FAIRFIELD ATLAS LIMITED - Live BSE/NSE, India …Sehgal is presently working as a Director- HR and...

FAIRFIELD ATLAS LIMITEDBOARD OF DIRECTORS : Jeffrey Potrzebowski

Chairman

D. E. JacobManaging Director

Riad Fyzee

J. M. Mapgaonkar

Avinash P. Gandhi

Ravi Kathpalia

Rakesh Chopra

Vivek Prakash (upto 29th October, 2012)

Sunil Sehgal (from 30th October, 2012)

COMPANY SECRETARY : Marcel Rebello

BANKERS : AXIS Bank Ltd.

HDFC Bank Ltd.

AUDITORS : B S R & Associates

Chartered Accountants

Mumbai

REGISTERED OFFICE : Survey No. 157,

AND DOMESTIC UNIT Devarwadi Village, Post Shinoli, Chandgad Taluka,

Dist. Kolhapur, Maharashtra – 416 507.

Tel.: (02320) 236605/6

Email : [email protected]

EXPORT ORIENTED UNIT : Survey No. 116 and 119,

Shinoli (Budruk), Chandgad Taluka,

Dist. Kolhapur, Maharashtra – 416 507.

Tel.: (02320) 236605/6

CORPORATE OFFICE : 202/3 Maruti Mansion,

17, R. Dadaji Street,

Fort, Mumbai – 400 001.

Tel.: 2266 6003, 2270 9025 Fax : 2266 6164


REGISTRARS AND : Sharex Dynamic (India) Pvt. Ltd.

SHARE TRANSFER AGENTS Unit - 1, Luthra Industrial Premises,

Andheri Kurla Road, Safed Pool,

Andheri (East), Mumbai – 400 072.

Tel. : 2851 5606, 2851 5644 Fax : 2851 2885


1

23rd Annual Report 2012–2013

NOTICE

NOTICE is hereby given that the Twentythird Annual General Meeting of shareholders of Fairfield Atlas Limited (the“Company”) will be held on Saturday 27th July, 2013 at 4 p.m. at the Registered Office of the Company at Survey No157, Devarwadi, Chandgad Taluka, Dist Kolhapur, Maharashtra 416507 to transact the following business :

1. To receive, consider and adopt the Statement of Profit and Loss for the year ended 31st March, 2013, the BalanceSheet as at that date and the Reports of the Directors and the Auditors thereon.

2. To appoint a Director in place of Mr. J.M. Mapgaonkar who retires by rotation and being eligible, offers himselffor re-election.

3. To appoint a Director in place of Mr. Rakesh Chopra who retires by rotation and being eligible, offers himself forre-election.

4. To appoint B S R & Associates, Chartered Accountants the retiring Auditors (Firm’s Registration number 116231W)as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until theconclusion of the next Annual General Meeting and to fix their remuneration.

5. To appoint a Director in place of Mr. Sunil Sehgal who holds office only upto the date of this Annual GeneralMeeting and in respect of whom a notice has been received by the Company from a member signifying hisintention to propose Mr. Sunil Sehgal as a candidate for the office of a director liable to retire by rotation.

6. To consider and if thought fit to pass with or without modifications the following resolution as a Special Resolution:

“RESOLVED that pursuant and subject to the applicable provisions of the Companies Act, 1956 for the financialyear ending 31st March, 2013 the non-executive directors viz. Mr. Avinash P. Gandhi, Mr. Ravi Kathpalia, Mr.Rakesh Chopra, Mr. Riad Fyzee and Mr. J.M. Mapgaonkar be paid an amount not exceeding Rs.5 lakhs to eachof them (subject to applicable tax) as one time discretionary commission”.

7. To consider and if thought fit to pass with or without modifications the following resolution as a Special Resolution:

“RESOLVED that subject to the provisions of Sections 198, 269, 309, 311 and all other applicable provisions if any, ofthe Companies Act, 1956 (“the Act”) (including any statutory modification or re-enactment thereof for the time being inforce) read with Schedule XIII of the Act and subject to the approval of the Central Government, if necessary, and suchother approvals, permissions and sanctions, as may be required approval of the Company be accorded to the revisionin the remuneration payable to Mr. D. E. Jacob, as Managing Director of the Company with effect from 1st October, 2012till 31st October, 2013 upon terms and conditions set out in the Second Supplemental Agreement dated 29th March, 2013entered into between Mr. D.E. Jacob and the Company.

FURTHER RESOLVED that where in any financial year during the currency of the tenure of Mr. D.E. Jacob, the Companyhas no profits or its profits are inadequate, the Company may pay to Mr. D.E. Jacob the above stated remuneration asthe minimum remuneration by way of salary, perquisites and other allowances and benefits as specified above subjectto receipt of the requisite approvals, if any.

FURTHER RESOLVED that for the purpose of giving effect to this Resolution, the Board of Directors of the Company beauthorized to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, properor desirable and to settle any questions, difficulties or doubts that may arise in this regard and further to execute allnecessary documents, application, returns and writings as may be necessary, proper, desirable or expedient.”

NOTES:

a) The relative Explanatory Statement as required by Section 173 of the Companies Act, 1956 in regard to item nos.5 to 7is annexed hereto.

b) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTENDAND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. PROXY FORMS MUST REACH THECOMPANY’S REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE MEETING.

c) The Register of Members and Share Transfer Books of the Company will be closed from Friday 19th July, 2013to Saturday 27th July, 2013 (both days inclusive).

d) Members holding shares in electronic form are requested to intimate any change in their address to their DepositoryParticipants with whom they are maintaining their demat accounts. Members holding shares in physical form arerequested to advise any change in their address to the Company/Registrars and Transfer Agents M/s. SharexDynamic (India) Pvt.Ltd., and quote folio numbers in all their correspondence.

e) Members who hold shares in dematerialised form are requested to bring their Client ID and DP ID numbers foreasy identification of attendance at the meeting.

Goa30 April, 2013

Registered office :Survey No. 157, Devarwadi Village,Post Shinoli, Chandgad Taluka,Dist. Kolhapur, Maharashtra – 416 507

By Order of the Board of Directors

Marcel RebelloCompany Secretary

2

FAIRFIELD ATLAS LIMITED

EXPLANATORY STATEMENT

As required by Section 173 of the Companies Act, 1956 the following Explanatory Statement sets out all the material factsrelating to the above items of business.

ITEM NOITEM NOITEM NOITEM NOITEM NO.5.5.5.5.5

The Board of Directors at their meeting held on 30th October, 2012 appointed Mr. Sunil Sehgal as Additional Directorwith effect from 30th October, 2012 and accordingly he would hold office till the ensuing Annual General Meeting.

Mr. Sehgal’s educational qualifications are LLM, MBA- HR from Faculty of Management Studies and MSc Chemistry allfrom University of Delhi. Mr. Sehgal is presently working as a Director- HR and Legal in Graziano Trasmissioni IndiaPvt.Ltd. (GTIL) Greater Noida an affiliate company of the Oerlikon group and holds a total work experience of 24 years.Previously, he has worked with RPG Group in various capacities across Group companies (CEAT Tyres, RPG PowerTransmission, HMV Cassettes and Duncan Tea). He has also been associated with several companies of Anand Group(Gabriel) and Hero Honda. He represents the Government in various Boards and Committees, such as PF, EI, Ministryof Labour, Industrial and Infrastructure development, and FDI to name a few.

As a Director in GTIL he would be in a position to coordinate the activities between the two companies. In view of hisexperience and academic credentials particularly in the legal field, the Board considers that it would be in the interestof the company to have the benefit of his experience and advice and accordingly commends his appointment to theMembers. Mr. Sehgal has filed his consent with the Company to act as Director.

The company has received notice from a shareholder pursuant to Sec 257 of the Companies Act 1956 alongwith requisitedeposit amount proposing the candidature of Mr. Sehgal for appointment as Director of the Company.

Mr. Sehgal may be deemed to be concerned or interested in this item relating to his appointment.

None of the other Directors is concerned or interested in this item of business.


The Companies Act 1956 permits the payment of remuneration to a director who is neither a wholetime director nor amanaging director by way of commission on the net profits of the company, if the said payment is authorized by a specialresolution passed at the general meeting of the company.

The Non-Executive Directors mentioned in the resolution have been with the Company for almost a decade. During thetenure of their office they have offered guidance and mature advice during their participation at the meetings of the Boardand Committee thereof which have substantially benefitted the Company. As the said Directors devote considerable timefor the business of the company and in order to make the compensation payable to them commensurate with their roleand responsibilities, the Board at its meeting held on 11th March, 2013 approved payment not exceeding Rs.5 lakhs toeach of them by way of, one time discretionary commission on net profits for the year ending 31st March, 2013 subjectto approval by the members in general meeting. The payment of commission to the said directors will be in addition tothe sitting fees payable to them for attending each meeting of the Board or Committee thereof.

The Board commends the resolution for approval by the shareholders as a special resolution.

The said non-executive directors viz Mr. Avinash P. Gandhi, Mr. Ravi Kathpalia, Mr. Rakesh Chopra, Mr. Riad Fyzee andMr. J.M. Mapgaonkar are interested in this item of business to the extent of the commission that may be received by them.

None of the other directors is concerned or interested in this item of business.


In order to maintain the remuneration package of Mr. D.E. Jacob, Managing Director of the Company in line with otherSenior Executives of the group the Board of Directors at their meeting held on 11th March, 2013 approved on therecommendation of the Remuneration Committee revision/addition in remuneration to Mr. D.E. Jacob as ManagingDirector of the company for the period commencing from 1st October, 2012 to 31st October, 2013 on terms andconditions set out in the Second Supplemental Agreement dated 29th March 2013 the salient features of which arementioned below:

1. Subject to the approval of the General Meeting and other necessary approvals, if any, the remuneration of Mr. D.E.Jacob as Managing Director of the Company be revised for the period commencing from 1st October, 2012 andending 31st October, 2013.

The following additional information as required by Schedule XIII to the Companies Act 1956 is given below.

I. General Information :

i. Nature of industry

The Company’s core business operations fall in the broad categories of agriculture, construction, automotive,energy, mining and more specifically the on-off highway power transmission sector.

ii. Date or expected date of commencement of commercial production.

The company was incorporated on 1st February 1990 as a private company and commenced commercialproduction in the year 1993. The export oriented unit of the company commenced operations in the year 2003.

3


iii. In case of new companies, expected date of commencement of activities as per project approved by financialinstitution appearing in the prospectus.

Not Applicable

iv. Financial performance based on given indicators – as per Audited Financial results for the year ended 31st March2013.

Particulars Rs. in lakhs

Total Revenue 23,228.88Profit before Depreciation, Interest and Tax 5517.66

Depreciation 847.56Interest and other Finance Charges 292.74Profit before taxation 4377.36

Provision for taxationCurrent Tax 1531.31MAT Credit Entitlement -Deferred Tax (18.36)Profit after taxation 2864.39

v. Export performance and net foreign exchange collaborations.

The Company’s earnings in foreign exchange were Rs. 12544.71 lakhs for the financial year ended 31st March2013

vi. Foreign investments of collaborators, if any.

TH Licensing Inc., USA, a wholly owned subsidiary of Fairfield Manufacturing Co. Inc. USA, presently holds22924796 equity shares of Rs.10/- each constituting 83.91% of the paid up share capital of the Company.

II. Information about the appointee.

i. Background details

Mr. Jacob is an Engineer by profession and has been stationed at the company’s plant for the past 19 years.He has been the Managing Director of the Company since 24th October, 2008. Prior to his appointment asManaging director Mr. Jacob held senior positions in the company both in the operations and administrationfields. In his present capacity as the Managing Director of the Company he oversees the entire plant operationsboth of the DTA Unit and EOU Unit. Mr. Jacob has received training at the Plant of the Company’s Principals,Fairfield Manufacturing Co., Inc., USA and the company’s other foreign suppliers.

ii. Past remuneration during financial year ended 31st March 2013.

The total remuneration drawn by Mr. D. E. Jacob as Managing Director for the year ended 31st March 2013was Rs. 64.83 lakhs including perquisites.

iii. Recognition or Awards

Not applicable

iv. Job Profile and their suitability.

Mr. D. E. Jacob is the Managing Director of the Company since 24th October 2008. The Board has delegatedsubstantial powers of management of the Company to Mr. D. E. Jacob, in his capacity as Managing Director ofthe company. Mr. Jacob is an Engineer by profession and has been stationed at the company’s plant for the past19 years and hence has acquired indepth knowledge of the functioning of the various departments. He hasreceived training at the Plant of the Company’s Principals, Fairfield Manufacturing Co., Inc., USA and thecompany’s other foreign suppliers. Mr. Jacob is responsible interalia for development of the business of theCompany. In his present capacity he oversees the entire Plant Operations both of the Domestic and Export Units.Since Mr. Jacob is the sole Managing Director he is required to shoulder substantial responsibilities of thecompany’s growing business which includes both domestic and export business. Therefore, in view of his longassociation, experience and intimate knowledge of the working of the company, Mr. Jacob is best suited for theposition he occupies.

v. Remuneration proposed.

Salary of Rs. 2,22,000 per month and perquisites, allowances and amenities mentioned at IV below and as setout in item No.7 of the Notice.

vi. Comparative remuneration profile with respect to industry, size of the company, profile of the position and person(in case of expatriates the relevant details would be with respect of the country of his origin).

4


Considering the size of the company and volume of its operations both in the domestic and export fields, thebackground, experience and profile of Mr. D. E. Jacob and the responsibilities shouldered by him, the remunerationproposed to be paid is commensurate with remuneration packages given to similar senior level executives in othercompanies and in the group.

vii. Pecuniary relationship directly or indirectly with the company or relationship with the managerial personnel if any.

Apart from the proposed remuneration, Mr. Jacob does not have any other pecuniary relationship with theCompany or relationship with any managerial personnel. However, Mr. Jacob holds 2 fully paid up equity sharesin the Company.

III. Other information

1. Reason of loss or inadequate profits.

Not Applicable as the company has posted a net profit after tax of Rs.2864.39 lakhs during the year ended 31stMarch, 2013.

2. Steps taken or proposed to be taken for improvement.

3. Expected increase in productivity and profits in measurable terms.

Not applicable as the Company has adequate profits.

IV. Disclosures

Revised remuneration package of Mr. D. E. Jacob, Managing Director as approved by the Remuneration Committeeand the Board of Directors with effect from 1st October, 2012 till 31st October, 2013 is as follows:

1. Basic Salary Rs.2,22,000 per month.

2. Bonus/Incentive: In accordance with Oerlikon Group Bonus Policy applicable to Senior Managerial personnel ofthe Company from time to time.

3. Special Allowance: Rs.27,893/- per month.

4. Perquisites:

Provision of perquisites and benefits as appearing hereinafter:

a. Housing:

HRA to be paid at 40% of Basic Salary per month.

b. Medical Reimbursements and Hospitalisation:

Expenses incurred for self and family, will be reimbursed subject to a ceiling of Rs. 15,000/- per year inaccordance with the Company Policy.

c. Leave Travel Allowance:

For self and family, once in a year, incurred in accordance with the Company Policy and limited toRs. 60,000/- per year.

d. Reimbursement of Attire Expenses:

Reimbursement of Attire Expenses of Rs.50,000 per year to be drawn in accordance with the Rules of theCompany.

Apart from above revision/addition in remuneration the other terms and conditions including perquisites and other benefitsas approved by the Remuneration Committee, the Board of Directors and the Company in General Meeting and containedin the Agreement dated 15th November, 2010 and Supplemental Agreement dated 21st February, 2012 entered intobetween Mr. D.E. Jacob and the Company remain unchanged.

The Board commends the resolution for approval by the shareholders as a special resolution.

None of the other directors except Mr. D.E. Jacob is concerned or interested in this item of business.

Inspection of Documents

The Supplemental Agreement referred to in this Explanatory Statement will be available for inspection by shareholdersat the Registered Office of the Company between 10 a.m. to 12 noon on any working day prior to the date of the meeting.

Goa30 April, 2013

Registered office :Survey No. 157, Devarwadi Village,Post Shinoli, Chandgad Taluka,Dist. Kolhapur, Maharashtra – 416 507

By Order of the Board of Directors

Marcel RebelloCompany Secretary

5


DIRECTORS’ REPORT

The Directors are pleased to present their Twentythird Annual Report together with the audited accounts ofFairfield Atlas Limited (the “Company”) for the year ended 31st March, 2013.

i.i.i.i.i. FFFFFinancial Resultsinancial Resultsinancial Resultsinancial Resultsinancial Results Rs. in lakhs

2012–2013 2011–2012

Total Revenue 23,228.88 25,332.74Profit before depreciation, Interest and tax 5,517.66 5,592.19Interest and other finance charges 292.74 316.39Depreciation and Amortisation on• Tangible assets 845.89 840.33• Intangible assets 1.67 1.01Profit before Tax 4,377.36 4,434.46Provision for tax• Current tax 1,531.33 1402.84• MAT Credit entitlement - -• Deferred Tax (credit) (18.36) (69.05)Profit after tax 2,864.39 3100.67

ii.ii.ii.ii.ii. DividendDividendDividendDividendDividend

The Directors did not recommend dividend for the year ended 31st March, 2013.

iii.iii.iii.iii.iii. PPPPPerformanceerformanceerformanceerformanceerformance

During the financial year under review the Company was not able to achieve its anticipated and budgetedgrowth due to drop in export business to the parent company in the latter half of the year. However, thecompany was able to compensate for this loss of revenue due to firm control on costs and marginalincrease in business of domestic customers which enabled the company to achieve a turnover ofRs.23,228.88 lakhs being a decrease of 8.31% over the turnover of the previous financial year. TheCompany was however able to maintain its sequential profitability trend.

However, with signs of economic recovery being manifested in U.S. market particularly in the housingsector and with optimistic schedules proposed by domestic customers an improvement in business in thecurrent year can be expected so as to achieve the company’s growth ambitions. Accordingly the companyhas made investments for Heat Treatment capacity expansion in order to increase production. Commissioningof expanded capacities will be done in a phased manner beginning of second quarter of financial year2013-14.

iviviviviv..... Directors Responsibility StatementDirectors Responsibility StatementDirectors Responsibility StatementDirectors Responsibility StatementDirectors Responsibility Statement

Pursuant to the provisions of sub-section (2AA) of Section 217 of the Companies Act, 1956, the Boardof Directors confirm:

(i) that in the preparation of the Annual Accounts, the applicable accounting standards had beenfollowed alongwith proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year as on 31st March, 2013 and of theprofit of the Company for that period;

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Director’s had prepared the annual accounts on a going concern basis.

vvvvv..... FFFFFinanceinanceinanceinanceinance

The Company has during the year under review paid in the aggregate USD 10 lakhs towards installmentof its foreign currency loans as per the terms and conditions agreed with the foreign lenders.

6


vi.vi.vi.vi.vi. Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange a section titled “CorporateGovernance” has been included in this Annual Report along with Management Discussion and Analysisreport and Shareholder Information report. Certificate from a Practising Company Secretary regardingcompliance of conditions of Corporate Governance is annexed to the report.

vii.vii.vii.vii.vii. PPPPParticulars of Employeesarticulars of Employeesarticulars of Employeesarticulars of Employeesarticulars of Employees

The Company has one employee who was in receipt of remuneration of not less than Rs.60 lakhs duringthe year or Rs. 5 lakhs per month during any part of the said year. The information required under Section217(2A) of the Companies Act, 1956 and the rules made thereunder is provided in the Annexure formingpart of the Report. In terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accountsare being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested inobtaining a copy of the same may write to the Company Secretary.

viii.viii.viii.viii.viii. Results of the PResults of the PResults of the PResults of the PResults of the Postal Ballotostal Ballotostal Ballotostal Ballotostal Ballot

The Scrutinizer’s report giving results of voting by Postal Ballot on the Special Resolution for voluntarydelisting of the equity shares from the BSE Limited was declared on 16th April, 2013. As per the Report,284 Postal Ballot forms were received for 2237972 equity shares from public shareholders. Out of thesethere were 31 invalid Postal forms for various reasons. Out of the 253 valid forms received for 2190122equity shares, 207 forms received from public shareholders for 2155728 equity shares gave an assentto the Resolution while 46 forms received from them for 34394 equity shares gave their dissent to theResolution. Accordingly 98.43% of the votes were in favour of the resolution and 1.57% votes were againstit. Therefore the Resolution was carried with the requisite majority. Further as the number of votes in favourof the resolution were more than two times of those against it the special resolution could be acted upon.

Consequently, the company filed its application to the BSE Limited for its in-principle approval to voluntarydelist the equity shares of the company from the BSE Limited.

ix.ix.ix.ix.ix. Conservation of energyConservation of energyConservation of energyConservation of energyConservation of energy, technology absorption and foreign exchange earnings and outgo, technology absorption and foreign exchange earnings and outgo, technology absorption and foreign exchange earnings and outgo, technology absorption and foreign exchange earnings and outgo, technology absorption and foreign exchange earnings and outgo

The information required in terms of Section 217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in theannexure forming part of this Report.

x.x.x.x.x. Environmental, Occupational, Health and Safety ManagementEnvironmental, Occupational, Health and Safety ManagementEnvironmental, Occupational, Health and Safety ManagementEnvironmental, Occupational, Health and Safety ManagementEnvironmental, Occupational, Health and Safety Management

On completion of the audit by TUVSUD Southern Asia Private Limited during the course of the year theCompany has been awarded certificates for establishing and applying both for DTA and EOU Units.

i) An Environmental Management System according to requirements of ISO 14001:2004 Standard and

ii) An Occupational Health and Safety Management System according to requirement of BSOHSAS18001:2007 Standard.

The said certificates are valid till 29th November, 2015.

xi.xi.xi.xi.xi. DirectorsDirectorsDirectorsDirectorsDirectors

Mr. J.M. Mapgaonkar retires by rotation at this Annual General Meeting and being eligible offers himselffor reappointment as Director. It has been decided by Mr. Jeffrey Potrzebowski, Mr. Rakesh Chopra andMr. Ravi Kathpalia who were appointed Directors on the same day that is 9th August, 2011 that Mr.Rakesh Chopra will retire at this Annual General Meeting. Mr. Rakesh Chopra being eligible offers himselffor reappointment as Director.

Mr. Sunil Sehgal was appointed Additional Director of the company with effect from 30th October, 2012.He ceases to hold office on the date of this Annual General Meeting and being eligible offers himselffor reappointment as Director.

Mr. Vivek Prakash ceased to be a director of the company consequent upon his resignation with effectfrom 29th October, 2012. The Board placed on record its appreciation of the valuable contribution madeand advice given by him during the tenure of his office.

None of the directors of the Company is disqualified as on 31st March, 2013 for being appointed asDirectors as specified in Section 274(1)(g) of the Companies Act, 1956.

7


Goa

30th April, 2013

For and on behalf of the Board of Directors

DDDDD. E. E. E. E. E. JA. JA. JA. JA. JACOBCOBCOBCOBCOB AAAAAVINASH PVINASH PVINASH PVINASH PVINASH P. GANDHI. GANDHI. GANDHI. GANDHI. GANDHI

Managing Director Director

xii.xii.xii.xii.xii. CEO and CFO CertificationCEO and CFO CertificationCEO and CFO CertificationCEO and CFO CertificationCEO and CFO Certification

The CEO and CFO have certified to the Board of Directors in respect of review of the financial statementand cash flow statement for the year in terms of the requirement of Clause 49(V) of the Listing Agreement.

xiii.xiii.xiii.xiii.xiii. AuditorsAuditorsAuditorsAuditorsAuditors

B S R & Associates retire as Auditors at this Annual General Meeting and being eligible offer themselvesfor reappointment. They have further confirmed that their reappointment if made, would be in conformitywith the provisions of Sec 224(1B) of the Companies Act, 1956.

xivxivxivxivxiv..... Cost AuditCost AuditCost AuditCost AuditCost Audit

Pursuant to the directions from the Central Government Department of Company Affairs, the Companycarried out an audit of its cost records by M/s. M.P. Turakhia and Associates, Cost Accountants, IndoreThe due date of filing of the Cost Audit Report with the Ministry of Corporate Affairs for the financial yearended 31st March, 2012 was 180 days from the end of the financial year which was extended to 31stDecember, 2012 in view of the filing being in XBRL format beginning this year. The Report was filed on27th December, 2012. The Board of Directors has upon recommendation of the Audit Committee re-appointed M/s. M.P. Turakhia and Associates, Cost Accountants, as Cost Auditors of the Company for thefinancial year 2013-14 subject to approval of the Central Government.

Necessary confirmation has been obtained from M/s. M.P. Turakhia and Associates to the effect that theyare eligible for appointment as Cost Auditors under Sec 233B of the Companies Act, 1956.

xvxvxvxvxv..... Auditors’ ReportAuditors’ ReportAuditors’ ReportAuditors’ ReportAuditors’ Report

The notes on Accounts, referred to in the Auditors’ Report are self-explanatory.

xvi.xvi.xvi.xvi.xvi. AcknowledgementAcknowledgementAcknowledgementAcknowledgementAcknowledgement

The Directors express their sincere thanks for the continued support and valuable co-operation extendedby Oerlikon Corporation and Fairfield Manufacturing Co.Inc and contribution of the employees at alllevels to the performance of the Company.

8


ANNEXUREANNEXUREANNEXUREANNEXUREANNEXURE

STATEMENT UNDER SECTION 217(1)(e) OF THE COMPANIES ACT 1956, READ WITH THE COMPANIES (DISCLOSURE

OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS), RULES 1988 AND FORMING PART OF THE

DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH 2013.

AAAAA..... CONSERVCONSERVCONSERVCONSERVCONSERVAAAAATION OF ENERGTION OF ENERGTION OF ENERGTION OF ENERGTION OF ENERGYYYYY

During the year the Company carried out certain energy conservation measures like, energy saving by adopting

variable Frequency drive on various types of machines.

BBBBB..... TECHNOLTECHNOLTECHNOLTECHNOLTECHNOLOGOGOGOGOGY ABSORPTIONY ABSORPTIONY ABSORPTIONY ABSORPTIONY ABSORPTION

There was no significant Technology Absorption in the Company during the year.

C.C.C.C.C. FOREIGN EXFOREIGN EXFOREIGN EXFOREIGN EXFOREIGN EXCHANGE EARNINGS AND OUTGOCHANGE EARNINGS AND OUTGOCHANGE EARNINGS AND OUTGOCHANGE EARNINGS AND OUTGOCHANGE EARNINGS AND OUTGO

The information on foreign exchange earnings and outgo is furnished in Notes to financial statements at Note

No. 33

YEARWISE REVENUE AND PBT

(Rs.

in L

akh

s)

Financial Years

Goa

30th April, 2013

For and on behalf of the Board of Directors

DDDDD. E. E. E. E. E. JA. JA. JA. JA. JACOBCOBCOBCOBCOB AAAAAVINASH PVINASH PVINASH PVINASH PVINASH P. GANDHI. GANDHI. GANDHI. GANDHI. GANDHI

Managing Director Director

9


Management Discussion and Analysis

(a) Industry Structure and Developments

The Company’s core business operations are classified into the following categories: agriculture, construction,

automotive, energy, mining and more specifically the on-off highway power transmission sector. Indian gear

producers for these markets and industries can be classified on the basis of being an original equipment

supplier or a replacement market supplier or a combination of both. Currently, leading manufacturers in these

industries source their gear requirements through their captive in-house facilities, if any, or from suppliers

approved by them. Fairfield Atlas Ltd., is one such approved and preferred supplier to OEM’s in the markets

mentioned above. The demand for the Company’s products is a derived demand and hence is dependent upon

growth rate of its OEM customers. The Company can provide its customers with a localized solution for

manufacturing and product support. The auto sector operates in a growing competitive environment and hence

has to constantly adapt to changing market conditions. Consequently, the Company’s business to this sector

varies with the demand from this important sector. However, the forecast or expectation of a favourable

monsoon this year will positively impact agricultural activity and bodes well for business to the tractor industry.

The Company being a preferred supplier to key players in this market can expect growth in business in this

sector. With continued emphasis by the Government on infrastructure development the construction industry will

remain an attractive market. This trend plays to the capabilities and market strength of the Company.

(b) Opportunities and Threats

The Company is a part of the Oerlikon Group. Along with its associate in India viz. Graziano Trasmissioni (I)

Pvt.Ltd., it forms the transmission segment drive system. Operational synergies between the two companies

present opportunities to ensure steady growth for the company going ahead. With the proposed commissioning

of the expanded heat treatment facilities and investment in machineries and other infrastructure facilities the

company will be able to supply wider range of components both for domestic and export business. Being an

integral part of the Oerlikon Drive System Segment the company has opportunities to expand its global

business. The emerging revival of the US economy particularly the housing sector and the capex initiatives

taken by the Company have provided opportunities for increased business generally and particularly for niche

markets. The company is continuously evaluating opportunities for extending its customer base through new

product development or new applications. The Company however faces challenges and competitions from

other suppliers to OEMs

(c) Segment-Wise Performance

The company has determined it business segments as on-highway (select applications), agriculture, mining,

energy, specialty industrial and construction related transmission gears. As indicated above, the company will

evaluate and make strategic investment that provide growth opportunities in market segments that will yield

appropriate returns on investment.

(d) Outlook

The outlook for the current financial year seems to be encouraging. With the emerging revival of the US

economy particularly the housing sector the prospects for the export business of the company appear bright.

The expansion has made significant headway despite tough ground conditions. With the proposed commissioning

of the extended heat treatment facilities by the end of the first quarter and the installation of heavy equipment

and machinery along with other infrastructural facilities in the expansion phase the company is poised to

provide a wider range of components both for its export and domestic business. According to Oerlikon business

plan, India is considered a key market for the Segment Drive Systems and based on a clear growth strategy

and planned investments the business outlook for the Drive systems appear promising.

Demand schedules from the company’s customers in the Tractor and Construction industry have registered a

10


healthy growth and hence the business outlook for the company from these customers for the current financial

year appear positive. The Company is making every effort to reap the benefits of its investment in the expanded

facilities so as to give it an upward momentum in sales.

(e) Internal Control System

The Company fosters a strong internal control culture in the overall Governance process. The Internal Control

mechanism provides reasonable assurance of recording transactions in all material aspects and provides a

framework for safe guarding the company’s assets. The ERP system further enhances the effectiveness of the

internal control systems.

In addition to statutory audit, the financial and operating controls are reviewed by the Internal Auditors. The

Internal Audit Plan is developed at the beginning of the financial year in consultation with the Statutory Auditors

and Audit Committee.

The Company has appointed a reputed and experienced firm of Chartered Accountants to conduct the Internal

Audit and their Report is reviewed by the Audit Committee for ascertaining the adequacy of internal control.

The company’s cost records are subject to Cost Audit as prescribed by the Government. Compliance with

various laws and regulations pertaining to the company are also monitored by placing compliance reports at

every Audit Committee meeting.

(f) Human Resources / Industrial Relations

Industrial relations continued to be cordial and harmonious throughout the year. As current wage settlement

will expire in June this year, preliminary negotiations between the management and workers representatives

have already commenced. With a view to enhance the business skills of the employees and to help them in

their career aspiration various training programmes and seminars were conducted in the course of the year

for building skills and developing competencies of the employees and nurturing their talents. These programmes

were conducted for employees at all levels in the organization and with the help and guidance of professionals

in the field. A number of programmes like games, drawing competitions and family get together were organized

to help improve employee bonding and manage stress at work.

The Company has a strength of 569 permanent employees as on 31st March, 2013.

(g) Risks and Concerns

Since a bulk of the company’s revenues are derived from export business the company’s revenues are vulnerable

to fluctuations in the value of foreign currencies especially the US Dollar. On the domestic side, rise in prices

of petroleum products, power cost and cost of inputs can hamper profit margins of the Company. General

inflationary trends in the economy coupled with Government policies can impact overall demand. High Interest

Rates and inflation have dampened mood of buyers and economic vagaries may compound the problems

further.

11


DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

FINANCIAL INFORMATION

In these challenging times, the company has achieved income of Rs 23,228.88 lakhs which is 8.31% less as

compared to March 2012. Even though there is decrease in income for the year under review by 8.31% company

continues with its productivity efficiency improvements which have resulted in savings through continued focus on

cost controls, process efficiencies and product innovations that met customer expectations in all areas thereby

enabling the Company to maintain profitable growth in the current economic scenario and achieve profit for the

year before exceptional items and taxation amounting to Rs 4,377.36 lakhs which is higher by 1.43% of sales as

compared to March 2012.

BORROWINGS

Borrowings include external commercial borrowing amounting of US$ 70.00 lakhs (Rs 3,569.15 lakhs)

(PY US$ 80.00 lakhs (Rs 3,961.75 lakhs)) and Vehicle loan of Rs 49.43 lakhs (PY Rs 48.80 lakhs). During the year

company reduced its loan by US$ 10 lakhs through repayment of loan and strengthening the credit profile of your

Company. The Company’s total Debt to Equity Ratio is 0.32 as at 31st March, 2013 as compared to 0.47 as on

31st March 2012.

FIXED ASSETS

The tangible assets (net of depreciation and including capital work in progress) increased from Rs 6,054.61 lakhs

as at March 31, 2012 to Rs 8,085.23 lakhs as at March 31,2013. The increase is mainly towards plant and

machinery to enhance the plant capacity to meet the additional demand from the existing and potential customers.

As the demand for the products manufactured by the company is increasing, the company to meet the increased

demand is in the process of expanding its present Heat treatment plant. The expected date of completion of

expansion is July 2013. This will help your company to meet the increasing demand significantly. The said Heat

Treatment plant is expected to commence its production by July 2013, at the existing 100% EOU unit

INVENTORIES

Inventories stood at Rs 3,169.99 lakhs as compared to Rs 3,696.85 lakhs as at March 31, 2012. As compared

to previous year inventory has gone down by Rs 526.86 lakhs which is approximately 14% of total inventory as

on March 31, 2012. As there is an decrease in Sales, related purchases of raw material, work in progress and

stores and spares amounting to Rs 523.71 lakhs has decreased Even though inventory has gone down, inventory

holding days has gone up to 113 days as compared to 105 days as on March 31, 2012. The said holding days

has increased as on account of increase in purchases during the last quarter Jan 2013 to March 2013 by Rs

1,193.47 lakhs.

TRADE PAYABLES

As compared to previous year Trade payables as on March 31, 2013 has decreased by Rs 291.32 lakhs. As sales

are decreased during the period under review, there is decrease in credit purchase of raw material, job work

charges. Hence there is decrease in Trade payables. Although the Trade payables has decreased as at March 31,

2013, Trade payable outstanding in number of days has increased to 95 days as compared to 83 days as on March

31, 2012 as credit purchases of raw material has increased by Rs 1,193.47 in last quarter of year and for which

payments have not been made before March 31, 2013.

TRADE RECEIVABLES

Trade Receivables (net of allowance for doubtful debts) are Rs 6,760.58 lakhs as at March 31, 2013, as compared

to Rs 6,718.01 lakhs as at March 31, 2012. The allowances for doubtful debts are Rs 6.55 lakhs as at March 31,

2013 against Rs 4.60 lakhs as at March 31, 2012. Although the amount of Trade receivables has decreased as

on March 31, 2013, the Trade receivables outstanding in number of days has increased to 110 days from 99 days

as on March 31, 2012 as sales are increased in the last quarter of the year by Rs 1,461.43 lakhs and for which

payments have not been received till March 31,2013.

12


RESULTS OF OPERATIONS

Rs. in lakhs

Expenditure FY-2012-2013 FY-2011-2012

Cost of Goods Sold 10,955.37 12,641.59

Employee benefits 2,108.65 1,925.94

Finance Costs 292.74 316.39

Depreciation and amortisation 847.56 841.34

Other expenses 4,647.20 5,173.03

Cost of Goods Sold (COGS) :

Cost of goods sold in terms of net revenue has gone down by 2.67% as compared to March 31, 2012 on account

of strengthening of US Dollar. As a part of cost control policy company continues to procure raw material and

components of Assemblies from domestic market barring few which are customer specific.

Employee benefits:

The total employee cost has gone up by Rs 182.71 lakhs due to annual increase in wages and salaries of workers

and staff.

Finance costs:

As revised Schedule VI requires exchange differences arising on foreign currency borrowing to be adjusted as

interest cost, the same has gone down by Rs 46.77 lakhs and interest on loan and bill discounting has gone up

by Rs 23.11 lakhs as compared to March 2012.

Depreciation and amortisation:

Depreciation has gone up by Rs 6.22 lakhs, mainly on account of addition to Plant & Machinery during the current

year.

Other expenses:

As compared to March 2012 other expenses amounting to Rs 525.83 lakhs has gone down by 10.16%. However

as compared to sales the expenses are 21% of sales and which are in line with previous year March 2012.

Certain statements in the Management Discussion and Analysis describing the Company’s objectives, projections,

estimates, expectations or predictions may be “forward – looking statements” within the meaning of applicable

securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that

could make a difference to the Company’s operations include raw material availability and prices. Cyclical demand

and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic

developments within India and the countries in which the Company conducts business and other incidental factors.

13


Name Category Attendance Particulars No. of No. of No. ofother Committee # Chairmanship

Board Last AGM Directorships Membership of Committee #

Meeting held held

Jeffrey Potrzebowski @ Chairman 5* Yes - - -Non Executive Director

Riad Fyzee Non Executive 6 Yes - 2 1Independent Director

Devanand E. Jacob Managing Director 6 Yes - 1 -

Vivek Prakash** Non Executive Director Nil No - - -

J. M. Mapgaonkar Non Executive Director 4 Yes 1 3 1

Avinash P. Gandhi Non Executive 6 Yes 11 5 5Independent Director

Ravi Kathpalia Non Executive 6 Yes 3 1 5Independent Director

Rakesh Chopra Non Executive 6 Yes 2 4 1Independent Director

Sunil Sehgal*** Non Executive Director 3 NA - - -

Corporate Governance:

1. Company’s philosophy on Corporate Governance:

Fairfield Atlas Limited (“the Company”) is committed to adhere to the Corporate Governance Code as prescribed bythe Stock Exchange and has accordingly implemented various aspects of the code for the year ended 31st March,2013.

2. Board of Directors :

The names and categories of Directors are given below. The Board consists of 8 Directors out of which one is aManaging Director and 7 are non Executive Directors including 4 Independent Directors. No Director of the Companyis related to each other.

3. Board Procedure :

A detailed Agenda and papers for consideration at the Board/Committee Meetings are circulated by the CompanySecretary to each Director in advance of Board and Committee Meetings. The Managing Director briefs the Boardon the overall performance and business of the Company and clarifies queries raised by the Board Members on anyitem of the Agenda as well as presentations made by Senior Executives of the Company.

4. Attendance of Directors at Meetings of Board and Members :

During the year the Board met 6 times on 18th May, 2012, 31st July, 2012, 30th October, 2012, 31st January, 2013,26th February 2013 and 11th March, 2013. The maximum time gap between any 2 meetings was not more than4 calendar months.

The necessary quorum was present for all these meetings.

The following table gives details of Directors, attendance of Directors at the Board meetings and at the last AnnualGeneral Meeting, held on July 31, 2012, number of memberships held by Directors in the Board/Committee ofvarious public companies. None of the Directors on the Board was a member of more than 10 Committees andChairman of more than 5 Committees (as specified in Clause 49 of the Listing Agreement) across all the companiesin which he is a Director:

* One Board Meeting attended through Video conferencing** Mr. Vivek Prakash ceased to be director with effect from 29th October, 2012.*** Mr. Sunil Sehgal was appointed Director with effect from 30th October, 2012.@ Nominee Director – Fairfield Manufacturing Co., Inc, U.S.A.# Committees considered are Audit Committee and Shareholders/Investors Grievance Committee including Fairfield

Atlas Ltd.

5. Directors seeking reappointment:

At the ensuing Annual General Meeting Mr. J.M. Mapgaonkar and Mr. Rakesh Chopra retire by rotation and beingeligible offer themselves for reappointment.

14


Committee Members Meetings Attended

Mr. Riad Fyzee, Chairman 4

Mr. J. M. Mapgaonkar, Member 3

Mr. D. E. Jacob, Member 4

The attendance at the meetings was as under:

Committee Members Meetings Attended

Mr. Avinash P. Gandhi, Chairman 5

Mr. Ravi Kathpalia, Member 5

Mr. Rakesh Chopra, Member 5

Mr. Riad Fyzee, Member 2

ii. Shareholders/Investors Grievance Committee:

The Committee comprises of Mr. Riad Fyzee, Mr. J. M. Mapgaonkar and Mr. D. E. Jacob. Mr. Riad Fyzee is theChairman of the Committee. The Committee looks into redressing of shareholders complaints like transfer ofshares, non-receipt of Balance Sheet, dividend etc. The work of the Registrar and Transfer Agents is overseen bythe Committee. Mr. Marcel Rebello, Company Secretary is the Compliance Officer. Three complaints werereceived from the shareholders during the year and the same were duly disposed off before year end. TheCommittee had 4 meetings till date. The attendances at these meetings were as under:

Mr. J. M. Mapgaonkar 64, B.E. Mechanical. In view of his earlier association with Mahindra & Mahindra Ltd. he isin a position to redress any issues arising out of supplies made to them Mr. Mapgaonkar has been the Director ofthe company since 1995. Mr. Mapgaonkar is a Director in Investment and Precision Castings Ltd. Mr. Mapgaonkaris a member of the Shareholders Grievance Committee of the Board. Mr. Mapgaonkar does not hold any shares inthe company nor is he related to any director of the company.

Mr. Rakesh Chopra 62, is a Fellow Member of the Institute of Chartered Accountants of England & Wales and alsoholds a Master Degree in Business Administration from Cranfield London. He is presently on the Board of BharatGears Ltd and is a Member of its Audit and Shareholders Grievance Committee. He is also a Director in MindaCorporation and Chairman of its Audit Committee. Mr. Chopra is also a Director in several private companies.Mr. Chopra is one of the Independent Director on the Board of Directors of the company and is a member of theAudit and Remuneration Committees. Mr. Chopra does not hold any shares in the company nor is he related to anyDirector of the Company.

Mr. Sunil Sehgal 47, Mr. Sehgal’s educational qualifications are LLM, MBA- HR from Faculty of Management Studiesand MSc Chemistry all from University of Delhi. Mr. Sehgal is presently working as a Director- HR and Legal inGraziano Trasmissioni India Pvt.Ltd. (GTIL) Greater Noida an affiliate company of the Oerlikon group and holds atotal work experience of 24 years. Previously, he has worked with RPG Group in various capacities across Groupcompanies (CEAT Tyres, RPG Power Transmission, HMV Cassettes and Duncan Tea). He has also been associated withseveral companies of Anand Group (Gabriel) and Hero Honda. He represents the Government on various Boardsand Committees, such as PF, EI, Ministry of Labour, Industrial and Infrastructure Development, and FDI to name afew. Mr. Sehgal does not hold any shares in the company nor is he related to any Director of the Company.

6. Code of Conduct

The Board has laid down Code of Conduct for Directors and Senior Executives of the Company. All Board Membersand Senior Management Personnel have affirmed compliance with the Code of Conduct. A declaration signed byMr. D. E. Jacob, Managing Director is enclosed at the end of the report.

7. Stock Options :

No scheme for grant of stock options to Directors or employees.

8. Committees of the Board:

i. Audit Committee:

The members of the Audit Committee are Mr. Avinash P. Gandhi, Mr. Ravi Kathpalia and Mr. Rakesh Chopra.The Audit Committee was reorganized with the induction of Mr. Riad Fyzee as its member with effect from 30thOctober, 2012. Mr. Avinash P. Gandhi is the Chairman of the Committee. The Company Secretary acts asSecretary to the Committee. The terms of reference of the Audit Committee covers the matters enumerated inClause 49 of the Listing Agreement.

The Audit Committee held 5 meetings during the year on 18th May, 2012, 31st July, 2012, 30th October, 2012,31st January, 2013 and 11th March, 2013 and reviewed with the Statutory Auditors the Audited financialstatement for the year ended 31st March 2012 and Unaudited Financial statements for the quarters ended 30thJune, 2012, 30th September, 2012 and 31st December, 2012.

15


iii. Remuneration Committee:

The Remuneration Committee comprises of Mr. Ravi Kathpalia, Mr. Avinash P. Gandhi and Mr. Rakesh Chopra.

Mr. Kathpalia is the Chairman of the Committee. The Committee recommends to the Board the remunerationpackage of the Managing/Whole Time Director and other Directors considering the performance of the company,current trends in the industry, experience of Directors, past performance and other relevant factors. A meetingof the Committee was held on 11th March, 2013 at which all Directors of the Committee were present.

Names andDesignation

Salary HouseRent Allowance

SpecialAllowance

(Rs.)

Commission(Performance

Linked)

(Rs.)

Company’scontribution toProvident andPension Fund

(Rs.)

Total

(Rs.)

Remuneration paid during 2012–2013

Service Contract,notice period,severance fees

* Mr. Riad Fyzee holds 16230 equity shares of Rs.10/- each and Mr. D. E. Jacob holds 2 equity shares of Rs.10/- each inthe company as on 31st March, 2013. None of the other Directors hold any shares in the company.

Above Non Executive Directors are entitled to sitting fees of Rs.20,000/- per Board Meeting and Committee meeting attended.

None of the other Non Executive Directors has been paid any remuneration including sitting fees during the year.

Mr. Devanand E. 6,187,120 - 296,640 - - 6,483,760Jacob *Managing Director

Mr. Riad Fyzee * - 500,000 - - 240,000 740,000Non Executive /Independent Director

Mr. Rakesh Chopra - 500,000 - - 240,000 740,000Non Executive /Independent Director

Avinash Gandhi - 500,000 - - 240,000 740,000Non Executive /Independent Director

Ravi Kathpalia - 500,000 - - 240,000 740,000Non Executive /Independent Director

J. M.-Mapgaonkar - 500,000 - - 140,000 640,000Non ExecutiveDirector

The appointment is for the periodfrom 1st October, 2011 till 31stOctober, 2013 subject totermination by three monthsnotice in writing on either side orpayment of remuneration for threemonths in lieu of notice. IfAgreement terminated withoutcause company to paycompensation subject toprovisions of section 318 of theCompanies Act 1956 calculatedin accordance with Section 318(4)of the Companies Act 1956.

Perquisites

(Rs.)

Sitting fees toNon-ExecutiveDirectors for

attending Boardand CommitteeMeetings (Rs.)

16


GENERAL INFORMATION FOR SHAREHOLDERS :

Annual General Meeting:

The Twentythird Annual General Meeting of the Company will be held on Saturday 27th July, 2013 at 4 p.m. at the

Registered Office situated at Survey No. : 157, Devarwadi Village, Chandgad Taluka, Dist. Kolhapur,

Maharashtra - 416 507.

Financial Calendar of the Company:

The financial year covers the period 1st April to 31st March.

Financial Reporting for

Quarter ending June 30, 2013 Mid August 2013

Half Year ending September 30, 2013 Mid November 2013

Quarter ending December 31, 2013 Mid February 2014

Year ending March 31, 2014 End May 2014

Note: The above dates are indicative.

Dates of Book Closure:

Friday 19th July, 2013 to Saturday 27th July, 2013 (both days inclusive)

Dividend payment date:

Not Applicable

Listing of securities:

The Company’s securities are listed only on the Stock Exchange, Mumbai. The Depositories for the Company’s

shares are National Securities Depository Ltd., and Central Depository Services (India) Ltd. The listing fees of

the Exchange and custodial fees of Depositories for the year 2013-2014 have been paid.

1. Scrip Code: Stock Exchange Mumbai: 520145

2. As per SEBI notification, the Company’s shares are being compulsorily traded in the Demat form. Demat

identification number in NSDL and CDSL is ISIN INE 922C01013.

3. Corporate Identification Number (CIN) L34300MH1990PLC055300.

Shareholders complaints redressal email ID

As required by Clause 47(f) of the Listing Agreement the Company has designated a new email ID

[email protected] for the purpose of attending to shareholders complaints.

Company’s Website

As per Clause 54 of the Listing Agreement the Company has maintained a Website: www.falworld.com for

publishing information as required by the said Clause.

Registrar and Transfer Agents :

Sharex Dynamic (India) Pvt. Ltd.Sharex Dynamic (India) Pvt. Ltd.Sharex Dynamic (India) Pvt. Ltd.Sharex Dynamic (India) Pvt. Ltd.Sharex Dynamic (India) Pvt. Ltd.

Unit-1, Luthra Industrial Premises, Andheri Kurla Road, Safed Pool, Andheri (East), Mumbai 400 072.

Tel : 28515606, 28515644 Fax : 28512885 Email id: [email protected]

17


Market Price Data:

High/low during each month of the last financial year:

Foreign Promoters 22924796 83.91

FI / Bank / FII / Mutual/Venture Funds 1082534 3.96

Bodies Corporate 560947 2.06

NRI/OCBs/Foreign Companies 41602 0.15

Public 2710661 9.92

Total Equity Capital 27320540 100.00

Number of Equity sharesof Rs.10/– each

% to SubscribedCapital

Category

Shareholding Pattern as on March 31, 2013:

High Rs. Low Rs.

April 2012 187.40 139.05

May 2012 158.00 116.00

June 2012 148.70 124.00

July 2012 158.40 127.00

August 2012 183.70 146.15

September 2012 164.15 144.50

October 2012 160.40 141.05

November 2012 141.70 120.20

December 2012 144.75 126.75

January 2013 141.55 115.00

February 2013 143.70 95.40

March 2013 184.30 150.85

18


Distribution of shareholding as on March 31, 2013:

Shareholding No. of % of No. of % of

Holders Holders Shares Shareholding

Upto 100 3308 61.92 263751 0.97

101 to 200 628 11.76 116205 0.43

201 to 500 725 13.57 281209 1.03

501 to 1000 299 5.60 248804 0.91

1001 to 5000 290 5.43 663483 2.43

5001 to 10000 44 0.82 317246 1.16

10001 to 100000 44 0.82 1192402 4.36

100001 to above 4 0.08 24237440 88.71

Total 5342 100.00 27320540 100.00

Dematerialization of shares and liquidity:

98.84% of the total equity comprising 27004420 equity shares of Rs. 10 each is held in a dematerialized form with

National Securities Depository Ltd. and Central Depository Services (India) Ltd. as on March 31, 2013. Transfer of these

shares is done through the depositories.

Share Transfer System :

Trading in equity shares of the Company is permitted only in dematerialized form. Share transfers in physical form received

by the Registrar and Share Transfer Agents are registered and share certificate(s) returned within a period of 30 days from

the date of receipt of the documents provided all documents are valid and complete in all respects. A committee consisting

of a Non Executive Director and Company Secretary approves such transfer of shares.

Plant Location:

i) The Company’s Domestic Tariff Area Unit is located at Survey No. : 157, Devarwadi Village, Chandgad Taluka, Dist.

Kolhapur, Maharashtra – 416 507.

ii) The Company’s Export Oriented Unit is located at Survey No. 116 and 119, Shinoli (Budruk), Chandgad Taluka, Dist.

Kolhapur, Maharashtra- 416 507.

Address for Correspondence :

Correspondence can be addressed to the Registered/Corporate office of the company for the attention of the Company

Secretary email id [email protected] or the office of Share Transfer Agents Sharex Dynamic (India) Pvt.Ltd. Unit:

Fairfield Atlas Limited. Shareholders would have to correspond with respective Depository Participants for shares held in

demat mode.

Other Disclosures :

1. Details of Annual / Extra-ordinary General Meetings:

a) Annual General Meetings held during last three years:

Year Date Time

2010 September 23, 2010 3 PM

2011 August 09, 2011 3 PM

2012 July 31, 2012 4 PM

No Extra-ordinary General Meetings held during last three years

All Annual General Meetings were held at the registered office. No postal ballots were required to be used at these

meetings.

19


Special Resolutions passed

2. Related Party Transactions Disclosures:

During the year under review, besides the transactions reported elsewhere in the Annual Report, there were no otherrelated party transactions with the promoters, directors, management and subsidiaries or relatives etc. that had apotential conflict with the interest of the Company at large.

Transactions with related parties are disclosed in Notes to the financial statements at Note No. 37.

3. Details of non-compliance:

There was no non compliance by the Company on any matter related to capital market during the last three years.

4. Means of communication:

The Quarterly, Half yearly and Yearly results are published in Financial Express and Lokmat (Marathi), Mumbai. Theseare not sent individually to shareholders. The results are also displayed on the Company’s Website “www.falworld.com”

5. Management Discussion and Analysis

The Management Discussion and Analysis has been included in the Directors’ Report and forms part of this AnnualReport.

Declaration by the Managing Director pursuant to Clause 49 of the Listing Agreement

To,

The Members of Fairfield Atlas Limited

I, Mr. D. E. Jacob, Managing Director of Fairfield Atlas Limited declare that all the members of the Board of Directorsand Senior Executives of the Company have affirmed compliance with the Code of Conduct for the financial year 2012-2013.

b) The following Special Resolutions were passed at the previous three Annual General Meetings:

Financial Year Date of Meeting

No Special Resolutions were passed at the Annual General Meeting held

for the Financial Year 2009-2010.

2009-2010 23.09.2010

D. E. JACOBManaging Director

Goa30 April, 2013

Re-appointment of Mr. D.E. Jacob, as Managing Director of the Company

for a period commencing from 24th October, 2010 and ending 31st

October, 2013 on terms and conditions set out in the Agreement dated

15th November, 2010 entered between Mr. D. E. Jacob and the Company.

2010-2011

Revision in the remuneration payable to Mr. D. E. Jacob, as Managing

Director of the Company with effect from 1st October, 2011 till 31st

October, 2013 upon terms and conditions set out in the Supplemental

Agreement dated 21st February, 2012 entered into between Mr. D.E.

Jacob and the Company.

2011-2012 31.07.2012

c) Resolutions passed through Postal Ballot

The Board of Directors approved the proposal received from the Promoters to initiate the Delisting Offer inaccordance with the Delisting Regulations and sought the approval of the shareholders. A Special Resolution waspassed by the shareholders of the Company through Postal Ballot in accordance with the provisions of Sections

189(2) and 192A of the Companies Act read with the Companies (Passing of the Resolution by Postal Ballot) Rules2001. The results of the Postal Ballot were declared on 16th April, 2013 and notified to the BSE on 16th April,2013 approving the proposed Delisting Offer. The votes cast by the Public shareholders in favour of the DelistingOffer were more than two times the number of votes cast by the Public shareholders against it.

The above postal ballot was scrutinised by Mr. Mahesh Soni (COP:2324), a Practising Company Secretary atMumbai as required under the provisions of Section 192A of the Companies Act, 1956.

09.08.2011

20


Auditors’ Certificate regarding compliance with the conditions of Corporate Governance

TO THE MEMBERS OF FAIRFIELD ATLAS LIMITED

We have examined the compliance of the conditions of Corporate Governance procedures implemented by Fairfield Atlas

Limited, for the year ended on March 31, 2013, as stipulated in Clause 49 of the Listing Agreement of the said Company

with the Stock Exchange in India.

The Compliance of the conditions of Corporate Governance is the responsibility of the Management. Our examination

has been limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring

compliance with the conditions of Corporate Governance. It is neither an audit nor an expression of opinion of the

financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and the representations

made by the Directors and Management, we certify that the Company has complied with the conditions of Corporate

Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India we have to state that based

on the report given by the Registrars of the Company to the Investors’ Grievance Committee, as on March 31, 2013 there

were no valid investor grievance matters against the Company remaining unattended/pending for more than 30 days.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency

or effectiveness with which the Management has conducted the affairs of the Company.

For GMJ & Associates

Company Secretaries

MAHESH SONI

Partner

Membership No. FCS : 3706; COP : 2324

Mumbai

30th April, 2013

21


INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF FAIRFIELD ATLAS LIMITED

Report on the financial statements

We have audited the accompanying financial statements of Fairfield Atlas Limited (‘the Company’), which

comprise the Balance Sheet as at 31 March 2013, the Statement of Profit and Loss and the Cash Flow

Statement for the year then ended, and a summary of significant accounting policies and other explanatory

information.

Management’s responsibility for the financial statements

The Management is responsible for the preparation of these financial statements that give a true and fair view

of the financial position, financial performance and cash flows of the Company in accordance with the

Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 (“the Act”).

This responsibility includes the design, implementation and maintenance of internal control relevant to the

preparation and presentation of the financial statements that give a true and fair view and are free from

material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted

our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of

India. Those Standards require that we comply with ethical requirements and plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditor’s judgement, including the assessment

of the risks of material misstatement of the financial statements, whether due to fraud or error. In making

those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair

presentation of the financial statements in order to design audit procedures that are appropriate in the

circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial

statements give the information required by the Act in the manner so required and give a true and fair view

in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2013;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that

date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that

date.

22


FFFFFor or or or or B S R & AssociatesChartered Accountants

Firm’s Registration No.: 116231W

Sadashiv ShettySadashiv ShettySadashiv ShettySadashiv ShettySadashiv ShettyGoa Partner30 April, 2013 Membership No: 048648

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (‘the Order’), issued by the Central

Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a

statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief

were necessary for the purpose of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far

as appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this

report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement

comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; and

(e) on the basis of written representations received from the directors of the Company as at 31 March

2013, and taken on record by the Board of Directors, none of the directors is disqualified as on

31 March 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of

Section 274 of the Act.

INDEPENDENT AUDITOR’S REPORT (Continued)


23


(i) (a) The Company has maintained proper records showing full particulars, including quantitative detailsand situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixedassets are verified in a phased manner over a period of three years. In our opinion, this periodicityof physical verification is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the goingconcern assumption.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management during theyear. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, except for pending updationof inventory records of work in progress, the Company is maintaining proper records of inventory.Closing balance of work in progress has been valued based on physical verification at year end.Accordingly, the closing balance of work in progress as per books cannot be ascertained. Thediscrepancies noticed on verification of inventory (except for work in progress) between the physicalstocks and the book records were not material.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies,firms or other parties covered in the register maintained under Section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, and having regard to theexplanation that purchases of certain items of inventories and fixed assets are for the Company’s specialisedrequirements and similarly sale of certain goods and services are for the buyers’ specialised requirementsand suitable alternative sources are not available to obtain comparable quotations, there is an adequateinternal control system commensurate with the size of the Company and the nature of its business withregard to purchase of inventories and fixed assets and for sale of goods and services. In our opinion andaccording to the information and explanations given to us, except for pending updation of inventoryrecords of work in progress, there is no continuing failure to correct major weakness in the internal controlsystem.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars ofcontracts or arrangements referred to in Section 301 of the Act have been entered in the registerrequired to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions madein pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs5 lakh with any party during the year have been made at prices which are reasonable having regardto the prevailing market prices at the relevant time except for purchases of certain items of inventoriesand sale of certain goods and services which are for the Company’s specialised requirements forwhich suitable alternative sources are not available to obtain comparable quotations. However, onthe basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of itsbusiness.

Annexure to the Independent Auditors’ Report - 31 March 2013(Referred to in our report of even date)

24


Annexure to the Auditors’ Report - 31 March 2013 (Continued)

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rulesprescribed by the Central Government for maintenance of cost records under Section 209(1)(d) of theAct, in respect of products and are of the opinion that prima facie, the prescribed accounts and recordshave been made and maintained except for pending updation of inventory records of work in progress.However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination ofthe records of the Company, amounts deducted/accrued in the books of account in respect ofundisputed statutory dues including Provident fund, Income-tax, Wealth tax, Sales-tax / Value addedtax, Service tax, Customs duty, Excise duty and other material statutory dues have been generallyregularly deposited during the year by the Company with the appropriate authorities. As explainedto us, the Company did not have any dues on account of Investor Education and Protection Fundand Employee’s State Insurance.

According to the information and explanations given to us, no undisputed amounts payable inrespect of Provident fund, Income-tax, Wealth tax, Sales tax / Value added tax, Service tax, Customsduty, Excise duty and other material statutory dues were in arrears as at 31 March 2013 for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Income tax, Wealthtax and Excise duty which have not been deposited with the appropriate authorities on account ofany dispute.

According to the information and explanations given to us, the following dues of Sales tax, Customsduty and Service tax have not been deposited by the Company on account of disputes:

Name of the Nature of the Amount (Rs) Period to which Forum whereStatute Dues the amount relates dispute is pending

Central Excise Act, 1944 Customs duty 109,600,000 2006-07 Custom, Excise andService Tax AppellateTribunal

Central Excise Act, 1944 Service Tax 2,479,821 April 2003 to Custom, Excise andJune 2005 Service Tax Appellate

Tribunal

Bombay Sales Tax Act, Levy of 1,523,773* 1998-1999 Appellate Tribunal1959 Purchase Tax Sales Tax

Bombay Sales Tax Act, Levy of 2,386,772* 1999-2000 Appellate Tribunal1959 Purchase Tax Sales Tax

* represents net of amount deposited under dispute

(x) The Company did not have any accumulated losses at the end of the financial year, and has not incurredcash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has notdefaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to anyfinancial institution or debenture-holders during the year.

(xii) According to the information and explanations given to us, the Company has not granted any loans andadvances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not achit fund or a nidhi/ mutual benefit fund/ society.

25


(xiv) According to the information and explanations given to us, the Company is not dealing or trading inshares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guaranteefor loans taken by others from banks or financial institutions.

(xvi)In our opinion and according to the information and explanations given to us, the Company has not taken/ utilised any term loans during the year.

(xvii)According to the information and explanations given to us and on an overall examination of the balancesheet of the Company, we are of the opinion that the funds raised on short-term basis have not beenused for long-term investment.

(xviii)In our opinion and according to the information and explanations given to us, the Company has notmade any preferential allotment of shares to companies/firms/parties covered in the register maintainedunder Section 301 of the Act.

(xix) In our opinion and according to the information and explanations given to us, the Company did nothave any outstanding debentures during the year.

(xx) In our opinion and according to the information and explanations given to us, the Company has notraised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has beennoticed or reported during the course of our audit.

Annexure to the Independent Auditors’ Report - 31 March 2013 (Continued)

FFFFFor or or or or B S R & AssociatesChartered Accountants

Firm’s Registration No.: 116231W

Sadashiv ShettySadashiv ShettySadashiv ShettySadashiv ShettySadashiv ShettyGoa Partner30 April, 2013 Membership No: 048648

26


(Currency : Indian Rupees)Notes 31 March 2013 31 March 2012

BALANCE SHEET AS AT 31 MARCH, 2013

EQUITY AND LIABILITIESShareholders’ funds

Share capital 3 273,205,400 273,205,400Reserves and surplus 4 875,626,941 589,187,914

1,148,832,341 862,393,314Non - current liabilities

Long-term borrowings 5 308,673,078 349,771,500Deferred tax liabilities (net) 6 7,646,893 9,483,356Long-term provisions 7 14,964,984 10,393,353

331,284,955 369,648,209

Current liabilities

Trade payables 8 392,425,448 421,557,711Other current liabilities 9 198,333,695 163,604,567Short-term provisions 7 20,920,126 45,527,667

611,679,269 630,689,945

Total 2,091,796,565 1,862,731,468

ASSETS

Non-current assets

Fixed assets 10(i) Tangible assets 646,596,658 582,787,911(ii) Intangible assets 778,023 520,081(iii) Capital work-in-progress 161,926,825 22,673,096Long-term loans and advances 11 65,862,474 42,084,175Other non-current assets 12 2,000,000 1,000,000

877,163,980 649,065,263

Current assets

Inventories 13 316,999,071 369,685,030Trade receivables 14 676,057,777 671,801,341Cash and bank balances 15 133,955,007 77,101,463Short term loans and advances 16 85,391,542 94,256,724Other current assets 17 2,229,188 821,647

1,214,632,585 1,213,666,205

Total 2,091,796,565 1,862,731,468

Significant accounting policies 2

The accompanying notes 2-40 form an integral part of the financial statement.As per our report of even date attached

For B S R & Associates For and on behalf of the Board of DirectorsChartered AccountantsFirm’s Registration No.: 116231W

Sadashiv Shetty D. E. Jacob Avinash GandhiPartner Managing Director DirectorMembership No.: 048648

Vikram Nagar Marcel RebelloChief Financial Officer Company Secretary

Goa Goa30 April 2013 30 April 2013

27


(Currency : Indian Rupees)Notes 31 March 2013 31 March 2012

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2013

REVENUE FROM OPERATIONS

Sale of products (gross) 18 2,372,268,995 2,579,418,452

Less: Excise duty 119,164,597 114,679,105

Sale of products (net) 2,253,104,398 2,464,739,347

Other operating revenues 19 40,258,390 48,414,127

Other income 20 29,525,394 20,121,114

Total revenue 2,322,888,182 2,533,274,588

EXPENSES

Cost of materials consumed 21 1,067,117,855 1,315,898,650

Changes in inventories of finished goods and work in progress 22 28,419,067 (51,739,583)

Employee benefits 23 210,865,328 192,593,638

Finance costs 24 29,274,219 31,639,280

Depreciation and amortisation 25 84,755,731 84,134,383

Other expenses 26 464,720,418 517,302,502

1,885,152,618 2,089,828,870

Profit before tax 437,735,564 443,445,718

Income tax expense:

- Current tax 153,133,000 140,284,000

- Deferred tax (credit) (1,836,463) (6,905,144)

Profit after taxation for the year 286,439,027 310,066,862

Earnings per equity share of Rs. 10 each

(previous year Rs 10 each)

Basic and diluted earnings per share 35 10.48 11.35

Significant accounting policies 2

The accompanying notes 2-40 form an integral part of the financial statement.As per our report of even date attached





)

28


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2013

(Currency : Indian Rupees)31 March 2013 31 March 2012

A. CASH FLOWS FROM OPERATING ACTIVITIES

Net profit before tax 437,735,564 443,445,718

Adjustments :

Depreciation and amortization 84,755,731 84,134,383

Unrealised foreign exchange differences 19,047,434 44,824,283

Finance costs 17,695,456 15,384,146

Interest income (1,467,139) (1,366,615)

Profit on sale / retirement of fixed assets (69,417) (482,078)

Bad debts recovered (net off bad debts written off) - (321,367)

Provision for doubtful receivables 195,091 -

Provisions no longer required written back (4,340,679) (11,737,532)

Operating cash flow before working capital changes 553,552,041 573,880,938

Adjustments for :

Decrease/(increase) in inventories 52,685,959 (72,541,436)

(Increase) in trade receivables (1,665,376) (246,672,224)

(Increase) in short-term loans and advances (25,085,357) (27,646,164)

(Increase) in long- term loans and advances (1,384,507) (9,518,914)

(Increase) in other current assets (532,205) (103,571)

(Decrease) / increase in trade payables (32,945,170) 96,421,835

(Decrease) / increase in other current liabilities (2,282,984) 20,459,862

(Decrease) in short term provisions (61,068) (20,215,004)

Increase in long term provisions 4,571,631 10,393,353

Cash generated from operations 546,852,964 324,458,675

Income taxes paid (net) (143,728,933) (68,539,932)

Net cash provided by operating activities (A) 403,124,031 255,918,743

B. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (tangible and intangible fixed assets,

capital work-in-progress) 278,353,758) (165,688,012)

Proceeds from sale of fixed assets 3,051,287 877,789

Movement in fixed deposits (net) (12,002,165) 18,999,000

Interest received 591,803 1,527,129

Net cash (used) by investing activities (B) (286,712,833) (144,284,094)

29


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2013 (continued)

(Currency : Indian Rupees)31 March 2013 31 March 2012

As per our report of even date attached.





C. CASH FLOWS FROM FINANCING ACTIVITIES

Interest paid (17,682,892) (16,089,662)

Proceeds from borrowings - 2,733,439

Repayment of borrowings (52,876,927) (48,354,000)

Net cash (used) by financing activities (C) (70,559,819) (61,710,223)

Net increase in cash and cash equivalents (A)+(B)+(C) 45,851,379 49,924,426

Cash and cash equivalents at the beginning of year (see below) 77,079,157 27,154,731

Cash and cash equivalents at the end of year (see below) 122,930,536 77,079,157

Notes to cash flow statement

1 Components of cash and cash equivalents:

Cash in hand 135,409 300,703

Balances with banks

- in current accounts 22,609,705 34,526,328

- in Exchangers earner’s foreign currency (EEFC) account 100,185,422 42,252,126

122,930,536 77,079,157

2 The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting

standard - 3 on Cash flow statements issue by the Companies (Accounting Standard) Rules, 2006.

30


1 Company overview

Fairfield Atlas Limited ('the Company'), a subsidiary of T-H Licensing Inc., USA, (‘the holding company’),

a wholly owned subsidiary of Fairfield Manufacturing Company Inc., USA was incorporated on

1 February 1990. The ultimate holding company is OC Oerlikon Corporation A.G. Pfaffikon.

The Company is primarily engaged in manufacturing and selling of automotive transmission gears and

gear boxes.

2 Significant Accounting Policies

The accounting policies set out below have been applied consistently to the periods presented in these

financial statements.

2.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on

the accrual basis of accounting and comply with the Companies (Accounting Standards) Rules, 2006

issued by the Central Government, the relevant provisions of the Companies Act, 1956 and other

accounting principles generally accepted in India, to the extent applicable. The financial statements are

presented in Indian rupees.

Effective 1 April 2011, the revised Schedule VI notified under the Act has become applicable to the

Company for preparation and presentation of its financial statements. The adoption of revised Schedule

VI does not impact recognition and measurement principles followed for preparation of financial

statements. All assets and liabilities have been classified as current or non-current as per the Company’s

normal operating cycle and other criteria set out in the revised Schedule VI.

2.2 Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles

(‘GAAP’) in India requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial

statements, and the reported amounts of revenues and expenses during the reported period. The

estimates and assumptions used in the accompanying financial statements are based upon management’s

evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual

results may differ from the estimates used in preparing the accompanying financial statements. Any

revision to accounting estimates is recognised prospectively in current and future periods.

2.3 Current-non-current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realised in, or is intended for sale or consumption in, the company's normal

operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is expected to be realised within 12 months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability

for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Notes to the Financial Statementsfor the year ended 31 March 2013 (Currency : Indian Rupees)

31


2 Significant Accounting Policies (continued)

2.3 Current-non-current classification (continued)

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the company's normal operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is due to be settled within 12 months after the reporting date; or

d. the company does not have an unconditional right to defer settlement of the liability for at least

12 months after the reporting date. Terms of a liability that could, at the option of the counterparty,

result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash

or cash equivalents.

Based on the nature of operations and the time between the acquisition of assets for processing and

their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as

twelve months for the purpose of current – non-current classification of assets and liabilities.

2.4 Revenue recognition

Revenue from sale of transmission gears and gear boxes is recognised on transfer of all significant risks

and rewards of ownership to the buyer. Related services are recognised once the services are rendered.

Sales are recorded net of trade discounts, rebates, sales tax, excise duty and sales return.

Interest income is recognised using the time proportion method based at the underlying interest rates.

2.5 Fixed assets and depreciation/amortization

Tangible fixed assets

Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation

and/or accumulated impairment loss, if any. The cost of an item of tangible fixed asset comprises its

purchase price, including import duties and other non-refundable taxes or levies and any directly

attributable cost of bringing the asset to its working condition for its intended use; any trade discounts

and rebates are deducted in arriving at the purchase price.

Subsequent expenditures related to an item of tangible fixed asset are added to its book value only

if they increase the future benefits from the existing asset beyond its previously assessed standard of

performance.

Borrowing costs are interest and other costs (including exchange differences arising from foreign

currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred

by the Company in connection with the borrowing of funds. Borrowing costs directly attributable to

acquisition or construction of those tangible fixed assets which necessarily take a substantial period of

time to get ready for their intended use are capitalised. Other borrowing costs are recognised as an

expense in the period in which they are incurred.

Tangible fixed assets under construction are disclosed as capital work-in-progress.

Notes to the Financial Statements (continued)for the year ended 31 March 2013 (Currency : Indian Rupees)

32


Depreciation is provided on the straight-line method, over the estimated useful life of each asset as

determined by the management. The rates of depreciation prescribed in Schedule XIV to the Companies

Act, 1956 are considered as the minimum rates. If the management's estimate of the useful life of a

fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review

is shorter than that envisaged in the aforesaid schedule, depreciation is provided at a higher rate based

on the management's estimate of the useful life/remaining useful life. Pursuant to this policy, depreciation

of material handling equipments and tools has been provided at the following rates which are higher

than the corresponding rates prescribed in Schedule XIV:

Material Handling Trolleys – 3 years

Freehold land is not depreciated.

Depreciation is provided on a pro-rata basis i.e. from the date on which asset is ready for use.

Plant and machinery and furniture and fittings, costing individually INR 5,000 or less, are depreciated

fully in the year of purchase.

Depreciation for the year is recognised in the Statement of Profit and Loss.

A fixed asset is eliminated from the financial statements on disposal or when no further benefit is

expected from its use and disposal.

Losses arising from retirement or gains or losses arising from disposal of fixed assets which are carried

at cost are recognised in the Statement of Profit and Loss.

Intangible fixed assetsIntangible fixed assetsIntangible fixed assetsIntangible fixed assetsIntangible fixed assets

Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition,

an intangible asset is carried at its cost less any accumulated amortisation and any accumulated

impairment loss. Intangible assets comprising of software are amortised on a straight line basis over

their estimated useful lives and technical knowhow fees is amortised over a period of 18 months from

the date of technology being put to use.

Subsequent expenditure is capitalised only when it increases the future economic benefits from the

specific asset to which it relates.

An intangible asset is derecognised on disposal or when no future economic benefits are expect from

its use and disposal.

ImpairmentImpairmentImpairmentImpairmentImpairment

Fixed assets (tangible and intangible) are reviewed at each reporting date to determine if there is any

indication of impairment. For assets in respect of which any such indication exists and for intangible

assets mandatorily tested annually for impairment, the asset's recoverable amount is estimated. An

impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets

(cash generating unit or CGU) that generates cash inflows from continuing use that are largely

independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its net selling price.

In assessing value in use, the estimated future cash flows are discounted to their present value using

a pre-tax discount rate that reflects current market assessments of the time value of money and the

risks specific to the asset or CGU.



2.5 Fixed assets and depreciation/amortization (continued)

33


If such recoverable amount of asset or the recoverable amount of the cash generating unit to which

the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable

amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit

and Loss.

If at the balance sheet date there is an indication that a previously assessed impairment loss no longer

exists or has decreased, the assets or CGU's recoverable amount is estimated. The impairment loss is

reversed to the extent that the asset's carrying amount does not exceed the carrying amount that would

have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Such a reversal is recognised in the Statement of Profit and Loss; however, in the case of revalued

assets, the reversal is credited directly to revaluation surplus except to the extent that an impairment

loss on the same revalued asset was previously recognised as an expense in the Statement of Profit

and Loss.

2.6 Inventory

Inventories which comprise raw materials, work-in-progress, finished goods and stores and spares are

carried at the lower of cost and net realisable value.

Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in

bringing the inventories to their present location and condition.

In determining the cost, first in first out (FIFO) basis is used. In the case of manufactured inventories

and work in progress, fixed production overheads are allocated on the basis of normal capacity of

production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated

costs of completion and the estimated costs necessary to make the sale.

The net realisable value of work-in-progress is determined with reference to the selling prices of related

finished products. Raw materials and other supplies held for use in the production of finished products

are not written down below cost except in cases where material prices have declined and it is estimated

that the cost of the finished products will exceed their net realisable value.

The comparison of cost and net realisable value is made on an item-by-item basis.

2.7 Income Taxes

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance

with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences

between accounting income and taxable income for the period).

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities,

using the applicable tax rates and tax laws. Deferred tax is recognised in respect of timing differences

between taxable income and accounting income i.e. differences that originate in one period and are

capable of reversal in one or more subsequent periods. The deferred tax charge or credit and the

corresponding deferred tax liabilities or assets are recognised using the tax rates and tax laws that have

been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised

only to the extent there is reasonable certainty that the assets can be realised in future; however, where

there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are

recognised only if there is a virtual certainty supported by convincing evidence that sufficient future

taxable income will be available against which such deferred tax assets can be realised. Deferred tax

assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount

that is reasonably/virtually certain (as the case may be) to be realised.



2.5 Fixed assets and depreciation/amortization (continued)

34




2.7 Income Taxes (continued)

Minimum Alternative Tax ('MAT') under the provisions of the Income-tax Act, 1961 is recognised as

current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT

paid is recognised as an asset only when and to the extent there is convincing evidence that the

company will pay normal income tax during the period for which the MAT credit can be carried forward

for set- off against the normal tax liability. MAT credit recognized as an asset is reviewed at each

balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

2.8 Leases

Operating lease

Assets acquired under leases other than finance leases are classified as operating leases. The total lease

rentals (including scheduled rental increases) in respect of an asset taken on operating lease are

charged to the Statement of Profit and Loss on a straight line basis over the lease term unless another

systematic basis is more representative of the time pattern of the benefit.

2.9 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rates prevailing on the dates of the

transactions. Exchange differences arising on foreign currency transactions settled during the year are

recognised in the Statement of Profit and Loss of that year.

Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated

at the closing exchange rates. The resultant exchange differences are recognised in the Statement of

Profit and Loss.

The premium or discount on forward exchange contracts not relating to firm commitments or highly

probable forecast transactions and not intended for trading or speculation purpose is amortised as

expense or income over the life of the contract.

Forward exchange contracts relating to firm commitments or highly probable forecast transactions are

marked to market and the resultant net exchange loss is recorded in accordance with the concept of

prudence.

2.10 Employee benefits

(a)(a)(a)(a)(a) Short term employment benefitsShort term employment benefitsShort term employment benefitsShort term employment benefitsShort term employment benefits

Employee benefits payable wholly within the twelve months of receiving employee services are classified

as short-term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The

undiscounted amount of short-term employee benefits to be paid in exchange for employee services

is recognised as an expense as the related service is rendered by employees.

(b)(b)(b)(b)(b) PPPPPost employment benefitsost employment benefitsost employment benefitsost employment benefitsost employment benefits

Defined contribution plan:Defined contribution plan:Defined contribution plan:Defined contribution plan:Defined contribution plan:

A defined contribution plan is a post-employment benefit plan under which an entity pays specified

contributions to a separate entity and has no obligation to pay any further amounts. The Company

makes specified monthly contributions towards employee provident fund to Government administered

provident fund scheme which is a defined contribution plan. The Company's contribution is recognised

as an expense in the Statement of Profit and Loss during the period in which the employee renders

the related service.

35


Notes to the Financial Statements (continued)f/or the year ended 31 March 2013 (Currency : Indian Rupees)


2.10 Employee benefits (continued)

Defined benefit plan:Defined benefit plan:Defined benefit plan:Defined benefit plan:Defined benefit plan:

The Company's gratuity benefit scheme is a defined benefit plan funded with Life Insurance Corporation

of India (‘LIC’). The Company's obligation in respect of a defined benefit plan is calculated by estimatingthe amount of future benefit that employees have earned in return for their service in the current and

prior periods; that benefit is discounted to determine its present value. Any unrecognised past service

costs and the fair value of any plan assets are deducted. The calculation of the Company's obligation

under the plan is performed annually by a qualified independent actuary using the projected unit credit

method.

The Company recognises all actuarial gains and losses arising from defined benefit plans immediately

in the Statement of Profit and Loss. All expenses related to defined benefit plans are recognised in

employee benefits expense in the Statement of Profit and Loss. When the benefits of a plan are

improved, the portion of the increased benefit related to past service by employees is recognised in

Statement of Profit and Loss on a straight-line basis over the average period until the benefits become

vested. The Company recognises gains and losses on the curtailment or settlement of a defined benefitplan when the curtailment or settlement occurs.

(c)(c)(c)(c)(c) Compensated absencesCompensated absencesCompensated absencesCompensated absencesCompensated absences

The employees can carry-forward a portion of the unutilised accrued compensated absences and utilise

it in future service periods or receive cash compensation, on termination of employment. Since the

compensates absences do not fall due wholly with in twelve months after the end of the period in which

the employees render the related service and are also not expected to be utilised wholly within twelve

months after the end of such period, benefit is classified as a long-term employee benefit. The

Company records an obligation for such compensated absences in the period in which the employeerenders the services that increase this entitlement. The obligation is measured on the basis of independent

actuarial valuation using the projected unit credit method.

2.11 Earnings per share

Basic EPS is computed using net profit attributable to equity shareholders divided by the weighted

average number of equity shares outstanding during the year. Diluted EPS is computed using the

weighted average number of equity and dilutive equity equivalent shares outstanding during the period,

except where the results would be anti-dilutive.

2.12 Provisions

A provision is recognised if, as a result of a past event, the Company has a present obligation that

can be estimated reliably, and it is probable that an outflow of economic benefits will be required to

settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle

the present obligation at the balance sheet date. The provisions are measured on an undiscounted

basis.

Contingencies

Provision in respect of loss contingencies relating to claims, litigation, assessment, fines, penalties, etc.are recognised when it is probable that a liability has been incurred and the amount can be estimated

reliably.

2.13 Contingent liabilities

A contingent liability exists when there is a possible but not probable obligation, or a present obligation

that may, but probably will not, require an outflow of resources, or a present obligation whose amount

cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless

the possibility of outflow of resources is remote.

36


Notes to the Financial Statements (continued)

as at 31 March 2013 (Currency : Indian Rupees)

31 March 2013 31 March 2012

3 SHARE CAPITAL

Authorised:28,000,000 (previous year 28,000,000)equity shares of Rs. 10 each. 280,000,000 280,000,000

280,000,000 280,000,000

Issued, Subscribed and Fully Paidup:27,320,540 (previous year 27,320,540)equity shares of Rs. 10 each, fully paid-up. 273,205,400 273,205,400

273,205,400 273,205,400

a. Reconciliation of Equity shares outstanding at the beginning and at the end of the year

31 March 2013 31 March 2012

Equity Shares Number Amount Number Amount

At the commencement and 27,320,540 273,205,400 27,320,540 273,205,400at the end of the period

b. Rights, preferences and restrictions attached to equity sharesThe Company has a single class of equity shares having a face value of Rs 10 each. Accordingly. all equity shares rankequally with regard to dividend and share in the company's residual assets. The equity shares are entitled to receive dividendas declared from time to time. The voting rights of an equity share holder on a poll (not on show of hands) are in proportionto its share of the paid-up capital of the company. Voting rights cannot be exercised in respect of shares on which any callor other sum presently payable have not been paid.

On Winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company,remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

c. Shares held by holding/ultimate holding company

31 March 2013 31 March 2012

Equity Share of Rs.10 each fully paid up Number Amount Number Amount

T-H Licensing Inc., U. S. A., a wholly 22,924,796 229,247,960 22,924,796 229,247,960owned subsidiary of Fairfield - - - -Manufacturing Company Inc., U.S.A.

The ultimate holding company isOC Oerlikon Corporation A.G. Pfaffikon.

d. Particulars of Shareholders holding more than 5% shares of a class of shares31 March 2013 31 March 2012

Equity Share of Rs.10 each fully paid up Number % of total Number % of totalshares in shares inthe class the class

T-H Licensing Inc., U. S. A. 22,924,796 83.91% 22,924,796 83.91%

4 Reserves and surplus 31 March 2013 31 March 2012Capital reserveSpecial capital incentive (refer note below)At the commencement and at the end of the year 5,500,000 5,500,000

Surplus (Profit and loss balance)At the commencement of the year 583,687,914 273,621,052Profit for the year 286,439,027 310,066,862

At the end of the year 870,126,941 583,687,914

Total reserves and surplus 875,626,941 589,187,914

Note: The Company had received cash subsidy from State Industrial and Investment Corporation of MaharashtraLimited (SICOM) under the 1988 package scheme of incentives in the nature of promoters' contribution.

37




5 Long-term borrowingsNon current portion Current Portion

31 Mar 2013 31 Mar 2012 31 Mar 2013 31 Mar 2012Term loans- from banks (secured)Vehicle loans 2,069,106 2,817,300 2,873,972 2,062,576[Refer Note (a) below]

Loans and advancesfrom related partiesFrom T- H Licensing Inc., U. S. A.,the holding company 192,675,000 206,520,000 27,525,000 25,815,000[Refer Note (b) below]From Fairfield ManufacturingCompany Inc., U.S.A. 113,928,972 140,434,200 22,785,800 23,405,700[Refer Note (c) below]

308,673,078 349,771,500 53,184,772* 51,283,276*

* Amount disclosed under "other current liabilities" (Refer note 9)

Notes:a) Vehicle loan is secured by a specific charge on respective vehicle purchased. Details of each loan

taken are stated as below:-

Name of the bank No. of instalments Date of maturity Rate of interest Instalment amount

Axis Bank Ltd 36 05.12.2013 8.97% 25,240

Axis Bank Ltd 36 05.12.2013 8.97% 25,240

HDFC Bank Ltd 36 06.05.2014 11.50% 22,864

HDFC Bank Ltd 36 07.03.2014 11.50% 22,260

HDFC Bank Ltd 36 05.11.2014 11.25% 23,493

HDFC Bank Ltd 36 05.01.2015 11.50% 29,678

Axis Bank Ltd 36 01.06.2014 11.20% 59,101

HDFC Bank Ltd 36 07.06.2015 11.50% 26,381

HDFC Bank Ltd 36 05.01.2016 10.50% 25,612

HDFC Bank Ltd 36 05.01.2016 10.50% 25,612

b) Outstanding external commercial borrowing of USD 4,000,000 (previous year: USD 4,500,000) from T-HLicensing Inc., U. S. A. is secured by creation of hypothecation charge on all the fixed and current assets,excluding land and building. The entire Loan was originally repayable on 28 February 2011. On 21January 2011, the Company received letter of Intent from T-H Licensing Inc., U. S. A. for extension of periodof repayment of said loan by another 60 months, with all other terms and conditions remaining unchanged.Based on the letter of Intent, the Company has filed an application with Reserve Bank of India (RBI) throughan Authorised Dealer(AD). During the previous year, RBI through the AD has provided the requisite approvalsthereby confirming the terms and conditions as per the agreement between the Company and TH Licensingwith regards the said loan.

The loan is repayable in minimum equated annual instalments of USD 500,000 from the date of letter ofextension and then balance left over, if any will be paid in single bullet on due date. The interest on thesaid loan is 400 basis points over six months LIBOR payable at monthly intervals. During current year, oneinstallment of USD 500,000 has been paid on 28 February 2013.

c) Fairfield Manufacturing Company Inc., U.S.A. (FMC) had paid a sum of USD 11,967,023 (equivalent Rs.543,792,583) to GE Capital Services India (GECSI) in fulfillment of its obligation under the corporateguarantee executed to secure the loan availed by the Company from GECSI. FMC had agreed to treat thesaid sum as External commercial loan to the Company, subject to the terms and conditions set forth in theletter of intent date January 15, 2004. Reserve Bank of India (RBI) and Ministry of Finance had not approvedthe application made by the Company to treat the payment as external commercial loan. Further, RBI has

38


not approved the payment of interest on the amount paid by FMC and repayment of principal amountexceeding Rs. 543,792,583. As at 31 March 2013 the Company has repaid USD 8,967,023 (Rs 407,077,811)[as at 31 March 2012 USD 8,467,023 (Rs 379,952,683)] to FMC.

As at the year end, the Company owes USD 3,000,000 (previous year: USD 3,500,000) equivalent Rs136,714,772 (previous year: Rs 163,839,900) (maximum liability restricted by RBI to Rs. 136,714,772(previous year: Rs 163,839,900)) to FMC towards the said loan.

The entire Loan was originally repayable on 31 March 2011. On 21 January 2011, the Company receivedletter of Intent from FMC for extension of period of repayment of said loan by another 60 months, withall other terms and conditions remaining unchanged

The said loan is secured by creation of hypothecation charge on all the fixed and current assets, excludingland and building.

As per the revised agreement, the loan is now repayable in minimum equated annual installments of USD500,000 from the date of letter of extension and then balance left over, if any will be paid in single bulleton due date. Accordingly, the current payout portion computed above has been computed at the applicableconversion rate considered at the balance sheet date for the said loan.



6 Deferred tax liabilities (net)31 March 2013 31 March 2012

Deferred tax liabilities

Excess of depreciation/amortisation on fixed assets under income-taxlaw over depreciation/amortisation provided in accounts 27,544,801 26,029,130

27,544,801 26,029,130

Deferred tax assets

Provision for employee benefits (Disallowance under Section 43Bof Income Tax Act, 1961) 12,762,011 11,057,403

Provision for doubtful receivables / advances 397,549 347,851

Others 6,738,348 5,140,520

19,897,908 16,545,774

Deferred tax liability (net) 7,646,893 9,483,356

8 Trade payables31 March 2013 31 March 2012

Trade Payable 392,425,448 421,557,711

392,425,448 421,557,711

For dues to micro and small suppliers, refer to note 28

7 ProvisionsLong Term Short Term

31 Mar 2013 31 Mar 2012 31 Mar 2013 31 Mar 2012Provision for employee benefitsGratuity (Refer note 39) 6,312,187 1,636,535 406,597 137,487Compensated absences 8,652,797 8,756,818 3,606,494 2,167,225Bonus - - 5,467,170 7,236,616

Other provisionsProvision for current tax(net of advance tax Rs 260,459,375,previous year Rs. 116,728,669) - - 11,439,865 35,986,339

14,964,984 10,393,353 20,920,126 45,527,667

39




9 Other current liabilities31 March 2013 31 March 2012

Current maturities of long-term borrowings (for details refer note 5) 53,184,772 51,283,276Interest accrued and not due on borrowings 38,412 25,848Advances received from customers 11,264,254 14,577,552

Other payablesEmployee payables 27,725,950 25,242,058Provident fund payable 1,432,859 1,279,960Profession tax payable 143,200 143,050Excise duty payable 1,975,049 3,016,268Sales tax payable 4,672,408 4,672,408Tax deducted at source payable 2,562,538 1,043,953Other liabilities 12,017,652 14,101,646Creditors for capital goods 83,316,601 48,218,548

198,333,695 163,604,56710 FIXED ASSETS

Note :a) Vehicles costing Rs 11,493,753 (previous year Rs 8,660,531) are under lien with banks towards the vehicle loans.b) Figures in brackets and italics pertain to the previous year.

TANGIBLE ASSETS

Freehold land 9,751,561 - - 9,751,561 - - - - 9,751,561(9,751,561) (-) (-) (9,751,561) (-) (-) (-) (-) (9,751,561)

Borewell 634,167 677,282 - 1,311,449 81,918 18,492 - 100,410 1,211,039(388,116) (246,051) (-) (634,167) (71,870) (10,048) (-) (81,918) (552,249)

Factory building 114,128,703 10,616,867 - 124,745,570 35,714,047 4,002,449 - 39,716,496 85,029,074(102,740,000) (11,388,703) (-) (114,128,703) (32,152,344) (3,561,703) (-) (35,714,047) (78,414,656)

Plant and machinery 1,213,394,473 130,422,188 10,011,841 1,333,804,820 740,164,902 77,418,705 7,689,033 809,894,574 523,910,246(1,079,724,328) (136,106,436) (2,436,291) (1,213,394,473) (664,489,744) (77,823,604) (2,148,446) (740,164,902) (473,229,571)

Office equipments 6,172,082 3,079,677 1,242,793 8,008,966 1,659,154 386,747 714,190 1,331,711 6,677,255(4,982,192) (1,200,242) (10,352) (6,172,082) (1,402,540) (262,153) (5,539) (1,659,154) (4,512,928)

Furniture and fittings 7,687,137 2,111,248 350,624 9,447,761 3,588,839 545,569 294,071 3,840,337 5,607,424(6,228,540) (1,458,597) (-) (7,687,137) (3,155,939) (432,900) (-) (3,588,839) (4,098,298)

Computer 15,782,760 1,328,877 2,543,923 14,567,714 12,381,154 1,116,335 2,524,058 10,973,431 3,594,283(15,404,361) (1,092,306) (713,907) (15,782,760) (11,995,099) (996,909) (610,854) (12,381,154) (3,401,606)

Vehicles [Refer Note (a) below] 12,794,636 3,143,324 2,353,381 13,584,579 3,967,594 1,100,550 2,299,341 2,768,803 10,815,776(6,974,788) (5,819,848) (-) (12,794,636) (3,021,841) (945,753) (-) (3,967,594) (8,827,042)

Total 1,380,345,519 151,379,463 16,502,562 1,515,222,420 797,557,608 84,588,847 13,520,693 868,625,762 646,596,658(1,226,193,886) (157,312,183) (3,160,550) (1,380,345,519) (716,289,377) (84,033,070) (2,764,839) (797,557,608) (582,787,911)

INTANGIBLE ASSETS

Technical know - how 88,507,364 - - 88,507,364 88,507,364 - - 88,507,364 -(88,507,364) (-) (-) (88,507,364) (88,507,364) - (-) (88,507,364) -

Software 625,000 424,826 - 1,049,826 104,919 166,884 - 271,803 778,023(625,000) (-) (-) (625,000) (3,606) (101,313) (-) (104,919) (520,081)

Total 89,132,364 424,826 - 89,557,190 88,612,283 166,884 - 88,779,167 778,023

(89,132,364) (-) (-) (89,132,364) (88,510,970) (101,313) (-) (88,612,283) (520,081)

Capital work-in-progressBalance as at 31 March 2013 161,926,825

(22,673,096)

Gross Block Accumulated depreciation Net& amortization Block

Particulars As at Additions Deletions/ As at As at Charge On deletions/ As at As at

1 April during Adjustments 31 March 1 April For adjustments 31 March 31 March

2012 the year during the year 2013 2012 the Year 2012 2013

40




12 Other non-current assets

31 March 2013 31 March 2012

Bank deposit ( due to mature after 12 months fromthe reporting date) 2,000,000 1,000,000

2,000,000 1,000,000

Note:

Bank deposit of Rs. 2,000,000 (previous year: Rs.Nil) is lying under lien with Bank towards MaharashtraPollution Control Board.

13 Inventories

31 March 2013 31 March 2012

Raw materials [Refer Note (a) below] 105,625,847 123,069,289Work-in-progress 104,725,563 132,960,910Finished goods 56,515,899 56,699,619Stores and spares 49,664,078 56,356,685Packing materials 467,684 598,527

316,999,071 369,685,030

Note

a) Includes stock in transit amounting to Rs 426,670 (previous year: Rs 1,443,225)

b) In the year ended 31 March 2013 the write - down of inventories to net realisable value amountedto Rs 2,761,393 (previous year: Rs 3,670,345)

11 Long-term loans and advancesNon Current Portion Current Portion

31 Mar 2013 31 Mar 2012 31 Mar 2013 31 Mar 2012Unsecured, considered good

To parties other than

related parties

Capital advances 45,260,060 22,866,267 - -

Security deposits 9,266,825 7,943,825 596,697 596,697

Balances with excise, customs and

sales tax authorities 3,938,262 3,938,262 74,028,844 49,500,070

Prepaid expenses 203,198 141,692 3,083,921 3,035,774Advance tax recoverable andTax deducted at source(net of provision for taxRs. 23,675,000, previousyear Rs. 23,675,000) 7,194,129 7,194,129 - -

65,862,474 42,084,175 77,709,462* 53,132,541*

* Amount disclosed under short-term loans and advances, refer note 16

41




14 Trade receivables31 March 2013 31 March 2012

(Unsecured)Receivables outstanding for a period exceeding six monthsfrom the date they are due for payment- Considered good 392,344 232,935- Doubtful 392,344 460,197

784,688 693,132Less: Provision for doubtful receivables 392,344 460,197

(A) 392,344 232,935Other receivables-Considered good 675,665,433 671,568,406-Doubtful 262,944 -

675,928,377 671,568,406Less: Provision for doubtful receivables 262,944 -

(B) 675,665,433 671,568,406

(A) + (B) 676,057,777 671,801,341

15 Cash and bank balances31 March 2013 31 March 2012

Cash and cash equivalentsCash on hand 135,409 300,703

Balances with banks

- In current accounts 22,609,705 34,526,328

- Exchange earners foreign currency account(USD 1,861,144.75 previous year USD 831,243.87) 100,185,422 42,252,126

122,930,536 77,079,157Other bank balances

Deposit account with banks (Refer note (a) below) 11,024,471 22,306

133,955,007 77,101,463Note:a) Fixed Deposit of Rs. 22,306 (Previous year: Rs. 21,392) is lying under lien with Bank towards

Maharashtra Pollution Control Board.

31 March 2013 31 March 2012Details of depositsDetails of depositsDetails of depositsDetails of depositsDetails of depositsBank balance available on demand/deposit with originalmaturity of 3 months or less included under‘Cash and cash equivalents’ - - - - - -

Bank deposits due to mature within 12 months of thereporting date included under‘other bank balances’ (refer note 15) 11,024,471 11,024,471 11,024,471 11,024,471 11,024,471 22,306

Bank deposits due to mature after 12 months of thereporting date included under ‘other noncurrent assets’ (refer note 12) 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 1,000,000

13,024,47113,024,47113,024,47113,024,47113,024,471 1,022,306

42


16 Short-term loans and advances31 March 2013 31 March 2012

Unsecured, considered goodCurrent portion of long-term loans and advances(refer note 11) 77,709,462 53,132,541

Other short-term loans and advancesTo parties other than related partiesMAT Credit entitlement - 33,950,539Advance for supply of goodsConsidered good 7,682,080 7,173,644Considered doubtful 570,012 611,927

8,252,092 7,785,571Less:- Provision for doubtful advances 570,012 611,927

7,682,080 7,173,644

85,391,542 94,256,724

17 Other current assets31 March 2013 31 March 2012

(Unsecured and considered good)Interest accrued on deposits 1,418,161 542,825Insurance claim receivable 811,027 278,822

2,229,188 821,647



43



for the year ended 31 March 2013 (Currency : Indian Rupees)

18 Revenue from operations31 March 2013 31 March 2012

Sale of product (gross) 2,372,268,995 2,579,418,452Less:- Excise duty 119,164,597 114,679,105

Sale of product (net) 2,253,104,398 2,464,739,347

Break-up of revenue from sale of products31 March 2013 31 March 2012

Automotive transmission gears and gear boxes 2,253,104,398 2,464,739,347

2,253,104,398 2,464,739,347

19 Other operating revenue31 March 2013 31 March 2012

Scrap sales 24,760,860 34,733,146Job work charges 108,934 249,565Sales tax refund 7,377,107 9,712,127Development tooling income 8,011,489 3,719,289

40,258,390 48,414,12720 Other income

31 March 2013 31 March 2012Interest income on deposits 1,467,139 1,366,615

Net gain on account of foreign exchange fluctuations 18,792,138 -Other non-operating income 4,856,021 6,534,889Liabilities / provisions no longer required written - back 4,340,679 11,737,532Profit on sale of fixed assets (net) 69,417 482,078

29,525,394 20,121,114

21 Cost of materials consumed31 March 2013 31 March 2012

Raw materials and packing materials consumedInventory of materials at the beginning of the year 123,069,289 112,751,603Purchases 1,007,213,081 1,277,391,261

1,130,282,370 1,390,142,864Less: Inventory of materials at the end of the year 105,625,847 123,069,289

1,024,656,523 1,267,073,575Packing material consumed 27,727,404 31,817,435Freight inwards 14,733,928 17,007,640

1,067,117,855 1,315,898,650

22 Changes in inventories of finished goods and work in progress31 March 2013 31 March 2012

Opening stock- Work-in-progress 132,960,910 112,347,152- Finished goods 56,699,619 25,573,794Closing stock- Work-in-progress 104,725,563 132,960,910- Finished goods 56,515,899 56,699,619

Decrease/(increase) in finished goods and work-in-progress 28,419,067 (51,739,583)

44



23 Employee benefits31 March 2013 31 March 2012

Salaries, wages and bonus 175,147,621 160,667,925Contribution to provident fund and other funds 15,395,202 13,113,561Compensated absences 3,048,725 4,721,844Staff welfare expenses 17,273,780 14,090,308

210,865,328 192,593,63824 Finance costs

31 March 2013 31 March 2012

Interest expense on- Loans 12,057,914 11,629,664- Others 4,966,973 2,477,568Net loss on foreign currency transactions and translationto the extent regarded as borrowing cost 11,578,762 16,255,133Bill discounting charges and other bank charges 670,570 1,276,915

29,274,219 31,639,280

25 Depreciation and amortisation31 March 2013 31 March 2012

Depreciation of tangible fixed assets 84,588,847 84,033,070Amortisation of intangible fixed assets 166,884 101,313

84,755,731 84,134,38326 Other expenses

31 March 2013 31 March 2012

Consumption of stores and spare parts 77,465,511 101,356,65Excise Duty related to increase/decrease in inventory of finished goods (1,039,866) 2,471,501Labour charges for resharpening tools 19,671,030 24,397,956Power and fuel 152,645,736 161,774,803Job work charges 61,978,480 77,018,133Insurance 4,346,368 3,777,582Rent [Refer note 34] 1,040,718 935,588Rates and taxes 8,958,866 11,840,810Repairs and maintenance:- Building 9,285,440 7,179,940- Plant and machinery 27,241,567 32,471,680- Others 7,314,542 8,701,759Legal and professional fees 6,110,151 6,209,195Travelling and conveyance 15,366,173 11,632,782Communication 3,072,333 2,737,833Freight outward and forwarding expenses 20,734,862 24,143,078Directors’ sitting fees 1,100,000 690,000Commission to Directors* 2,500,000 -Payment to Auditors’ (excluding service tax)- Statutory audit 2,250,000 2,250,000- Tax audit 250,000 250,000- For other matters 204,700 -- Out - of - pocket expenses 129,620 115,542Trade mark fees 16,132,601 18,321,653IT Fees 1,563,459 -Management Fees by India Country office 7,817,200 -Net loss on account of foreign exchange fluctuations - 3,943,361Provision for doubtful receivables 195,091 -Provision for doubtful advances - 8,373Miscellaneous expenses 18,385,836 15,074,279

464,720,418 517,302,502*Commission to Directors subject to approval in ensuing Annual General Meeting

45


27 Contingent liabilities and commitments (to the extent not provided for):

A) Contingent liabilities

(a) Bills discounted with banks and remaining outstanding which are yet to mature Rs Nil (previousyear: Rs. 23,017,544);

(b) Demands raised by sales tax authorities against the Company not acknowledged as debts and notprovided for Rs. 7,811,284 (previous year: Rs. 7,811,284), in respect of which the company haspreferred an appeal;

(c) Demands raised by service tax authorities against the Company not acknowledged as debts andnot provided for on technical know how, in respect of which the company has preferred an appeal,aggregating Rs. 2,479,821(previous year: Rs. 2,479,821).

(d) Demand raised by Central Excise and Customs SVB GAAT valuation cell Mumbai against the Com-pany and not acknowledged as debt and not provided for custom duty with interest aggregating toRs. 109,600,000 on US$ 20 lakhs (equivalent Rs. 110,100,000) towards technical know how en-tered with Fairfield Manufacturing Co. dated 12 May 2003. The Company has filed a writ petitiondate 22 April 2013.

(e) Demand raised by Central Excise and Customs against the company not acknowledged as debtand not provided for penalty of Rs. 204,329 for sending the goods for job work under privatechallans, in respect of which company has preferred an appeal.

B) Capital commitments

Estimated amount of contracts, net of capital advances of Rs 45,260,060 (previous year: Rs. 22,866,867),remaining to be executed on capital account and not provided for Rs. 25,236,409 (previous year: Rs.177,488,884).

28 Dues to micro, small and medium enterprise suppliers

31 March 2013 31 March 2012

The Amount remaining unpaid to micro and smallsuppliers as at the end of the year- Principal 4,865,058 6,538,749- Interest Nil Nil

The amount of interest paid by the buyer as per the MicroSmall and Medium Enterprise Development Act, 2006(MSMED Act, 2006) Nil Nil

The amounts of the payments made to micro and smallsuppliers beyond the appointed day during eachaccounting year Nil Nil

The amount of interest due and payable for the periodof delay in making payment (which have been paid butbeyond the appointed day during the year) but withoutadding the interest specified under the MSMED Act. Nil Nil

Amount of interest accrued and remaining unpaid at theend of the accounting year Nil Nil

The amount of future interest remaining due and payableeven in succeeding years, until such date when theinterest dues as above are actually paid to the smallenterprise for the purpose of disallowance as a deductibleof disallowance as a deductible expenditure under theMSMED Act, 2006. Nil Nil

On the basis of information and records available with the Company, the above disclosures are made inrespect of amounts due to the micro, small and medium enterprises, who have registered with the relevantcompetent authorities. This has been relied upon by the auditors.


aor the year ended 31 March 2013 (Currency : Indian Rupees)

46


ParticularsForeignCurrency

Amount inForeignCurrency

Amountequivalentin Rupees

2013 20122013 2012

30 Transfer pricing

The Company’s management is of the opinion that its international transactions are at arm’s length as perthe independent accountants report for the year ended 31 March 2012. Further, the Indian Finance Bill,2012 had sought to bring in certain class of domestic transactions in the ambit of the transfer pricingregulations with effect from 1 April 2012.

The management is yet to carry out a detailed domestic transfer pricing study/ analysis for the year ending31 March 2013 in accordance with these regulations and expects to commission and complete the sameby the specified due date. Management continues to believe that its international transactions post March2012 and the specified domestic transactions covered by the new regulations are at arm's length and thatthe transfer pricing legislation will not have any impact on these financial statements, particularly onamount of tax expense and that of provision of taxation.



II. Un hedged foreign currency exposure

Foreign currency exposures on account of trade receivables/trade payables not hedged by deriva-tive instruments are as follows:

Forward Exchange INR USD 17 2,400,000 Sell Hedging

Contracts (29) (4,700,000)

CategoryLocal

CurrencyCurrencyHedged

Numberof

contracts

Amount inUSD

Buy/Sell

Figures in brackets pertain to the previous year.

29 Un hedged foreign currency exposure

The Company uses forward exchange contracts to hedge against its foreign currency exposures relating tomovement in foreign exchange rate in accounts receivables. The Company does not enter into any for-ward contracts for trading or speculation purposes.

I. Outstanding forward contracts

Purpose

Foreign currency payables– representing trade payables USD 1,810,623 99,674,808 342,594 17,688,155and capital creditors Euro 6,497 457,310 3,693 255,449

CHF 62,023 3,602,309 - -

– representing advances USD 818,741 44,072,698 333,740 16,964,678Euro 409 28,076 408 27,623

– Loan from T H Licensing Inc. USD 4,000,000 220,200,000 4,500,000 232,335,000U.S.A. [(External commercialborrowing (‘ECB’)]

- Loan from FMC* USD 3,000,000 136,714,772 3,500,000 163,839,900

Foreign currency receivables– representing trade USD 5,755,790 309,834,191 3,633,920 184,037,200receivables

Amount inForeignCurrency

Amountequivalentin Rupees

* amounts have been restricted to maximum rupee equivalent. Refer note 5 (c).

47


31 a) Consumption of raw materials, packing material and stores, spare parts and tools:

Particulars ConsumptionMarch 31, 2013

Forgings and assembly components 957,311,557 (1,184,478,978)

Round Bars 67,344,964 (82,594,600)

Packing materials 27,727,404 (31,817,435)

Freight Inward 14,733,928(17,007,640)

Total Current Year 1,067,117,853

(Total Previous Year) (1,315,898,652)

Figures in brackets and italics pertain to the previous year.


31 Mar 2013

Value Percentage Value Percentage

Imported 78,688,444 7.37 71,125,193 5.40

Indigenous 988,429,409 92.63 1,244,773,459 94.60

Total 1,067,117,853 100.00 1,315,898,652 100.00

31 March 201231 March 201231 March 201231 March 201231 March 2012

b) Particulars of Finished Goods

Particulars Sales Closing Opening Values Inventory Inventory

Automotive Transmission Gears 2,253,104,398 56,515,899 56,699,619and gear boxes

Figures in brackets and italics (2,464,739,347) (56,699,619) (25,573,794)pertain to the previous year.

Figures in brackets and italics pertain to the previous year.

c) Details of stores, spare parts and tools consumed comprising of:

31 Mar 2013

Value Percentage Value Percentage

Imported 2,299,529 2.97 4,447,643 4.39

Indigenous 75,165,982 97.03 96,918,011 95.61

Total 77,465,511 100.00 101,365,654 100.00

31 March 201231 March 201231 March 201231 March 201231 March 2012

Details of Raw material Consumed

48


32 Value of Imports on CIF basis:

31 March 2013 31 March 2012

Raw materials, stores and spare parts 91,669,378 107,563,204

Capital goods 175,204,290 90,609,000

33 Expenditure and earnings in foreign currency (on accrual basis):

Expenditure

31 March 2013 31 March 2012

Travelling 1,889,520 1,196,095

Trade mark fees 16,132,601 18,321,653

Interest 11,523,758 11,192,523

IT Fees 1,563,459 -

Others 17,294 11,513

Earnings (Gross)

31 March 2013 31 March 2012

FOB value of exports 1,248,720,609 1,285,420,620

Development tooling income 5,750,426 3,209,289



34 Details of lease as lessee:

Operating lease

The Company leases office, guest house and warehouse facilities under cancellable operating lease agree-ments that are renewable on a periodic basis at the option of both the lessor and the lessee. Rentalpayments under such leases are Rs 1,040,718 (Previous year Rs. 935,588).

35 Earnings per share

Computation of earnings per share(Basic and Diluted) 31 March 2013 31 March 2012

Net profit attributable to equity share holders (A) 286,439,027 310,066,862

Weighted average number of equity shares of Rs. 10 each 27,320,540 27,320,540outstanding during the year (B)

Basic and diluted earnings per share 10.48 11.35(Rs per equity share of Rs 10 each) (A/B)

36 Segment reporting:

a) Primary segment:

In accordance with the requirements of Accounting Standard 17, segmental reporting, the Com-pany has determined its business segment i.e., automotive transmission gears as its primary seg-ment and geographical segment as its secondary segment. Since 100% of the Company’s businessis from automotive transmission gears, there are no other primary reportable segments. Thus, thesegment revenue, segment result, total carrying amount of segment assets, total carrying amount ofsegment liabilities, total cost incurred to acquire segment assets, the total amount of charge fordepreciation during the year are all as reflected in the financial statements as of and for the yearended 31 March 2013.

49


37 Related party transactions

(a) Names of related parties and nature of relationship where control exists

Sr. No. Category of related parties Names

1 Ultimate holding company OC Oerlikon Corporation A. G. Pfaffikon2 Subsidiary of ultimate holding company Fairfield Manufacturing Company Inc., U. S. A.3 Holding company TH Licensing Inc., U. S. A.

Names of parties with whom transactions have taken place

4 Fellow subsidiaries Graziano Transmission India (Private) Ltd (GTIPL)Oerlikon Balzers Coating India Ltd (Balzers)Oerlikon Drive Systems (SUZHOU) Co. Ltd.(earlier know as Oerlikon (China) TechnologyCo. Ltd. (OCTL))Oerlikon IT Solutions Ltd. PFAFFIKONOerlikon Graziano SPAOerlikon Textile India Pvt. Ltd.

5 Key Management personnel Mr. D. E. Jacob - Managing Director


b) Secondary segments (Geographical segment):

Particulars India Outside India Total

Revenue from external customers 1,038,741,270 1,254,621,517 2,293,362,787

(1,224,523,565) (1,288,629,909) (2,513,153,474)

Carrying amount of segment assets 1,594,224,209 483,125,675 2,077,349,884

(1,426,027,132) (424,598,965) (1,850,626,097)

Additions to fixed assets during the year 151,804,289 - 151,804,289

(157,312,183) - (157,312,183)

Figures in brackets pertain to the previous year.

50




37 Related party transactions (Continued)

b) Transactions with related parties

Notes:

Figures in italics and brackets pertain to the previous year.

* The above remuneration does not include contribution to Gratuity fund and leave encashment /entitlementas this contribution is a lump sum amount based on actuarial valuation.

# Includes Goods in transit Rs. 443,642 (previous year: Rs 1,443,225)

@ Includes Goods in transit Rs. 1,238,625 (previous year: Nil)

Purchase of fixed assets @ - 64,464,948 - - - 64,464,948(-) (46,529,390) (-) (-) (-) (46,529,390)

Purchase of raw materials, - 13,085,032 - 26,719,321 - 39,804,353services, stores and spare (-) (25,330,872) (-) (19,120,048) (-) (44,450,920)parts and job work#

Trade mark fees 16,132,601 - - - - 16,132,601(18,321,653) (-) (-) (-) (-) (18,321,653)

Interest expense - - 11,523,758 - - 11,523,758(-) (-) (11,192,523) (-) (-) (11,192,523)

Sale of goods ( net ) - 1,047,120,201 - 129,677,500 - 1,176,797,701(-) (1,206,025,424) (-) (43,829,971) (-) (1,249,855,395)

Sale of fixed asset - 2,309,915 - - - 2,309,915(-) (-) (-) (-) (-) (-)

Development tooling income - 5,750,426 - - - 5,750,426(-) (3,209,289) (-) (-) (-) (3,209,289)

Remuneration to key - - - - 6,483,760 6,483,760management personnel* (-) (-) (-) (-) (4,868,763) (4,868,763)

Loan repayment - 27,125,000 27,130,000 - - 54,255,000(-) (23,115,000) (24,740,000) (-) (-) (47,855,000)

Receivables from related - 373,206,256 - 57,766,179 - 430,972,435parties (-) (387,249,997) (-) (29,341,213) (-) (416,591,210)

Payables to related parties 3,602,308 74,971,834 - 15,875,004 - 94,449,996(79,751) (114,692,984) (-) (7,113,290) (-) (121,886,025)

Secured loan outstanding - 136,714,772 220,200,000 - - 356,914,772(-) (163,839,900) (232,335,000) (-) (-) (396,174,900)

Subsidiary ofultimateholding

company

ParticularsUltimateholding

company

Holdingcompany

Fellowsubsidiaries

Keymanagement

personnelTOTAL

51


37 Related party transactions (Continued)

c) Particulars of transactions of fellow subsidiaries during the year ended 31 March2013 and balances as at 31 March 2013

Name of theRelated party

Receivable /(Payable)

at31 March

2012

Transactionvalue

during theyear ended31 March

2012

Receivable /(Payable)

at31 March

2013

Transactionvalue

during theyear ended31 March

2013

Description

Graziano Transmission India Purchase of 2,647,595 - 260,144 -

(Private) Ltd Raw Material

Sales 1,466,970 - 1,105,653

Receivable 1,491,935 448,012

Payables - 3,034,331 - 319,027

Oerlikon Balzers Purchase of Job work 14,691,067 - 18,585,053 -

Coating India Ltd Payables - 4,935,667 - 6,604,161

Oerlikon Drive Systems Sales 128,210,530 - 42,724,318 -----

( SUZHOU) Co. Ltd. Receivable - 56,274,244 ----- 28,893,201

Oerlikon Graziano SPA Purchase - - 84.749 -

Consumable Tools

Receivables - - - -

Oerlikon Textile India Pvt. Ltd. Cost of Services 7,817,200 - 190,102 -

received

Payables - 7,905,062 - 190,102

Oerlikon IT Solutions Ltd. Cost of Services 1,563,459 - - -

PFAFFIKON received

Receivable - 56 - -


38 The Company has disclosed the turnover as net of total excise duty (excluding difference of excise duty onclosing stock and opening stock). The excise duty related to the difference between the closing stock andopening stock is recognised separately in Note 26 to the Statement of Profit and Loss.

39 The Company has adopted Accounting Standard 15 on ‘Employee Benefits’ with effect from 1 April 2007.Pursuant to the adoption, the company has classified various benefits provided to employees as under:-

I. Defined contribution plans

The company makes contribution, determined as a specified percentage of employee’s salaries, in respectof qualifying employees towards Provident fund, Labour Welfare fund and Employee’s Pension Scheme1995. The company has no obligation other than to make a specified contribution. The contributions arecharged to the Statement of Profit and Loss as they accrue. During the year, the Company has recognisedthe following amounts in the profit and loss account:

52




31 March 2013 31 March 2012

- Employer’s contribution to provident fund * 8,599,499 7,848,257[Includes EDLI charges and employer’s contributionto employee’s pension scheme 1995]

- Employer’s contribution to labour welfare fund* 52,938 55,632

* Included in contribution to provident and other funds (refer Note 23)

II. Defined benefit plan

The company operates two post - employment defined benefit plans that provide gratuity and Compen-sated absences. The gratuity plan entitles an employee, who has rendered atleast five years of continuousservice, to receive one-half month’s salary for each year of completed service at the time of retirement/exit.Compensated absences entitle an employee, who has a leave balance at the time of retirement/exit, toreceive proportionate gross salary per day for the leave balance.

A. Gratuity

In accordance with Accounting Standard15, actuarial valuation was done in respect of the afore-said defined benefit plan of gratuity based on the following assumptions:-

(i) Actuarial Assumptions for the year

Assumptions 31 March 2013 31 March 2012

Discount rate (per annum) 8.00% 8.50%

Rate of increase in compensation levels 7.50% 7.50%

Rate of return on plan assets 8.70% 8.60%

(ii) Changes in the Present Value of Obligation

Particulars 31 March 2013 31 March 2012

Present value of obligation as at 1 April 2012 29,497,862 22,744,060

Interest cost 2,507,318 1,876,385

Current service cost 2,735,178 1,768,613

Benefits paid (1,172,424) (800,423)

Actuarial (gain)/ loss (a) 4,061,539 3,909,227

Present value of obligation as at 31 March 2013 37,629,473 29,497,862

(iii) Fair value of plan assets


Fair value of plan assets as at 1 April 2012 27,727,868 25,379,288

Expected return on plan assets 2,384,597 2,030,343

Contributions 621,552 4,027

Benefits paid - -

Actuarial gain/ (loss) on plan assets (b) 176,673 314,210

Fair value of plan assets as at 31 March 2013 30,910,689 27,727,868

Net actuarial gain/(loss) to be recognised onobligation and plan assets (a+b) (3,884,866) (3,595,017)

53



(iv) Actual return of plan assets


Expected return on plan assets 2,384,597 2,030,343

Actuarial gain/ (loss) on plan assets (b) 176,673 314,210

Actual return on plan assets 2,561,270 2,344,553

(v) Amount recognized in the Balance Sheet


Present value of obligation as at 31 March 2013 37,629,473 29,497,862

Fair value of plan assets as at 31 March 2013 30,910,689 27,727,868

Net liability/(asset) recognized as at 31 March 2013 6,718,784 1,769,994

(vi) Expenses recognized in the Profit and Loss Account


Current service cost 2,735,178 1,768,613

Interest cost 2,507,318 1,876,385

Expected return on plan assets (2,384,597) (2,030,343)

Net actuarial (gain)/ loss to be recognized 3,884,866 3,595,017

Total (income)/ expense recognised in 6,742,765 5,209,672the profit and loss account **

** Included in employee costs “Contribution to provident fund and other funds”(refer Note 23)

(vii) Balance sheet reconciliation


Net liability/ (assets) as at 1 April 2012 1,769,994 (2,635,228)

(Income)/Expenses as above 6,742,765 5,209,672

Employers contribution (621,552) (4,027)

Benefits directly paid by Company (1,172,424) (800,423)

Net (asset)/liability recognized 6,718,784 1,769,994as at 31 March 2013

(viii) Experience Adjustment

Particulars 2013 2012 2011 2010

Experience adjustment on 2,490,738 4,676,208 (1,425,264) 2,730,125liabilities (gain)/loss

Experience adjustment on 176,673 314,210 848,832 Nilplan assets gain / (loss)

54




(ix) Broad category of plan assets relating to Gratuity as a percentage of total planassets

The Company's gratuity fund is managed by its insurer, Life Insurance Corporation of India(LIC). The plan assets under the fund are deposited under approved securities.

(x) Compensated absenses

The liability for leave encashment and compensated absences as at year end is Rs 12,259,291(Previous year Rs. 10,924,043).

(xi) As at 31 March 2013, the plan assets have primarily been invested in government securities.The estimates of future salary increases, considered in actuarial valuation, take in to accountinflation, seniority, promotion and other relevant factors, such as supply and demand in theemployment market. The Company expects to contribute approximately Rs. 5,232,046 to thegratuity trust during fiscal 2013-14.

(xii) The discount rate is based on prevailing market yields of Indian Government Securities as atthe Balance Sheet date from the estimated term of obligation.

40 Delisting of equity

During the year, the Company received an intimation from TH Licensing Inc., the Promoter and HoldingCo., for delisting of the Company’s equity shares from the Bombay Stock Exchange. Accordingly theBoard of Directors at its meeting held on 26 February 2013 approved the delisting of the equity shares ofthe Company. The Company dispatched to all the shareholders postal ballot forms along with the Notice,dated 11 March 2013, for the Special Resolution seeking their vote to the delisting proposal. The explanatorystatement annexed to the aforesaid Notice, the Company stated a floor price of Rs.135.82 per sharedetermined as per SEBI Delisting regulations 2009. As per the Scrutinizers report dated 16 April 2013, theCompany received the consent of majority of the shareholders to the delisting proposal. The Companyhas now filed with the Bombay Stock Exchange, its application dated 17 April 2013 for in-principle approvalto the delisting of its equity shares and will proceed with the other steps in the delisting process on receiptof such approval.





As per our report of even date attached

55


FAIRFIELD ATLAS LIMITEDRegd. Office : Survey No. 157, Devarwadi Village, Post Shinoli, Chandgad Taluka, Dist. Kolhapur, Maharashtra – 416 507.

ATTENDANCE SLIP

Registered Folio / Client ID ........................................

Name of the Member / Proxy / Representative ........................................................................................................................

...........................................................................................................................................................................................

I hereby record my presence at the 23RD ANNUAL GENERAL MEETING of the Company held on Saturday 27th July, 2013,

at 4.00 p.m. at Survey No. 157, Devarwadi Village, Post Shinoli, Chandgad Taluka, Dist. Kolhapur, Maharashtra

_____________________________________________________________

Signature of Attending Member / Proxy / Representative

NOTE : A Shareholder / Proxy Holder / Representative desiring to attend the meeting must complete the Attendance Slip and hand

it over at the entrance of the meeting hall.

........................................ CUT HERE AND BRING THIS ATTENDANCE SLIP AT THE MEETING .......................................

I / We ..............................................................................................................................................................

of .............................................................................................................................. being a member / members of the

above named company hereby, appoint ....................................................................................................................... of

...................................................................................or failing him .................................................................................

....................................................................................... of ..........................................................................................

............................................................as my / our proxy to vote for me /us on my / our behalf at the 23RD ANNUAL GENERAL

MEETING of the Company to be held on Saturday 27th July, 2013, and at any adjournment thereof.

Signed this ......................................... day of ............................................2013

Reference Folio / Client ID No.

No. of Shares

Signature

NOTE : This Proxy form must be returned so as to reach the Registered Office of the Company, Fairfield Atlas Limited,

Survey No. 157, Devarwadi Village, Post Shinoli, Chandgad Taluka, Dist. Kolhapur, Maharashtra not less

than FORTY EIGHT HOURS before the time for holding the aforesaid meeting

FAIRFIELD ATLAS LIMITEDRegd. Office : Survey No. 157, Devarwadi Village, Post Shinoli, Chandgad Taluka, Dist. Kolhapur, Maharashtra – 416 507.

PROXY FORM

Re. 1

Revenue

Stamp

!!

FAIRFIELD ATLAS LIMITED - Live BSE/NSE, India …Sehgal is presently working as a Director- HR and...

Documents

Transcript of FAIRFIELD ATLAS LIMITED - Live BSE/NSE, India …Sehgal is presently working as a Director- HR and...