

45 Considering the realisable value of the non current assets held for sale, support from the Government of India and other business plans, the Company has prepared the financial statements on the basis of going concern and that no adjustments are considered necessary to the carrying value of assets and liabilities.

46 A charge by ID 80046855 is still open in the Index of charge on the Website of Ministry of Corporate Affairs pertains to State Bank of India. The Company has already discharged the debt of State Bank of India long back. Since the issue is almost twenty five years old, efforts will be made in co-ordination with State Bank of India for obtaining the necessary documents for satisfaction of charge.

47 The Investment in Gujrat State Machine Tools Corporation being an Associate Company, has been fully provided in books of Accounts as the Net Worth of the Company is completely eroded based on the latest information available with HMT Limited. Hence the fair value is shown as Nil.

48 The Company has accounted Bad Debts under other expenses, amounting to Rs.1398.1 1 lakhs being the unrealisable Interest income for the year on the Loans given to HMT Machine Tools Ltd, pursuant to Board of Directors approval.

49 The Company has invested Rs.15 lakhs (50% of Equity Shares) comprising 1,50,000 equity shares of Rs.10/- each fully paid up in Sudmo HMT Process Engineers (India) Ltd, Bangalore (M/s Submo-HMT). M/s Sudmo-HMT has no operations. The Board of HMT Ltd has approved (Februaruy 2020/July 2021) for closure of the defunct Joint Venture Company and submitted closure proposal to the Administrative Ministry on July 2021 for approval. Awaiting furhter communication from the Ministry.

50 The Company has invested Rs.20.84 lakhs (39% of Equity Shares) comprising 20,84,050 equity shares of Rs.1/- each fully paid up in Gujarat State Machine Tools Corporation, Bhavanagar (M/s. GSMTC). The Board of HMT Ltd gave (March 2021) in principle approval for liquidation of M/s GSMTC. and issued a consent letter to Gujarat Industrial Investment Corporation Ltd (GIIC). GIIC approved (Sept. 2021) liquidation of M/s GSMTC and submitted (October 2021) the proposal to Industries and Mines Department, Govt. of Gujarat. HMT Limited submitted (April 2022) the liquidation proposal to the Administrative Ministry for approval. Awaiting further communication from the Ministry.

51 The Company has invested 30,00,000 equity shares of 1 Naira each fully paid up in Nigeria Machine Tools Ltd, Nigeria (M/s NMTL. The Board of HMT Ltd approved (February 2020/July 2021) for disinvestment of stake in M/s NMTL and sought approval from Administrative Ministry. Awaiting further communication from the Ministry.

52 Transfer of immovable assets and legal cases

The Company in its Board Meetings has approved to transfer the Immovable assets (Book value Rs.296.06 lakhs), accept all the legal cases and uncrystalised Contingent Liabilities upto Rs.80 crores from HMT Watches Ltd, consequent to administrative approval of Ministry of Heavy Industries. Alongwith the Board of Directors approval it is also taken approval from the Shareholders of the Company on 18th December 2022. Accordingly the Company has taken the following transactions in its Books of Accounts as on 31.12.2022.

53 The Company has no transactions with struck off Companies under section 248 of the Companies Act, 2013.

54 The ammendments in Indian Accounting Standards which are applicable to the Company are not expected to have any significant impact on the Company''s Financial Statements

55 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.

56 The company has not advanced or loaned or invested any funds (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

57 The company has not received any funds from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

58 The figures of previous year have been regrouped/reclassified, wherever necessary, to conform to the current year''s classification.


Mar 31, 2021

i) The Company has classified certain land & building as investment property which is not a owner occupied property.

ii) The Company has not obtained any fair valuation of the investment property from independent valuer. However, based on the guidance value, the fair value of the investment property as at March 31, 2021 is Rs. 2,27,020.15 Lakhs (as at March 31,2020 Rs. 2,26,593.78 Lakhs)

iii) Land:

(a) The Company is in possession of land located at Pinjore, Kalamassery and Hyderabad gifted by the respective State Governments admeasuring 382.54 acres, 27 acres and 660.75 acres respectively, nominally valued at ''1/- each.

(b) In respect of land 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 1,000 sq. yards of land, for which lease deed was executed and agreed to release another two acres of land to Telangana (formerly called as Andhra Pradesh) Postal Department in Hyderabad, the execution of sale deed is pending. The Company has obtained stay order from the Honourable Andhra Pradesh High Court, against repossession of 106 acres and 35 guntas of land by the Government of Telangana (formerly called as 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 Telangana (formerly called as Government of Andhra Pradesh), in lieu of payment of part sale consideration and issue of marketable title for the balance land.

(c) In respect of land at Pinjore, Haryana Irrigation Department has acquired 4.99 acres of land for construction of Kaushalya Dam, compensation of Rs.82,24,000/- is yet to be received. The Company has filed a case against DRO (Haryana Irrigation Department) for not releasing the said compensation towards acquisition of land. Further, the Company has entered into settlement agreement with Haryana Irrigation Department , as per the agreement it has been agreed to release the compensation after withdrawal of case and accordingly the company filed an application for withdrawal of case against Haryana Irrigation Department, which is pending with Honourable High Court of Haryana. The compensation will be received by the company up on completion of formalities.

(a) 5.80 acres of land held by HMT Ltd, at Bangalore which is classified as Assets Held for Sale, and the clearance for sale is expected at any moment from Forest Department, Government of Karnataka.

(b) 446.02 acres of land at Pinjore, Haryana has been transferred to HSIIDC (412.69 acres) and Indian Railways (33.33 acres) during the year 2019-20 and as on 31.3.2021 an amount of Rs.5,04,98,700/- (previous year Rs.38,04,98,700/-) is due from HSIIDC.

HMT Machine Tools Ltd, Bangalore is a BIFR referred Company, and has sought for exemption from payment of Stamp Duty from Government of Karnataka for issue of share certificates in respect of 26,08,99,037 Equity Shares and 4,43,00,000, 3.5% Preference Shares. Pending receipt of order, the share certificates are still not issued by the company.

* The Company is under liquidation w.e.f December 16, 2020 based on the winding up order passed by Hon''ble National Company Law Tribunal on 16.12.2020

** The Company is under voluntary winding up with effect from March 25, 2019 (Ref. Note No.44)

1 Equity Shares:

The Company has only one class of equity shares having par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1. 3.5% Preference Share Capital

Each Redeemable Preference Shares has a par value of Rs.100/- per share and is redeemable after 3 years. The preference shares carry a dividend of 3.5% per annum and conversion of cumulative dividend into equity shares on accrual. The dividend rights are cumulative. The preference shares rank ahead of the equity shares in the event of a liquidation.

In accordance with the CCEA approval and DHI''s directions thereon during January 2016, 3.5% Redeemable Preference Shares of 4,06,14,000 Nos. (Rs. 40,614.00 lakhs) out of 4,43,00,000 Nos. of Rs.100/- each (Rs.44,300.00 lakhs) has been extinguished and set off against the Loans and advances to subsidiaries companies provided by the Company to HMT Watches Limited, HMT Chinar Watches Limited and HMT Bearings Limited.

For the remaining 3.5% Redeemable Preference Shares the revival Plan sanctioned to the Company vide sanction No F.No.5.1(1)/2005.PE.X dated 29 March 2007 has specified for redemption of Preference Share Capital out of sale proceeds of the identified surplus assets of HMT Machine Tools Ltd. Since the sale of identified assets has not taken place which is pre-condition for redemption, remaining 3.5% Redeemable Preference Share Capital is not redeemed .

2. During the FY 2018-19 the Company has received Rs.13.74 lakhs towards reimbursement of consultancy charges paid to IIM, Bangalore for Financial & Strategic Review of consolidation & restructuring plan of the Company. However, the Company is in process of obtaining clarification from Department of Heavy Industry whether the same is grant or loan. Based on the clarification the same will be treated as income or borrowing in the year of confirmation from department of Heavy Industries

30 Other Disclosures:

Government Of India (“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 and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

31 Preference Share Capital:

(i) 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.44,300 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.

However, as per the CCEA approval 40614000 No. of Shares has been extinguished out of 44300000 Nos. of Rs.100/- each, leaving a balance shares of 36,86,000 of Rs.100/- each which is proposed to be redeemed upon sale of immovable property.

(ii) Arrears of fixed cumulative dividends on preference shares (including tax

thereon) payable to Government of India 5,607.63 5,607.63

32 Inventories:

In respect of Tractor Division, Pinjore , Work in progress (Semi Finished Goods), Raw Materials/Components/ Stores and Spares/Tools and Instruments etc as per valuer''s revised NRV and at 23% of book value for Stock of finished Tractors. Reduction in Value of inventories and provisions for obsolecence as on 31.3.2020 as compared to cost (Cost or Selling Price which ever is less inrespect of Stock of finished Tractors) due to valuation of inventories at revised NRV is as under:

Finished goods (stock of Tractors) - 3.98

Work in Progress (Semi Finished Goods) / Tractors Spare Parts - 357.51

Raw Materials / Components/Shop Stores and Tools & Instruments etc. - 365.46

Provision for Obsolecence - 187.44

The Company has assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The Company has also assessed that the Government of India ("GOI") loan excluding interest free GOI loan approximate their carrying amounts as transaction costs are not levied

The Fair Value of Interest Free Government of India Loan is arrived by discounting the loan amount for a repayment period of 5 years. For the purpose of calculation 8% is considered as the effective rate of Interest

The Company has defaulted 3.5% preference shares which are already matured for redemption and hence no fair valution has been made in the accounts.

37 Discontinued Operations

As per the CCEA Approval on 27/10/2016 it was decided that the operations of Tractors Division has to be closed. Accordingly, operations of the said division is closed and assests and liabilities have been merged with ABD effective 01-04-2020. It has been planned that the Company will lease out the major portions of the land and buildings to a third party to generate lease rentals for the Company and accordingly the Company has classified as Investment Properties (Ref. Note No. 43).

40 SEGMENT REPORTING:

As per Ind AS - 108 "Operating Segment", segment information has been provided under the notes to consolidated financial statements.

During the year Food Processing Division has made a sale of Rs.1,200.12 Lakhs to two customers which exceed 10% of the revenue in each case.

41 Considering the realisable value of the non current assets held for sale, support from the Government of India and other business plans, the Company has prepared the financial statements on the basis of going concern and that no adjustments are considered necessary to the carrying value of assets and liabilities.

42 The Investment in Gujrat State Machine Tools Corporation being an Associate Company, has been fully provided in books of Accounts as the Net Worth of the Company is completely eroded based on the latest information available with HMT Limited. Hence the fair value is shown as Nil.

43 Pursuant to the Board resolution of the Company dated 29.07.2020 Tractor business of the Company was closed as on 31st March 2020 and all the assets and liabilities lying in the books of Tractor division as at the end of 31st March 2020 has been merged with the books of Auxiliary Business Division (ABD) of the Company w.e.f 1st April 2020. The financials for the year 2020-21 have been prepared accordingly.

44 HMT Chinar Watches Ltd, a wholly owned subsidiary, has been approved for voluntary liquidation on March 25, 2019 under section 59 of Insolvency and Bankruptcy code 2016 (IBC 2016). After completion of closure compliances, Insolvency Professional (IP) appointed for the purpose, has remitted the final dividend of Rs. 609.28 Lakhs and the Share Capital of Rs. 166.01 Lakhs to HMT Limited.

45 Impact on uncertainties relating to the global health pandemic from COVID-19

The Company has considered the possible effects that may result from the Covid-19 pandemic on receivables, inventories, revenues including leases, Property Plant and Equipment, Going concern and investment in subsidiaries. In developing the assumptions relating to the possible future uncertainties because of this pandemic, the Company, as at the date of approval of these financial statements has used internal and external sources of information. Based on the analysis of such information and the nature of current business operations carried by the company, it is of the view that the impact is temporary and does not have material impact on financial statements as at 31st March 2021 and hence has not made any provision in the books of account.

46 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.

47 The Company has deferred tax asset in the form of brought forward business losses, In the absence of resonable certainity of future business profits, the Company has not recognised deferred tax asset.

48 The figures of previous year have been regrouped/reclassified, wherever necessary, to conform to the current year''s classification.


Mar 31, 2018

1 Other Disclosures:

Government Of India (“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 and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

2 Preference Share Capital:

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.44,300 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. However, as per the CCEA approval 40614000 No. of Shares will be extinguished out of 44300000 Nos. of Rs.100/ - each, leaving a balance shares of 36,86,000 of Rs.100/- each which is proposed to be redeemed upon sale of immovable property.

3 A Fair Values

Set out below, is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values

The Company has assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The Company has also assessed that the Government of India (“GOI”) loan excluding interest free GOI loan approximate their carrying amounts as transaction costs are not levied

The Fair Value of Interest Free Government of India Loan is arrived by discounting the loan amount for a repayment period of 5 years. For the purpose of calculation 8% is considered as the effective rate of Interest

The Company has not discounted the redeemable preference shares as 8% redeemable preference shares have been redeemed and 3.5% preference shares is matured and the Company has defaulted, hence in our opinion no fair valuation need to be made for the same.

4 Discontinued Operations

As per the CCEA Approval on 27/10/2016 it was decided that the operations of Tractors Division has to be closed. Accordingly, operations of the said division is closed during the year. It has been planned that the Company will lease out the major portions of the land and buildings to a third party to generate lease rentals for the Company and accordingly the Company has classified as Investment Properties.

5 SEGMENT REPORTING:

As per Ind AS - 108 “Operating Segment”, segment information has been provided under the notes to consolidated financial statements.

6 The net worth of the Company is substantially eroded. Considering the realisable valuee of the non-current assets held for sale, support from the Government of India and other business plans, the Company has prepared the financial statements of the Company on the basis that it is a going concern and that no adjustments are considered necessary to the carrying value of assets and liabilities.

7 The Company has deferred tax asset in the form of brought forward losses, in the absence of reasonable certainty of future profits the Company has not recognised any deferred tax asset. Further, due to losses no disclosure has been furnished by the Company in respect of income taxes as per Ind AS - 12.

8 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.

9 Common Services Division an unit of the Company is in the process of reconciling GST collected on sale of watches, Input Tax credit availed. The Company has rectified to an extent of balances identified. In the opinion of the management effect on revenue is not material.

10 Recent Accounting Pronouncements:

On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. In addition, limited amendments have been made to some other Ind AS standards (Ind AS’s 2, 12, 21, 28 and 40).

The Company is in the process of assessing the impact of the introduction of Ind AS 115- Revenue from Contracts with Customers and the limited amendments to the other Ind AS Standards. The impact, if any, will be disclosed in the financial statements for the quarter ended June 30, 2018.

11 The figures of previous year have been regrouped/reclassified, wherever necessary, to conform to the current year’s classification.


Mar 31, 2017

1. Background:

HMT Limited (‘the Company’) is a public limited company domiciled in India and is incorporated in 1953 under the provisions of the Companies Act, 1913, having Registered Office at HMT Bhavan, 59, Bellary Road, Bangalore-560 032. The Company’s shares are listed in National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Company is engaged in the manufacturing of Tractors, Food Processing Machineries etc.

Additional Information:

i) The Company has classified certain land & building as investment property which is not a owner occupied property

ii) The Company has not obtained any fair valuation of the investment property from independent valuer. Hence, no disclosure in this respect has been furnished.

iii) Land:

(a) The Company is in possession of gift land located at Pinjore, Kalamassery and Hyderabad gifted by the respective State Governments admeasuring 822.67 acres (includes 446 acres as Assets held for Sale and is reclassified accordingly), 30 acres (includes 3 acres as Assets Held for sale and is reclassified accordingly) 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.

(b) In respect of land 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 1,000 sq. yards of land, for which lease deed was executed and agreed to release another two acres of land to Telangana (formerly called as Andhra Pradesh) 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 Telangana (formerly called as 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 Telangana (formerly called as Government of Andhra Pradesh), in lieu of payment of part sale consideration and issue of marketable title for the balance land].

(c) In respect of land at Pinjore, Haryana, the Haryana 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 on account of 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.

Cash Credits as referred to above, are repayable on demand and are secured by hypothecation of entire current assets of the Company including inventories and Trade Receivables, by first charge and collateral security by way of equitable mortgage by deposit of title deed of the immovable property of the Company ranking pari passu inter-se the participating banks.

In accordance with the CCEA approval and DHI’s directions thereon during January 2016, the entire 8% Redeemable Preference Shares of 21700000 nos. of Rs.100 each (Rs.21,700.00 lakhs) will be extinguished and set off against the Loans and advances to Subsidiaries provided by Holding Company to HMT Watches Limited, HMT Chinar Watches Limited and HMT Bearings Limited.

3.5% Preference Share Capital

Each Redeemable Preference Shares has a par value of Rs.100/- per share and is redeemable after 3 years. The preference shares carry a dividend of 3.5% per annum and conversion of cumulative dividend into equity shares on accrual. The dividend rights are cumulative. The preference shares rank ahead of the equity shares in the event of a liquidation.

In accordance with the CCEA approval and DHI’s directions thereon during January 2016, 3.5% Redeemable Preference Shares of 4,06,14,000 no’s (Rs.40,614.00 lakhs) out of 4,43,00,000 no’s of Rs.100/- each (Rs.44,300.00 lakhs) will be extinguished and set off against the Loans and advances to subsidiaries companies provided by the Company to HMT Watches Limited, HMT Chinar Watches Limited and HMT Bearings Limited.

For the remaining 3.5% Redeemable Preference Shares the revival Plan sanctioned to the Company vide sanction No F.No.5.1(1)/2005.PE.X dated 29 March 2007 has specified for redemption of Preference Share Capital out of sale proceeds of the identified surplus assets of HMT Machine Tools Ltd. Since the sale of identified assets has not taken place which is pre-condition for redemption, remaining 3.5% Redeemable Preference Share Capital is not redeemed .

2 Other Disclosures:

Government Of India (“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 and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

3 Preference Share Capital:

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.44,300 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.

However, as per the CCEA approval 40614000 No. of Shares will be extinguished out of 44300000 Nos. of Rs.100/- each, leaving a balance shares of 36,86,000 of Rs.100/- each which is proposed to be redeemed upon sale of immovable property.

4A Fair Values

Set out below, is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values

The Company has assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. The Company has also assessed that the Government of India (“GOI”) loan excluding interest free GOI loan approximate their carrying amounts as transaction costs are not levied

The Fair Value of Interest Free Government of India Loan is arrived by discounting the loan amount for a repayment period of 5 years. For the purpose of calculation 8% is considered as the effective rate of Interest

The Company has not discounted the redeemable preference shares as 8% redeemable preference shares have been redeemed and 3.5% preference shares is matured and the Company has defaulted, hence in our opinon no fair valution need to be made for the same.

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2017, 31 March 2016 and 1 April 2015 are as shown below:

Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2017

When the fair values of financial assets recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques used by a valuation expert

A) the Company has relied on the share valuation report given by a certified valuer for valuing the shares of Andhra Pradesh Gas Power Corporation Ltd. The valuer was unable to follow the market/cost/income approach as the information was not available. The valuer concluded that Net Asset Value (book value_ Method is the most suitable method to calculate the Fair Value.

B) Nigeria Machine Tools ltd is a company incorporated outside India, the valuer was unable to retrive any information from the company as it is a foreign company. It is more appropriate to conclude that the Fair Value of these shares as NIL

5 Discontinued Operations

As per the CCEA Approval on 27/10/2016 it was decided that the operations of Tractors Division has to be closed. Accordingly, operations of the said division is closed during the year. It has been planned that the Company will lease out the major portions of the land and buildings to a third party to generate lease rentals for the Company and accordingly the Company has classified as Investment Properties.

A Sensitivity analysis:

The key actuarial assumptions to which the defined benefit plans are particularly sensitive to are discount rate and fully salary escalation rate. The following table summarises the impact on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the assumptions by 100 basis points:

B. The expected contributions for gratuity for the next financial year will be Rs.344.43 lakhs and Settlement allowance will be Rs.38.91 lakhs.

6 The Company had announced Voluntary Retirement Scheme (“VRS”) for the employees of Tractor Business Group, Pinjore during the year. The Company has paid an amount of Rs.28,528.57 lakhs which has been disclosed as under exceptional items in discontinued operations.

7 FIRST TIME ADOPTION OF IND AS:

These financial statements, for the year ended 31 March 2017, are the first, the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

(i) Exemptions availed:

a) Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties.

Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

b) Ind AS 27 requires investments in subsidiaries to be recorded at cost or in accordance with Ind AS 109 in its separate financial statements. However, Ind AS 101 provides an option to measure that investment at one of the following amounts in case the Company decides to measure such investment at cost:

i. Cost as per Ind AS 27 or

ii. Deemed cost, which is:

a. fair value at the entity’s date of transition to Ind AS

b. previous GAAP carrying amount at that date

The Company has elected to measure its investments in subsidiaries using deemed cost at the previous GAAP carrying amount at the date of transition to Ind AS.

(ii) Exceptions applied:

a) Ind AS 101 requires an entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS to be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

The Company’s estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

Impairment of financial assets based on expected credit loss model.

b) Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

The Company has applied the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

1. FVTOCI financial assets

Under Indian GAAP, the Company accounted for long term investments (other than investments in subsidiaries and Join Venture) in unquoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Company has designated such investments as FVTOCI investments. Ind AS requires FVTOCI investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognised as a separate component of equity, in Equity Instruments through other comprehensive income

2 Defined benefit obligation

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to statement of profit or loss. Under Ind-AS, remeasurements are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by Rs. 725.87 Lakhs due to IND AS-19 and Remeasurement gains/ losses on defined benefit plans has been recognized in the OCI.

3 Property, Plant and Equipment (PPE)

Under Indian GAAP the Company has recognised Special Tools as Other Current Assets. Under IND As, the Company recoginses it as PPE as per the definition and depreciate the same.

4 Investment Proeprty

Under Indian GAAP Investments properties were recognised as part of PPE as there was no sepcific standard in this regard. Under IND AS scenario, separate standard for Investment Properties, accordingly, the Company has reclassified certain assets to Investment properties.

5 Depreciation of property, plant and equipment

Under Indian GAAP the company has recognised depreciation of Special Tools as Amortisation under Other Expenses. Under IND AS the Company has to recognises and depreciate it as PPE based on useful life as disclosed in the Significant Accounting Policy.

6 Preference shares

Under Indian GAAP Preference Share Capital whether convertible or not it was considered as part of Equity. Under IND AS, Redeemable Preference Shares are recognised as Financial Liability in accordance with IND AS.

7 Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased with a corresponding increase in other expense.

8 Other comprehensive income

Under Indian GAAP, the Company need not presented Other Comprehensive Income (OCI) separately. As per IND AS, the Company need to disclose remeasurement gains/losses seperately in Other Comprenhensive Income (OCI). Accordingly the Company has disclosed in OCI.

9 Prior Period Items

Under Indian GAAP the company has accounted Prior Period Item in the reporting periods Statement of Profit and Loss. Under IND AS, Prior Period Items are adjusted against the opening balance of Retained Earnings.

10 Others

The reconciliation between Indian GAAP and IND AS is only on account of classificational changes to comply with the IND AS and Schedule III, Division II of Companies Act, 2013.

8 Disclosure on Specified Bank Notes

In terms of the notification G.S.R. 308(E) dated March 30, 2017, the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016, is disclosed below:

* For the purposed of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the Notifications of the Government of India, in the Ministry of Finance, Department of Economics Affairs No. S.O. 3417 (E), dated November 8,2016.

# as reported by the branch auditors

9 SEGMENT REPORTING:

As per Ind AS - 108 “Operating Segment”, segment information has been provided under the notes to consolidated financial statements.

10 The networth of the Company is substantially eroded. Considering the realisable valuee of the non current assets held for sale, support from the Government of India and other business plans, the Company has prepared the financial statements of the Company on the basis that it is a going concern and that no adjustments are considered necessary to the carrying value of assets and liabilities.

11 The Company has defferred tax asset in the form of brought forward losses, in the absence of resonable certainity of future profits the Company has not recognised any deferred tax asset. Further, due to losses no disclosure has been furnished by the Company in respect of income taxes as per Ind AS - 12.

12 During the year, Tractor Business Group, Pinjore has received a letter from DHI, that the Government of India has waivd off a principal amount of Rs.6,764 lakhs along with the interest of Rs.1,763.34 lakhs, which has been included in the Other income of the discontinued operation reported in note 36 of the financial statements.

13 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.

14 The figures of previous year have been regrouped/reclassified, wherever necessary, to conform to the current year’s classification.


Mar 31, 2016

1. Quantum of loss due to Impairment of Assets as per AS-28 - Nil

2. Capital Work-in-Progress includes Machinery & Equipment which are in Transit and under Inspection or Erection.

3. Pursuant to enactment of the Companies Act, 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly, the unamortized carrying amount is being depreciated over the remaining useful lives. The written down value of Fixed Assets whose lives were expired as at 1st April, 2014 have been adjusted, in the opening balance of Statement of Profit and Loss Account as on 31.3.2015 of Rs. 146.83 Lakhs. The Depreciation for the year 2014-15 is lower by Rs. 13.12 lakhs.

LAND

4. 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.

5. 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.

6. 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.

7. In respect of lands at Pinjore, Haryana, the Haryana State Government has issued an order for resumption of 446 acres of unutilized 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 on account of 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

8. In Tractor Division-Pinjore: A Transport Vehicle with WDV of Rs. 1/- was lost due to theft and is to be written off. Factory Equipment with WDV Rs. 4/-, Office Equipment with WDV of Rs. 3/-, Electrical Equipment with WDV Rs. 13/-, Furniture and Fixtures with WDV Rs.19/-, Computer & Data Processing Equipment with WDV Rs. 6/- were burnt during fire in store and be written off.

9..A HMT Machine Tools Ltd, Bangalore is a BIFR referred Company, and have sought for exemption from payment of Stamp Duty from the State Government, pending receipt of order from the State Government , the Share Certificates for 3.5% Preference Shares are not yet issued to HMT Ltd.

10.D An amount of Rs. 453054/- is decreed by Hon''ble Karnataka High Court in Case No.95/2011 against Judgment and decree passed in OS No.7284/2007 regarding Mallige Estage Pvt. Ltd which would be payable along with interest @6% p.a. Out of the above decreetal amount 50% i.e. Rs. 301813/- has been deposited by the Company

11..E 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 and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

12.F 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.

However, as per the CCEA approval 40614000 No. of Shares will be extinguished out of 44300000 Nos. of Rs.100/- each, leaving a balance shares of 36,86,000 of Rs.100/- each which is proposed to be redeemed upon sale of immovable property.

13. 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 31-03-2016 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. 6356.96 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. 1154.97 lakhs

The provision of Rs. 1379.97 lakhs towards Earned leave encashment and Rs. 321.88 Settlement allowance is carried in the books as on 31.3.2016 to cover the eligible employees based on the actuarial valuation done by qualified Actuary. However, an amount of Rs. 803.18 lakhs and Rs. 37.90 lakhs respectively has been provided during the year.


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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