fairfield atlas limited - Bombay Stock Exchange

FAIRFIELD ATLAS LIMITED 

BOARD OF DIRECTORS : Clement L. Strimel Jr. 

Chairman 

D. E. Jacob 

Managing Director 

Gary J. Lehman 

Riad Fyzee 

J. M. Mapgaonkar 

Avinash P. Gandhi 

Ravi Kathpalia 

Rakesh Chopra 

COMPANY SECRETARY : Marcel Rebello 

BANKERS : AXIS Bank Ltd. 

HDFC Bank Ltd. 

AUDITORS : B S R and Co. 

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 

EXPORT ORIENTED UNIT : Survey No. 116 and 119, 

Shinoli (Budruk) 

Chandgad Taluka, 


Tel.: (02320) 236605/6 

CORPORATE OFFICE : 202/3 Maruti Mansion 

17, R. Dadaji Street, 

Fort, Mumbai – 400 001. 

Tel.: 2266 6003, 2270 9025 

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

SHARE TRANSFER AGENTS 17–B, Dena Bank Building, 2nd Floor, 

Horniman Circle, Fort, 

Mumbai – 400 001. 

Tel. : 2264 1376, 2270 2485 

Fax : 2264 1349 

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NOTICE 

20th Annual Report 2009–2010 

NOTICE is hereby given that the Twentieth Annual General Meeting of shareholders of Fairfield Atlas Limited (the 

“Company”) will be held on Thursday 23rd September, 2010 at 3 P.M. at the Registered Office of the Company at Survey 

No 157, Devarwadi, Chandgad Taluka, Dist Kolhapur, Maharashtra 416507 to transact the following business : 

1. To receive, consider and adopt the Profit and Loss Account for the year ended 31st March, 2010, the Balance Sheet 

as at that date and the Reports of the Directors and the Auditors thereon. 

2. To appoint a Director in place of Mr. Riad Fyzee who retires by rotation and, being eligible, offers himself for re- 

election. 

3. To appoint a Director in place of Mr. J.M. Mapgaonkar who retires by rotation and being eligible, offers himself 

for re-election. 

4. To appoint B S R and Co., Chartered Accountants as Statutory Auditors of the Company to hold office from the 

NO NOTES NO TES TES: TES 

conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and to fix their 

remuneration. 

a) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND 

AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. PROXY FORMS MUST REACH THE 

COMPANY’S REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE MEETING. 

b) The Register of Members and Share Transfer Books of the Company will be closed from Thursday 16th September, 

2010 to Thursday 23rd September, 2010 (both days inclusive). 

c) Members are requested to: 

i. Intimate to the Company’s Registrars and Share Transfer Agents change if any, in their registered address at an 

early date; 

ii. Quote Folio Numbers in all their correspondence. 

d) Members who hold shares in dematerialised form are requested to bring their Client ID and DP ID numbers for easy 

identification of attendance at the meeting. 

Place : Goa 

Dated : 11th May, 2010 

Registered office : 

Survey No. 157, Devarwadi Village, 

Post Shinoli, Chandgad Taluka, 

Dist. Kolhapur, Maharashtra – 416 507 

By Order of the Board of Directors 

Marcel Rebello 

Company Secretary 

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DIRECTORS’ REPORT 

The Directors are pleased to present their 20th Annual Report together with the audited accounts of Fairfield Atlas Limited 

(the “Company”) for the year ended 31st March, 2010. 

i. i. Financial inancial Results Results 

Rs. in lakhs 

2009–2010 2008–2009 

Gross Income 9818.89 9818.89 

11624.45 

Profit before depreciation, Interest and tax 2003.19 2003.19 

987.58 

Interest and other finance charges 71.32 71.32 

134.50 

Depreciation and Amortisation 637.19 637.19 

721.89 

Prior Period Income - 28.57 

Exceptional item 341.95 341.95 

- 

Profit before Tax 

Provision for tax : 

1294.68 1294.68 

159.76 

Current tax 232.78 232.78 

28.96 

MAT Credit entitlement (447.03) (447.03) 

- 

Deferred Tax (credit) - (88.45) 

Profit after tax 1508.93 1508.93 

219.25 

Debit Balance in Profit & Loss Account 

Balance in Profit & Loss 

(533.76) (533.76) 

(753.00) 

Account Carried forward to Balance Sheet 975.17 975.17 

(533.76) 

ii. ii. ii. Dividend Dividend 

Dividend 

The Directors did not recommend dividend for the year ended 31st March, 2010. 

iii. iii. Performance 

erformance 

The global economic slowdown has impacted the revenues of the company particularly from its export business. 

However, various initiatives were undertaken by the company in its domestic business to mitigate the effects due to 

economic slowdown. The initiatives include extending its footprint to new customers particularly in the construction 

industry which present exciting opportunities for growth. The company has identified the opportunities for serving 

various markets through its diversified range of products. Sales turnover and other income decreased to Rs. 9818.69 

lakhs as compared to Rs.11624.45 lakhs for the previous financial year registering a marginal decrease of 15.53%. 

The company was entitled to a deferred sales tax benefit under the package scheme of incentives 1993 of the 

Government of Maharashtra. During the year the company has settled the entire liability at lower amount in 

pursuance of the option granted to it by the Sales Tax Act 1959. Apart from the above the company developed certain 

components for the parent company thereby earning development costs from these activities. All these factors 

contributed in maintaining the profitability trend of the company enabling it to wipe out its accumulated carried 

forward losses. 

iv iv. iv Directors Directors Responsibility Responsibility Statement Statement 

Statement 

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

confirm: 

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(i) that in the preparation of the Annual Accounts, the applicable accounting standards had been followed alongwith 

proper explanation relating to material departures; 

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and 

estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company 

at the end of the financial year as on 31st March, 2010 and of the profit of the Company for that period;


(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in 

accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of 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. 

v. Corporate Corporate Governance 

Governance 

Governance 

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange a section titled “Corporate Governance” has 

been included in this Annual Report along with Management Discussion and Analysis report and Shareholder 

Information report. Certificate from a Practising Company Secretary regarding compliance of conditions of Corporate 

Governance is annexed to the report. 

vi. vi. Wage age Agreement 

Agreement 

The company has successfully concluded a wage agreement with the recognized Labour Union for a period of four 

years commencing from 1st July, 2009. 

vii. vii. Particulars articulars of of Employees 

Employees 

The Company does not have any employee of the category specified in Section 217 (2A) of the Companies Act, 1956, 

read with the Companies (Particulars of Employees) Rules, 1975. 

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

outgo 

The information required in terms of 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, is given in the annexure forming part 

of this Report. 

ix. ix. Directors 

Directors 

It has been decided by Mr. Riad Fyzee, Mr. J.M. Mapgaonkar and Mr. Rakesh Chopra who were appointed Directors 

on the same day that is 25th September, 2007, that Mr. Riad Fyzee and Mr. J.M. Mapgaonkar will retire at this Annual 

General Meeting. Mr. Riad Fyzee and Mr. J.M. Mapgaonkar being eligible offer themselves for reappointment as 

Directors. 

None of the Directors of the Company is disqualified as on 31st March, 2010 for being appointed as Director as 

specified in Section 274(1)(g) of the Companies Act, 1956. 

x. x. x. CEO CEO and and CFO CFO Certification 

Certification 

The CEO and CFO have certified to the Board of Directors in respect of review of the financial statement and cash 

flow statement for the year in terms of the requirement of Clause 49(V) of the Listing Agreement. 

xi. xi. Auditors 

Auditors 

B S R and Co Chartered Accountants (KPMG), retire as Auditors at this Annual General Meeting and being eligible 

offer themselves for reappointment. 

xii xii Cost Cost Audit 

Audit 

Pursuant to the directions from the Department of Company Affairs for appointment of Cost Auditors, the Company 

has appointed M/s. M.P. Turakhia & Associates, Cost Accountants as the Cost Auditor for the financial year 2010- 

2011 subject to the approval of the Central Government. 

xiii. xiii. Auditors’ Auditors’ Auditors’ Report Report 

Report 

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

xiv xiv. xiv Acknowledgement 

Acknowledgement 

The Directors express their sincere thanks for the continued support and co-operation given by the Holding Company 

and Employees of the Company. 

Place : Goa 

Date : 11th May, 2010 

For and on behalf of the Board of Directors 

AVINASH VINASH P PP. 

P . GANDHI GANDHI 

D.E .E .E. .E . JA JA JACOB JA JA COB 

Director Managing Director 

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ANNEXURE 

ANNEXURE 

ANNEXURE 

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 2010. 

A. CONSERV CONSERVATION CONSERV TION OF OF ENERG ENERGY ENERG 

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No measures for conservation of energy were taken during this financial year. However the company is making efforts 

on an ongoing basis to find measures for energy conservation in various areas and will implement the same if 

feasible. 

B. TECHNOL TECHNOLOG 

TECHNOL OG OGY OG Y ABSORPTION 

ABSORPTION 

ABSORPTION 

The company uses indigenous technology in the manufacture of gears for its domestic customers. Technical know how 

received from parent company has enabled improvement in export revenues of the Company 

C. C. FOREIGN FOREIGN EX EXCHANGE EX CHANGE EARNINGS EARNINGS AND AND AND OUTGO 

OUTGO 

The information on foreign exchange earnings and outgo is furnished in the Notes to the Accounts at Item No. 20.11. 

Place : Goa 



AVINASH VINASH P PP. 

P . GANDHI GANDHI GANDHI 

D.E .E .E. .E . JA JACOB JA COB 

Director Managing Director

Management Discussion and Analysis 

(a) Industry Structure and Developments 


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. Indian Manufacturers of 

gears for these markets/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 product is a derived demand and hence is dependent upon the growth 

rate of its OEM customers. The fiscal stimuli of the government and the budget proposals have lifted customer 

confidence and the domestic economy looks set to charter a fresh growth trajectory which augurs well for the 

company. Domestic sales in the past few months reflect the growing confidence of the customers. On the export 

front, the economies of the countries where the company products are supplied seem to manifest modest signs 

of recovery though not a sustained up-turn as yet. 

(b) Opportunities and Threats 

The domestic demand for the company’s products being an ancillary demand, the future of the company’s 

domestic business depends significantly on the growth of the infrastructure segment, as well as the agriculture 

market. Fiscal stimuli introduced by the Government has lifted customer confidence and the positive signs from 

the industry are encouraging. The company has seized this opportunity and responded through selective and 

strategic capacity and capability improvements and increases. With the construction industry in India seemingly 

on a long-term growth trajectory, the company has identified the opportunities for serving various markets 

through its diversified range of products. At present the company supplies to several of the major Indian and 

global OEM’s that participate in the manufacture of excavators, compactors, dumpers, tippers, etc…and 

envision to continue diversifying its customer-base and product offering in the coming years. The manufacturing 

capabilities in India, coupled with the additional offerings and engineering capabilities from the U.S. parent 

company position us well for the envisioned growth. 

(c) Segment-Wise Performance 

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

energy and construction related transmission gears. There are no other primary reportable segments since 

100% of the company’s business is from transmission-type gears. As indicated above, the company will 

evaluate and establish strategic investment and growth to appropriate segments that will yield appropriate 

returns on investment. 

(d) Outlook 

The Indian economy appears to have shaken off the gloom and looks set to charter a fresh growth strategy 

as can be evidenced from the upward trend and stabilization in the domestic business of the company for the 

second half of the year under review. These signs give a positive outlook for the company’s domestic business. 

On the export front there are slight signs of revival though not yet a sustained upturn. To face the new scenario 

and defend its profitability the company has continued on the path towards lean manufacturing through active 

participation and leadership via the ACMA Cluster project. Building long term and deep relationships with our 

customers remains an ongoing focus to meet the challenges of a changing economy. 

(e) Internal Control System 

The company conducts its business based on ethical practices and in conformity with the laws and regulations 

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that govern its business. It has a well established frame work of internal control in operation with suitable 

monitoring procedures of various parameters supported by the ERP system mechanism. The Statutory Audit is 

supplemented by review of the financial and operating controls by the Internal Audit conducted by a reputed 

firm of Chartered Accountants. The Audit Committee of the Board of Directors actively reviews the adequacy 

and effectiveness of the internal control systems and suggests improvements. 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 at the Plant continue to be cordial. The company is striving to cultivate an organizational 

culture that is conducive to the welfare and safety of its employees. The company has recently concluded a 

four year wage settlement effective 1st July 2009 with the workers union. As a sequel salary structure of the 

non-bargainable staff has also been revised. The employees have played a key role in contributing to the 

growth and reputation of the company. 

The company has a strength of 479 permanent employees as on 31st March, 2010. 

(g) Risks and Concerns 

Since export revenues continue to be a significant contributor to the Company’s turnover a slackening of the 

export markets can have an impact on the overall profitability. Another matter of concern is the fluctuating rate 

of the dollar which can sometimes have a negative effect on the company’s export competitiveness, import bill 

and loan repayment commitments. The Company’s domestic business being tied to the automobiles and 

tractor business any slow down there due to low demand or vagaries of the monsoon could percolate and 

affect the company’s business. Rising of input costs could impair profitability of the company’s business 

whereas concerns of escalation in oil prices could crimp recovery of the economy as a whole. 

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE 

FINANCIAL INFORMATION 

FIXED ASSETS 

The company’s fixed asset gross block remained more or less at the same level as the previous year. 

INVENTORIES 

Inspite of the slow down in the export business, the company was able to maintain its inventory at more or less 

the same level as the previous year. 

SUNDRY DEBTORS 

Sundry debtors for the year ended 31st March, 2010 amounted to Rs.2716.03 lakhs being an increase of 63% 

over the previous year’s sundry debtors which amounted to Rs.1662.07 lakhs. The increase in debtors is due to 

granting of extended period of credit to overseas buyers as compared to previous year. 

RESULTS OF OPERATIONS 

Expenditure FY FY-2010 FY -2010 Rs. in lakhs 

FY-2009 

Cost of Goods Sold (COGS) 4580.04 4580.04 

6044.78 

Employee costs 1197.96 1197.96 

1061.84 

Manufacturing and other Expenses 2379.65 2379.65 

3575.79 

Finance Cost 71.32 71.32 71.32 

134.50 

Depreciation 637.19 637.19 

721.89


Cost of Goods Sold: The company has reduced its COGS as compared to previous financial year due to change 

in product mix and additions of new products for existing and new customers. 

Employee Costs: The increase in employee costs is due to increased wages and salaries paid to the workmen and 

other employees consequent upon signing up of new wage agreement effective from 1st July, 2009. 

Manufacturing Costs: Manufacturing Costs and other expenses for the financial year has been reduced since the 

company had a foreign exchange gain during the financial year as compared to a foreign exchange loss of 

approximately Rupees 10 crores for the previous financial year. Additionally the company has also reduced all 

other expenses in line with its quantum of sales. 

Finance Cost: Interest cost has been reduced due to lowering of LIBOR rate applicable to the term loans and 

appreciation in the value of rupee vis-a-vis the US Dollar. 

Depreciation: Depreciation has reduced due to working of factory on two-shift basis for part of the financial year. 

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. 

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Corporate Governance: 

1. Company’s philosophy on Corporate Governance: 

Name Category Attendance Particulars No. of No. of No. of 

Board Last AGM 

other 

Directorships 

Committee # 

Membership 

Chairmanship 

of Committee # 

Meeting held held 

Clement L. Strimel + Chairman 2 Yes - - - 

Non Executive Director 

Gary J. Lehman + Non Executive Director - Yes - - - 

Riad Fyzee Independent Director 3 Yes - 1 1 

Devanand E. Jacob Managing Director 4 Yes - 1 - 

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

Avinash P. Gandhi Independent Director 4 Yes 11 4 2 

Ravi Kathpalia Independent Director 4 Yes 6 4 2 

Rakesh Chopra Independent Director 4 No 1 4 - 

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Fairfield Atlas Limited (“the Company”) is committed to adhere to the corporate governance code as prescribed by 

the Stock Exchange and has accordingly implemented various aspects of the code for the year ended 31st March, 

2010. 

2. Board of Directors : 

The names and categories of Directors are given below. The Chairman being non-executive and “related” to the 

promoters vide Amendment/Explanation dated 11th November, 2008 to the Listing Agreement the number of 

Independent Directors should be one half of the total strength. The Company complies with the same and at present 

all the Independent Directors are non-executive Directors. No Director of the Company is related to each other. 

3. Board Procedure : 

A detailed Agenda and papers for consideration at the Board/Committee Meetings are circulated to each Director 

in advance of Board and Committee Meetings. The Managing Director briefs the Board on the overall performance 

of the Company and clarifies queries raised by the Board Members on any item 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 4 times on 12th June, 2009, 29th July, 2009, 29th October, 2009, and 25th January, 

2010. The maximum time gap between any 2 meetings was not more than 4 calendar months. 

The following table gives details of Directors, attendance of Directors at the Board meetings and at the last Annual 

General Meeting, held on September 17, 2009, number of memberships held by Directors in the Board/Committee 

of various public companies. None of the Directors on the Board was a member of more than 10 Committees and 

Chairman of more than 5 Committees (as specified in Clause 49 of the Listing Agreement) across all the companies 

in which he is a Director: 

+ Nominee Director – Fairfield Manufacturing Co., Inc, U.S.A. 

# Committees considered are Audit Committee and Shareholders/Investors Grievance

5. Directors seeking reappointment: 


At the ensuing Annual General Meeting Mr. Riad Fyzee, and Mr. J.M. Mapgaonkar retire by rotation and being eligible 

offer themselves for reappointment. 

Mr. Riad Fyzee 55, was the founder and Chief Promoter of the Company. He was the former Managing Director of 

the Company and has in-depth knowledge of the working of the Company. In view of his experience and association 

with the Company since inception, Mr. Fyzee continues on the Board of Directors in a Non-Executive Independent 

Director capacity. Mr. Fyzee is the Chairman of the Shareholders Grievance Committee. Mr. Fyzee presently holds 

about 0.16% of subscribed share capital of the company as on 31st March, 2010 and he is not related to any director 

of the company. 

Mr. J. M. Mapgaonkar 61, was formerly a Director nominated by Mahindra & Mahindra Ltd. Mr. Mapgaonkar liaises 

with the company in respect of the supplies to be made to Mahindra & Mahindra Ltd., and has contributed to the 

company’s sales efforts. Mr. Mapgaonkar has been the Director of the company since 1995. Mr. Mapgaonkar is a 

member of the Shareholders Grievance Committee of the Board. Mr. Mapgaonkar 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 Members 

and Senior Management Personnel have affirmed compliance with the Code of Conduct. A declaration signed by Mr. 

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. 

Mr. Avinash P. Gandhi is the Chairman of the Committee. The Company Secretary acts as Secretary to the 

Committee. The terms of reference of the Audit Committee covers the matters enumerated in Clause 49 of the 

Listing Agreement. 

The Audit Committee held 4 meetings during the year on 12th June, 2009, 29th July, 2009, 29th October, 2009 

and 25th January, 2010 and reviewed with the Statutory Auditors the financial statement for the year ended 31st 

March 2009 and Unaudited Financial statements for the quarters ended 30th June, 2009, 30th September, 2009 

and 31st December, 2009. 

The attendance at the meetings was as under: 

Committee Members Meetings Attended 

Mr. Avinash P. Gandhi, Chairman 4 

Mr. Ravi Kathpalia, Member 4 

Mr. Rakesh Chopra, Member 4 

ii. Shareholders/Investors Grievance Committee: 

The present Committee consists of Mr. D. E. Jacob, Mr. Riad Fyzee and Mr. J. M. Mapgaonkar. Mr. Riad Fyzee 

is the Chairman of the Committee. The Committee looks into redressing of shareholders complaints like transfer 

of shares, non-receipt of Balance Sheet, dividend etc. The work of the Registrar and Transfer Agent is overseen 

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by the Committee. Mr. Marcel Rebello, Company Secretary is the Compliance Officer. No complaints were 

received from the shareholders during the year. The Committee had 4 meetings till date. 

The attendance at these meetings was as under: 

Names and 

Designation 

Committee Members Meetings Attended 

Mr. Riad Fyzee, Chairman 3 

Mr. J. M. Mapgaonkar, Member 3 

Mr. D. E. Jacob, Member 4 

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 remuneration 

package 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. 

Salary House 

Rent Allowance 

Special 

Allowance 

(Rs.) 

Remuneration paid during 2009–2010 

Commission 

(Performance 

Linked) 

(Rs.) 

Company’s 

contribution to 

Provident and 

Pension Fund 

(Rs.) 

Perquisites 

Mr. D. E. Jacob 1,394,000/- - 115,200 - 1,509,200 


Mr. Riad Fyzee * - - - - 1,00,000 

Non-Executive/ 

Independent Director 

Rakesh Chopra - - - - 1,00,000 



Avinash Gandhi - - - - 1,00,000 



Ravi Kathpalia - - - - 1,00,000 



J. M.-Mapgaonkar - - - - 50,000 

Non Executive 

Director 

(Rs.) 

Total 

(Rs.) 

Service Contract, 

notice period, 

severance fees 

The appointment is for a period 

of 2 years with effect from 24th 

October, 2008 till 23rd October 

2010 subject to termination by 

three months notice in writing on 

either side or payment of 

remuneration for three months in 

lieu of notice. If Agreement 

terminated without cause 

company to pay compensation 

subject to provisions of section 

318 of the Companies Act 1956 

calculated in accordance with 

Section 318(4) of the Companies 

Act 1956. 

Sitting fees for attending Board 

and Committee Meetings 









* Mr. Riad Fyzee holds 45230 equity shares of Rs.10/- each and Mr. D. E. Jacob holds 2 equity shares of Rs.10/- each in 

the company. None of the other Directors holds any shares in the company. 

Above Non Executive Directors are only entitled to sitting fees of Rs.15,000/- per Board Meeting attended and 

Rs.10,000/- per Committee Meeting attended. 

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

GENERAL INFORMATION FOR SHAREHOLDERS : 

Annual General Meeting: 


The Twentieth Annual General Meeting of the Company will be held on Thursday 23rd September 2010, at 3 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, 2010 Mid August 2010 

Half Year ending September 30, 2010 Mid November 2010 

Quarter ending December 31, 2010 Mid February 2011 

Year ending March 31, 2011 End May 2011 

Note: The above dates are indicative. 

Dates of Book Closure: 

16th September, 2010 to 23rd September, 2010 (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 2010-2011 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. 

Shareholders complaints redressal email ID 

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

falredressalsmailbox@rediffmail.com for the purpose of attending to shareholders complaints. 

Registrar and Transfer Agents : 

Sharex Dynamic (India) Pvt. Ltd. 

a) 17-B, Dena Bank Bldg., Horniman Circle, Fort, Mumbai 400 001. Tel: 22702485, 22641376. Fax: 

22641349. 

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

28515606, 28515646 Fax: 28512885 

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Shareholding Pattern as on March 31, 2010: 

Foreign Promoters 22924796 83.91 

FI / Bank / FII / Mutual/ Venture Funds 2316668 8.48 

Bodies Corporate 233948 0.86 

NRI/OCBs Foreign Companies 20635 0.07 

Public 1824493 6.68 

Total Equity Capital 27320540 100.00 

Market Price Data: 

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

14 

Category 

Number of Equity shares 

of Rs.10/– each 

% to Subscribed 

Capital 

High Rs. Low Rs. 

April 2009 27.30 15.05 

May 2009 33.40 18.00 

June 2009 37.00 24.55 

July 2009 37.95 21.30 

August 2009 41.70 30.50 

September 2009 39.05 32.00 

October 2009 35.00 29.75 

November 2009 37.65 27.50 

December 2009 41.70 33.00 

January 2010 48.20 36.00 

February 2010 41.75 34.80 

March 2010 43.00 35.10

Distribution of shareholding as on March 31, 2010: 


Share of No. of % of No. of % of 

Nominal Value Rs. Holders Holders Shares Shareholding 

Upto 100 2917 60.19 260271 0.95 

101 to 200 602 12.42 114282 0.42 

201 to 500 740 15.27 286770 1.05 

501 to 1000 289 5.96 245831 0.90 

1001 to 5000 244 5.04 542113 1.98 

5001 to 10000 34 0.70 256525 0.94 

10001 to 100000 18 0.37 379584 1.39 

100001 to above 2 0.05 25235164 92.37 

Total 4846 100.00 27320540 100.00 

Dematerialization of shares and liquidity: 

98.74% of the total equity comprising 26977425 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, 2010. 

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, 


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 or the offices of share transfer agents 

for the attention of the Company Secretary. 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: 

Annual General Meetings held during last three years: 

Year Date Time 

2007 September 25, 2007 3 PM 

2008 September 10, 2008 3 PM 

2009 September 17, 2009 3 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. The Company will use postal ballots when required under the provisions of the Companies Act, 1956. 

15


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

16 

Special Resolutions passed 

1. Modification of the Employment Agreement dated 5th August, 2005 

entered into between the Company and Mr. A.K. Kaul, Whole Time 

Director upon terms and conditions set out in the Supplemental 

Agreement dated 24th January, 2008 entered into between the 

company and Mr. A.K. Kaul, Whole Time Director”. 

2. Appointment of Mr. Lalit K. Chaudhary as Managing Director and 

CEO for a period of 5 years commencing from 1st January, 2008 

upon terms and conditions set out in the Agreement dated 7th February, 

2008 entered into between Mr. Lalit K. Chaudhary and the Company. 

No Special Resolutions were passed at the Annual General Meeting held for the Financial Year 2006-2007. 

2. Related Party Transactions Disclosures: 

During the year under review, besides the transactions reported elsewhere in the Annual Report, there were no other 

related party transactions with the promoters, directors, management and subsidiaries or relatives etc. that had a 

potential conflict with the interest of the Company at large. 

Transactions with related parties are disclosed in Note No. 20.15 of Schedule 20 to the Accounts in the Annual Report. 

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 Free Press Journal, Mumbai and Navshakti (Marathi), 

Mumbai. These are not sent individually to shareholders. 

5. Management Discussion and Analysis 

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

Report. 

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

To, 

Financial Year Date of Meeting 

2007-2008 10.09.2008 

2008-2009 17.09.2009 

The Members of Fairfield Atlas Limited 

1. Appointment of Mr. D. E. Jacob as Managing Director of the Company 

for a period of 2 (two) years commencing from 24th October 2008 

and ending 23rd October, 2010 upon terms and conditions set out 

in the Agreement dated 5th December, 2008 entered into between 

Mr. D.E. Jacob and the Company. 

I, Mr. Devanand E. Jacob, Managing Director of Fairfield Atlas Limited declare that all the members of the Board 

of Directors and Senior Executives of the Company have affirmed compliance with the Code of Conduct for the financial 

year 2009-2010. 

Place : Goa 


D. E. JACOB 

Managing Director


Auditors’ Certificate regarding compliance with the conditions of Corporate Governance 

TO THE MEMBERS OF FAIRFIELD ATLAS LIMITED 

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

Limited, for the year ended on March 31, 2010, 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. My 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 my opinion and to the best of my information and according to the explanations given to me, and the representations 

made by the Directors and Management, I 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 I have to state that based 

on the report given by the Registrars of the Company to the Investors’ Grievance Committee, as on March 31, 2010 there 

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

I 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. 

Place : Mumbai 

Date : May 11, 2010 

CS MAHESH SONI 

Practising Company Secretary 

FCS : 3706 COP : 2324 

17


We have audited the attached balance sheet of Fairfield Atlas Limited (‘the Company’), as at 31 March 2010 and the 

related profit and loss account and the cash flow statement for the year ended on that date, annexed thereto. These 

financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion 

on these financial statements based on our audit. 

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that 

we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 

financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 

management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a 

reasonable basis for our opinion. 

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 Companies Act, 1956, (‘the Act’) we enclose in the Annexure 

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

2. Further to our comments in the Annexure referred to above, we report that: 

18 

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

necessary for the purposes of our audit; 

(ii) 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; 

(iii) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement 

with the books of account; 

(iv) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report 

comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act; 

(v) on the basis of written representations received from the directors as on 31 March 2010 and taken on record 

by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being 

appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and 

(vi) in our opinion, and to the best of our information and according to the explanations given to us, the said 

accounts 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 2010; 

b. in the case of the profit and loss account, 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 for the year ended on that date. 

For or or 


Firm’s Registration No.: 128510W 


Bhavesh Bhavesh Dhupelia 

Dhupelia 

Partner 

Date : 11th May, 2010 Membership No: 042070


With reference to the Annexure referred to in paragraph 1 of the Auditors’ Report to the members of Fairfield Atlas Limited 

(‘the Company’) on the financial statements for the year ended 31 March 2010, we report that: 

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation 

of fixed assets. 

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are 

verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification 

is reasonable having regard to the size of the Company and the nature of its assets. 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 going concern 

assumption. 

(ii) (a) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the 

management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying 

with third parties at the year-end, written confirmations have been obtained. 

(b) The procedures for the physical verification of inventories followed by the management are reasonable and 

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 updation of 

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 can not be ascertained. The discrepancies noticed on physical verification of 

inventory (except for work in progress) as compared to 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 Companies Act, 1956 (‘the Act’). 

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation 

that purchases of certain items of inventories and fixed assets are for the Company’s specialised requirements and 

similarly certain goods sold and services rendered are for the specialised requirements of the buyers and suitable 

alternative sources are not available to obtain comparable quotations, there is an adequate internal control system 

commensurate with the size of the Company and the nature of its business with regard to purchase of inventories 

and fixed assets and with regard to the sale of goods and services. In our opinion and according to the information 

and explanations given to us, except for pending updation of inventory records of work in progress, there is no 

continuing failure to correct major weaknesses in internal control system. 

(v) In our opinion, and according to the information and explanations given to us, there are no contracts and arrangements 

the particulars of which need to be entered into the register maintained under Section 301 of the Act. 

(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 its business. 

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by 

the Central Government for maintenance of cost records under section 209(1)(d) of the Act, in respect of products 

and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained 

19


20 

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 of the records 

of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues 

including Provident Fund, Professional tax, Income-tax, Wealth tax, Sales-tax, Service tax, Customs duty, Excise 

duty, Cess and other material statutory dues have been generally regularly deposited during the year by the 

Company with the appropriate authorities. As explained to us, the Company did not have any dues on account 

of Investor Education and Protection Fund and Employee’s State Insurance. 

There were no dues on account of cess under Section 441A of the Act, since the date from which the aforesaid 

section comes into force has not yet been notified by the Central Government. 

According to the information and explanations given to us, no undisputed amounts payable in respect of 

Provident Fund, Professional tax, Income tax, Sales tax, Service tax, Customs duty, Excise duty, Cess and other 

material statutory dues were in arrears as at 31 March 2010 for a period of 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, Wealth tax, 

Customs duty and Excise duty which have not been deposited with the appropriate authorities on account of 

any dispute. 

According to the information and explanations given to us, the following dues of Sales tax and Service tax have 

not been deposited by the Company on account of disputes: 

Central Excise Act, 1944 Service Tax 2,479,821 April 2003 to Custom, Excise and 

June 2005 Service Tax Appellate 

Tribunal 

Bombay Sales Tax Act, Outstanding 1,523,773 1998-1999 Appellate Tribunal 

1959 relevant forms Sales Tax 

Bombay Sales Tax Act, Outstanding 2,386,772 1999-2000 Appellate Tribunal 

1959 relevant forms Sales Tax 

(x) The Company did not have any accumulated losses at the end of the financial year, and has not incurred cash 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 not defaulted in 

repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institution and 

debenture holders during the year. 

(xii) The Company has not granted any loans and advances 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 a chit fund or 

a nidhi/ mutual benefit fund/ society. 

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, 

securities, debentures and other investments.


(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans 

taken by others from banks or financial institutions. 

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company 

have been applied for the purpose for which they were raised. 

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of 

the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term 

investment. 

(xviii)The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register 

maintained under Section 301 of the Act. 

(xix) The Company did not have any outstanding debentures during the year. 

(xx) The Company has not raised 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 been noticed or 

reported during the course of our audit. 

For or or 




Bhavesh Bhavesh Bhavesh Dhupelia 

Dhupelia 

Partner 

Date : 11th May, 2010 Membership No: 042070 

21


BALANCE SHEET AS AT MARCH 31, 2010 

(Currency : Indian Rupees) As at As at 

Schedules March 31 2010 March 31 2009 

22 

Rupees Rupees 

SOURCES OF FUNDS 

Shareholders’ funds: 

Share capital 3 273,205,400 273,205,400 

Reserves and surplus 4 103,017,588 5,500,000 

376,222,988 278,705,400 

Loan funds: 

Secured loans 5 503,473,586 526,674,342 

Unsecured loans 6 - 57,997,516 

TOTAL 879,696,574 863,377,258 

APPLICATION OF FUNDS 

Fixed assets : 

Gross block 7 1,222,050,857 1,218,576,822 

Less: Accumulated depreciation and amortisation 747,916,703 691,561,495 

Net block 474,134,154 527,015,327 

Add: Capital work-in-progress (including capital advances) 11,575,425 4,209,467 

485,709,579 531,224,794 

Current assets, loans and advances : 

Inventories 8 240,216,049 241,718,869 

Sundry debtors 9 271,602,589 166,206,708 

Cash and bank balances 10 73,005,907 113,499,269 

Other current assets 11 3,509,342 476,527 

Loans and advances 12 66,465,120 53,671,732 

654,799,007 575,573,105 

Less : Current liabilities and provisions: 13 

Current liabilities 236,013,825 272,128,271 

Provisions 24,798,187 24,668,151 

260,812,012 296,796,422 

Net current assets 393,986,995 278,776,683 

Profit and loss account - 53,375,781 

TOTAL 879,696,574 863,377,258 

Significant accounting policies 2 

Notes to the accounts 20 

The Schedules referred to above form an integral part of this balance sheet. 

As per our report attached 

For B S R and Co For and on behalf of the Board of Directors 



Bhavesh Dhupelia Avinash Gandhi D. E. Jacob 

Partner Director Managing Director 

Membership No.: 042070 

Vikram Nagar Marcel Rebello 

Chief Financial Officer Company Secretary 

Place : Mumbai Place : Goa 

Date : 11th May 2010 Date : 11th May 2010

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 


(Currency : Indian Rupees) Schedules 2009–2010 2008–2009 

INCOME 

Rupees Rupees 

Sales and related services 14 892,574,614 1,126,558,882 

Other income 15 89,314,771 35,886,474 

981,889,385 1,162,445,356 

EXPENDITURE 

Cost of goods sold 16 458,003,835 604,478,048 

Employee costs 17 119,796,251 106,184,106 

Manufacturing and other expenses 18 237,964,978 353,025,633 

Finance cost 19 7,131,827 13,449,631 

Depreciation and amortisation 7 63,719,497 72,188,750 

Significant accounting policies 2 

Notes to the accounts 20 

The Schedules referred to above form an integral part of this Profit and Loss Account. 


For B S R and Co For and on behalf of the Board of Directors 



Bhavesh Dhupelia Avinash Gandhi D. E. Jacob 

Partner Director Managing Director 





Date : 11th May 2010 Date : 11th May 2010 

886,616,388 1,149,326,168 

Profit before taxation, exceptional items and 

prior period items 95,272,997 13,119,188 

Prior period income, net 20.20 - 2,857,510 

Exceptional item 20.19 34,195,164 - 

Profit before taxation 129,468,161 15,976,698 

Provision for taxation 

- Current tax 23,277,792 2,000,000 

- MAT credit entitlement (44,703,000) - 

- Deferred tax (credit) - (8,845,178) 

Fringe benefits tax - 896,905 

Profit after taxation 150,893,369 21,924,971 

Debit balance in profit and loss account brought forward (53,375,781) (75,300,752) 

Balance in profit and loss account carried forward 97,517,588 (53,375,781) 

Earnings per equity share of Rs. 10 each 

Basic and diluted earnings per share 20.13 5.52 0.80 

23


Cash Flow Statement for the Year Ended March 31, 2010 

(Currency : Indian Rupees) 2009–2010 2008–2009 

Rupees Rupees 

24 

Profit before taxation 

Adjustments for: 

15,976,698 

Depreciation and amortisation 72,188,750 

Finance cost 13,449,631 

Interest on deposits (Gross) (2,076,870) 

Increase/ (decrease) in provision for gratuity 2,145,963 

Increase / (decrease )in provision for leave encashment (1,482,169) 

Unrealised foreign exchange (gain)/ loss 94,660,093 

Provision for doubtful advances/debts no longer required written-back (1,266,610) 

(Profit)/loss on sale of fixed assets (net) 1,442,835 

Liabilities/ provisions no longer required written - back (8,248,138) 

Gain on sales tax deferral loan repayment - 

Operating profit before working capital changes 186,790,183 

(Increase) / decrease in working capital 

Inventories (35,500,318) 

Trade and other receivables 87,018,008 

Trade payables (52,893,625) 

(1,375,935) 

CASH (USED IN) / GENERATED FROM OPERATIONS 185,414,248 

Direct taxes paid (10,455,025) 

174,959,223 

Purchase of fixed assets (104,339,243) 

Sale of fixed assets 1,156,424 

Interest received 3,322,936 

(99,859,883) 

Proceeds from borrowings - 

Repayment of borrowings (28,416) 

Interest expense (18,581,688) 

(18,610,104) 

Net (decrease) / increase in cash or cash equivalents (A+B+C) (40,493,362) 56,489,236

Cash Flow Statement for the Year Ended March 31, 2010 


(Currency : Indian Rupees) 2009–2010 2008–2009 

Rupees Rupees 

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

Accounting Standard - 3 on Cash Flow Statements. 

2. Previous year’s figures have been regrouped/ rearranged wherever necessary. 

The Schedules referred to above form an integral part of this Cash Flow Statement 


For B S R and Co 




Bhavesh Dhupelia 

Partner 


Avinash Gandhi 

Director 

D. E. Jacob 


Vikram Nagar 

Chief Financial Officer 

Marcel Rebello 

Company Secretary 


Date : 11th May 2010 Date : 11th May 2010 

57,010,033 

113,499,269 

56,489,236 

Cash on hand 

Balances with scheduled banks 

244,306 

- In current accounts 97,234,963 

- In fixed deposit accounts 16,020,000 

113,499,269 

25


SCHEDULES TO THE FINANCIAL STATEMENTS 

for the year ended 31st March 2010 (Currency : Indian Rupees) 

1 BACKGROUND 

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 A.G. Pfaffikon. The Company is 

primarily engaged in manufacturing and selling of automotive transmission gears and gear boxes. 

2 SIGNIFICANT ACCOUNTING POLICIES 

2.1 Basis of preparation of financial statements 

The financial statements are prepared under the historical cost convention, on the accrual basis of 

accounting in accordance with the accounting principles generally accepted in India (‘Indian GAAP’) 

and comply with the companies (accounting standards) rules, 2006 issued by the Central Government, 

in consultation with National Advisory Committee on accounting standards (‘NACAS’) and relevant 

provisions of Companies Act, 1956 (‘the Act’) to the extent applicable. 

2.2 Use of estimates 

The preparation of the financial statements in conformity with Indian GAAP requires management to 

make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure 

of contingent liabilities as of the date of financial statements. Actual results may differ from those 

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

2.3 Revenue recognition 

Revenue from sale of transmission gears and gear boxes is recognized 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 recognized using the time proportion method based at the underlying interest rates. 

2.4 Fixed assets and depreciation 

Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation, amortisation 

and impairment loss, if any. Cost includes inward freight, duties, taxes and incidental expenses relating 

to acquisition and installation of the asset. 

Depreciation on fixed assets has been provided using straight line value method in the manner and 

at the rates prescribed by Schedule XIV of the Companies Act, 1956, except for material handling 

equipments which have been depreciated on straight line method over a period of three years and 

technical know how fees is amortized over a period of eighteen months from the date of technology 

being put to use. 

Depreciation is charged on pro-rata basis for assets purchased / disposed off during the period. 

Individual assets costing less than Rs. 5,000 are depreciated fully in the year of purchase. 

Impairment of fixed assets 

The Company assesses at each balance sheet date whether there is any indication that an asset may 

be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. 

The recoverable amount is the greater of the net selling price and value in use. In assessing value in 

use, the estimated future cash flows are discounted to their present value based on an appropriate 

discount factor. 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 profit and 

loss account. If at the balance sheet date there is an indication that a previously assessed impairment 

loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable 

amount subject to a maximum of depreciated historical cost. 

26

SCHEDULES TO THE FINANCIAL STATEMENTS (Contd.) 



2.5 Borrowing costs 

Borrowing costs directly attributable to the acquisition/construction of a qualifying asset are apportioned 

to the cost of the fixed assets upto the date on which the asset is put to use/commissioned. 

2.6 Inventory 

Inventories are valued at the lower of cost and net realisable value. Cost includes raw material cost, 

conversion costs and all expenses incurred to bring the inventory to its present location and condition. 

Cost is determined on first in first out basis for raw materials, work-in-progress, finished goods and 

stores and spare parts. 

2.7 Taxation 

Income tax expense comprises current income tax, fringe benefit tax (i.e. amount of tax for the year 

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 year). The 

deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized 

using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred 

tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized 

in future. 

However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred 

tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax 

assets are reviewed 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 realized. 

Provision for Fringe Benefit Tax (FBT) is made on the basis of applicable FBT on the taxable value of 

specified expenses of the company as prescribed under the Income-tax Act, 1961. 

In accordance with the guidance note issued by the Institute of Chartered Accountants of India (‘ICAI’) 

on accounting for credit available in respect of Minimum Alternate Tax (MAT) under the Income-tax Act, 

1961, the Company recognises MAT credit as an asset only when and to the extent there is convincing 

evidence for reasonable certainity that the Company will be liable to pay normal income tax during 

the specified period. 

2.8 Leases 

Operating lease 

Lease rentals in respect of assets acquired under operating lease are charged off to the profit and loss 

account on straight line basis over the period of lease. 

Finance lease 

Assets acquired under finance leases are recognized at the lower of the fair value of the leased assets 

at inception and the sum of the present value of minimum lease payments. 

2.9 Foreign currency transactions 

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the 

transaction. Foreign currencies denominated monetary assets and liabilities at the balance sheet date 

are translated at the exchange rate prevailing on the date of the balance sheet. Exchange rate 

differences resulting from foreign exchange transactions settled during the period, including period-end 

translation of assets and liabilities are recognised in the profit and loss account 

In respect of transactions covered by forward exchange contracts, discounts/premiums on forward 

exchange contracts are amortised over the period of the contract. Exchange differences arising due to 

change in exchange rates on forward exchange contracts are recognized in the profit and loss account. 

2.10 Employee benefits 

(a) Short term employment benefits 

All employee benefits payable wholly within twelve months of rendering the service are classified 

27




as short-term employee benefits. Benefits such as salaries, wages, and short term compensated 

absences, etc. and the expected cost of ex-gratia are recognized in the period in which the 

employee renders the related service. 

(b) Post employment benefits 

Defined contribution plan: 

The Company contributes to the statutory provident fund, administered by the government, at the 

prescribed rates and has no further obligation beyond making its contribution. Provident fund 

dues are recognized when the liability to contribute to the provident fund arises under the 

Employees’ Provident Fund Act, 1952 and charged to revenue. 

Defined benefit plan: 

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

Corporation of India (‘LIC’) defined benefit plan (unfunded upto previous year ). The Company’s 

obligation in respect of the gratuity benefit scheme is determined by an independent actuary by 

estimating the 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. 

The present value of the obligation under such defined benefit plan is determined based on 

actuarial valuation using the projected unit credit method, which recognizes each period of 

service as giving rise to additional unit of employee benefit entitlement and measures each unit 

separately to build up the final obligation. 

The obligation is measured at the present value of the estimated future cash flows. The discount 

rates used for determining the present value of the obligation under defined benefit plan, are 

based on the relevant market yields on Government securities as at the balance sheet date. 

(c) Long term employment benefits : 

The Company’s net obligation in respect of long-term employment benefits, other than gratuity, 

is the amount of future benefit that employees have earned in return for their service in the 

current and prior periods. The obligation is based on actuarial valuation using the projected unit 

credit method and is discounted to its present value. The discount rates used for determining the 

present value of the obligation under defined benefit plan, are based on the relevant market 

yields on Government securities as at the balance sheet date. 

Actuarial gains and losses are recognized immediately in the profit and loss account. 

2.11 Earnings per share 

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders 

for the period by the weighted average number of equity shares outstanding during the reporting 

period. The Company does not have any dilutive potential equity shares during the reporting period. 

2.12 Provisions and contingencies 

The Company creates a provision where there is present obligation as a result of a past event that 

probably requires an outflow of resources and a reliable estimate can be made of the amount of the 

obligation. A disclosure for a contingent liability is made when there is a possible or a present 

obligation that may, but probably will not require an outflow of resources. When there is a possible 

obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure 

is made. Loss contingencies arising from claims, assessment, fines, penalties etc are recorded when it 

is probable that a liability has been incurred and the amount can be reasonably estimated. 

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. 

If it is no longer probable that an outflow of resources would be required to settle the obligation, the 

provision is reversed. 

28


as at 31st March 2010 (Currency : Indian Rupees) 


As at As at 

March 31, 2010 March 31, 2009 

Rupees Rupees 

SCHEDULE 3 : SHARE CAPITAL 

Authorised: 

28,000,000 (previous year Rs. 28,000,000) 

equity shares of Rs. 10 each. 280,000,000 280,000,000 

–––––––––––––– –––––––––––––– 

280,000,000 280,000,000 

–––––––––––––– –––––––––––––– 

Issued, Subscribed and Paid-up: 

27,320,540 (previous year Rs. 27,320,540) 

equity shares of Rs. 10 each, fully paid-up. 273,205,400 273,205,400 

–––––––––––––– –––––––––––––– 

273,205,400 273,205,400 

–––––––––––––– –––––––––––––– 

Note: 

1) Of the above, 22,924,796 (previous year 22,924,796) equity shares 

of Rs. 10 each, fully paid-up, are held by TH Licensing Inc., 

U. S. A., a wholly owned subsidiary of Fairfield Manufacturing Company 

Inc., U. S. A. (FMC) The ultimate holding company is 

OC Oerlikon Corporation A. G. Pfaffikon 

SCHEDULE 4 : RESERVES AND SURPLUS 

Capital Reserve 

Special Capital Incentive (refer note below) 5,500,000 5,500,000 

Profit and Loss Account 97,517,588 - 

–––––––––––––– –––––––––––––– 

103,017,588 5,500,000 

–––––––––––––– –––––––––––––– 

Note: 

The Company had received cash subsidy from State Industrial and Investment Corporation of Maharashtra 

Limited ('SICOM') under the 1988 package scheme of incentives in the nature of promoters' contribution. 

SCHEDULE 5 : SECURED LOANS 

Other Loans 

From T- H Licensing Inc., U. S. A., the holding company 

[Refer Note (a) below] 

[Includes interest accrued and due Rs Nil (previous year: Rs 746,320)] 

226,200,000 256,696,320 

From Fairfield Manufacturing Company Inc., U. S. A. 248,820,001 269,978,022 

[Refer Note 18 of schedule 20] 

From bank 

Demand Loan from Axis Bank Limited 

[Refer Note (b) below] 

28,453,585 - 

[Includes interest accrued and due Rs 53,585] –––––––––––––– –––––––––––––– 

503,473,586 526,674,342 

–––––––––––––– –––––––––––––– 

Notes: 

a) External commercial borrowing of USD 5,000,000 (previous year: USD 5,000,000) from T-H Licensing 

Inc., U. S. A. is secured by creation of hypothecation charge on all the fixed and current assets, 

excluding land and building. The entire Term Loan is repayable on 28 February 2011. 

b) During the year, the Company availed short term loan of Rs. 28,400,000 against Fixed Deposit of 

Rs. 32,000,000. 

29




30 

As at As at 

March 31, 2010 March 31, 2009 

Rupees Rupees 

SCHEDULE 6 : UNSECURED LOANS 

Sales Tax Deferral Loan under 1993 Package Scheme notified by 

Government of Maharashtra - 57,997,516 

–––––––––––––– –––––––––––––– 

[Refer Note 19 of schedule 20] - 57,997,516 

–––––––––––––– –––––––––––––– 

SCHEDULE 7 : FIXED ASSETS 

Rupees 

INTANGIBLE ASSETS 

Technical Know - How 88,507,364 - - 88,507,364 88,507,364 - - 88,507,364 - - 

TANGIBLE ASSETS 

GROSS BLOCK DEPRECIATION NET BLOCK 

PARTICULARS As at Additions Deletions/ As at As at Charge Deductions/ As at As at As at 

April 1, during Adjustments March 31, April 1, For Adjustments March 31, March 31, March 31, 

2009 the year during the year 2010 2009 the Year during the year 2010 2010 2009 

Freehold land 9,751,561 - - 9,751,561 - - - - 9,751,561 9,751,561 

Borewell 388,116 - - 388,116 59,288 6,291 - 65,579 322,537 328,828 

Factory Building 99,889,076 708,213 - 100,597,289 25,426,525 3,348,736 - 28,775,261 71,822,028 74,462,551 

Plant and Machinery 992,567,540 9,273,706 6,788,447 995,052,799 560,286,864 58,425,400 6,751,118 611,961,146 383,091,653 432,280,676 

Office Equipments 4,203,194 306,876 432,031 4,078,039 1,198,425 184,618 203,827 1,179,216 2,898,823 3,004,769 

Furniture and Fittings 5,795,067 133,404 - 5,928,471 3,314,965 265,181 - 3,580,146 2,348,325 2,480,102 

Computer 13,340,799 707,870 435,556 13,613,113 10,453,797 1,129,029 409,344 11,173,482 2,439,631 2,887,002 

Vehicles 4,134,105 - - 4,134,105 2,314,267 360,242 - 2,674,509 1,459,596 1,819,838 

Total 1,218,576,822 11,130,069 7,656,034 1,222,050,857 691,561,495 63,719,497 7,364,289 747,916,703 474,134,154 527,015,327 

Previous year 1,108,457,833 137,165,643 27,046,654 1,218,576,822 643,820,140 72,188,750 24,447,395 691,561,495 527,015,327 

Capital work-in-progress [including capital advances Rs 4,537,894 (previous year: Rs 3,876,466)] 11,575,425 4,209,467 

485,709,579 531,224,794




As at As at 

March 31, 2010 March 31, 2009 

Rupees Rupees 

Schedule 8 : Inventories 

Stores and spare parts [including goods in transit: 

Rs. Nil (previous year Rs.357,422)] 35,755,950 41,455,374 

Raw materials 85,620,762 103,511,604 

Packing materials 133,256 167,837 

Work-in-progress 78,080,072 53,681,773 

Finished goods 40,626,009 42,902,281 

–––––––––––––– –––––––––––––– 

240,216,049 241,718,869 

–––––––––––––– –––––––––––––– 

Schedule 9 : Sundry Debtors 

(Unsecured) 

Debts outstanding for a period exceeding six months 

- Considered good 1,369,202 1,297,386 

- Considered doubtful 1,326,668 3,485,865 

–––––––––––––– –––––––––––––– 

2,695,870 4,783,251 

–––––––––––––– –––––––––––––– 

Other debts 


- Considered doubtful - 257,064 

–––––––––––––– –––––––––––––– 

270,233,387 165,166,386 

–––––––––––––– –––––––––––––– 

272,929,257 169,949,637 

Less: Provision for doubtful debts 1,326,668 3,742,929 

–––––––––––––– –––––––––––––– 

271,602,589 166,206,708 

–––––––––––––– –––––––––––––– 

Schedule 10 : Cash and Bank Balances 

Cash on hand 392,235 244,306 

Balances with scheduled banks 

- In current accounts 21,093,672 97,234,963 

- In fixed deposit accounts (refer note below ) 51,520,000 16,020,000 

–––––––––––––– –––––––––––––– 

73,005,907 113,499,269 

–––––––––––––– –––––––––––––– 

Note: 

Fixed Deposit of Rs. 32,000,000 (previous year: Rs. Nil) is lying under lien with bank towards demand loan 

availed by the Company amounting to Rs. 28,400,000. 

31




32 

As at As at 

March 31, 2010 March 31, 2009 

Rupees Rupees 

Schedule 11 : Other current assets 

(Unsecured and considered good) 

Interest accrued on deposits 3,363,496 476,527 

Insurance claim recoverable 145,846 - 

–––––––––––––– –––––––––––––– 

3,509,342 476,527 

–––––––––––––– –––––––––––––– 

Schedule 12 : Loans and advances 

(Unsecured and considered good, unless otherwise stated) 

Advances recoverable in cash or in kind or for value to be received 


- Considered doubtful 597,860 912,896 

–––––––––––––– –––––––––––––– 

3,524,983 13,245,704 

Less: Provision for doubtful advances 597,860 912,896 

–––––––––––––– –––––––––––––– 

2,927,123 12,332,808 

- 

Prepaid expenses 2,429,903 2,118,166 

MAT credit entitlement 44,703,000 - 

Balances with excise, customs and sales tax authorities 11,543,589 30,092,710 

Deposits 4,861,505 5,150,688 

Tax deducted at source and advance tax - 3,977,360 

[Net of provision for taxation Rs. Nil 

(previous year: Rs. 23,549,276)] -––––––––––––– –––––––––––––– 

66,465,120 53,671,732 

–––––––––––––– –––––––––––––– 

Schedule 13 : Current liabilities and provisions 

A. Current Liabilities 

Bills payable 20,796,774 45,022,745 

Sundry creditors 

- Due to Micro, Small and Medium Enterprises 

[Refer Note 4 to schedule 20] - 315,969 

- Other sundry creditors 196,207,648 214,119,049 

Other liabilities 10,388,743 10,375,495 

Advances received from customers 8,620,660 2,295,013 

–––––––––––––– –––––––––––––– 

(A) 236,013,825 272,128,271 

–––––––––––––– –––––––––––––– 

B. Provisions 

Taxation 5,608,813 - 

[Net of tax deducted at source and advance tax Rs. 40,851,811 

(previous year: Rs. Nil)] 

Gratuity 11,756,166 17,176,087 

Leave encashment 7,433,208 7,492,064 

–––––––––––––– –––––––––––––– 

(B) 24,798,187 24,668,151 

–––––––––––––– –––––––––––––– 

(A+B) 260,812,012 296,796,422 

–––––––––––––– ––––––––––––––




2009-2010 2008-2009 

Schedule 14 : Sales and Related Services 

Sales 

Rupees Rupees 

- Domestic sales 740,695,000 650,897,061 

- Export sales 183,923,632 521,974,449 

–––––––––––––– –––––––––––––– 

924,618,632 1,172,871,510 

Less: Excise duty 50,027,535 67,238,525 

–––––––––––––– –––––––––––––– 

Sales (Net) 874,591,096 1,105,632,985 

Scrap sales 16,025,993 20,522,481 

Job work charges 1,957,525 403,416 

–––––––––––––– –––––––––––––– 

892,574,614 1,126,558,882 

–––––––––––––– –––––––––––––– 

Schedule 15 : Other income 

Interest on deposits (Gross) 

[(Tax deducted at source Rs. 395,811; (previous year Rs. 486,594)] 

4,819,627 2,076,870 

Foreign exchange gain (net) 36,200,877 - 

Provision for doubtful advances/debts no longer required written-back 2,731,297 1,266,609 

Sales tax and excise refund 10,422,239 13,231,462 

Liabilities/ provisions no longer required written - back 5,772,670 15,626,421 

Development tooling income 26,803,609 2,761,305 

Profit on sale of fixed assets (net) 297,269 - 

Miscellaneous income 2,267,183 923,807 

–––––––––––––– –––––––––––––– 

89,314,771 35,886,474 

–––––––––––––– –––––––––––––– 

Schedule 16 : Cost of goods sold 

A. Raw materials and packing materials consumed 

Opening stock 103,511,604 55,580,200 

Purchases 444,281,152 606,243,068 

–––––––––––––– –––––––––––––– 

547,792,756 661,823,268 

Less : Closing stock 85,620,762 103,511,604 

–––––––––––––– –––––––––––––– 

462,171,994 558,311,664 

Packing material consumed 10,506,823 14,100,315 

Freight local inward 7,447,045 9,223,508 

–––––––––––––– –––––––––––––– 

(A) 480,125,862 581,635,487 

–––––––––––––– –––––––––––––– 

B. (Increase)/ decrease in work-in-progress and Finished goods 

Opening stock 

- Work-in-progress 53,681,773 81,315,046 

- Finished goods 42,902,281 38,111,569 

–––––––––––––– –––––––––––––– 

96,584,054 119,426,615 

–––––––––––––– –––––––––––––– 

Closing stock 

- Work-in-progress 78,080,072 53,681,773 

- Finished goods 40,626,009 42,902,281 

–––––––––––––– –––––––––––––– 

118,706,081 96,584,054 

–––––––––––––– –––––––––––––– 

(B) (22,122,027) 22,842,561 

–––––––––––––– –––––––––––––– 

(A+B) 458,003,835 604,478,048 

–––––––––––––– –––––––––––––– 

33




2009-2010 2008-2009 

Schedule 17 : Employee costs 

Rupees Rupees 

Salaries, wages, bonus and allowances 99,188,555 89,294,724 

Contribution to provident fund and other funds 6,426,628 5,997,838 

Gratuity 4,870,589 3,315,086 

Leave encashment 1,602,446 - 

Staff welfare expenses 7,708,033 7,576,458 

–––––––––––––– –––––––––––––– 

119,796,251 106,184,106 

–––––––––––––– –––––––––––––– 

Schedule 18 : Manufacturing and other expenses 

Stores, spare parts and tools consumed 53,149,311 44,388,812 

Labour charges for resharpening tools 11,676,982 11,146,723 

Power and fuel 65,791,255 70,417,465 

Job work charges 37,090,921 33,312,139 

Insurance 2,916,739 2,892,594 

Lease rentals charges 144,000 144,000 

Excise duty 1,611,996 (1,670,102) 

Rent 883,048 1,035,036 

Rates and taxes 4,815,076 6,152,833 

Repairs and maintenance: 

- Building 1,599,175 4,239,970 

- Plant and machinery 17,709,239 29,196,911 

-- Others 3,821,433 6,697,108 

Legal and professional fees 4,040,390 4,302,445 

Hire charges 714,807 1,298,586 

Printing and stationery 1,614,585 1,495,611 

Travelling and conveyance 4,347,328 6,404,864 

Communication 2,262,744 2,848,782 

Freight outward and forwarding expenses 10,568,726 10,601,598 

Brokerage charges 155,836 - 

Vehicle maintenance expenses 447,521 413,226 

Directors' sitting fees 450,000 430,000 

Auditors' remuneration(excluding service tax) 

- As Auditors 1,750,000 1,700,000 

- For tax audit 250,000 250,000 

- For other matters - 66,801 

- Out - of - pocket expenses 86,965 - 

Trade mark fees 7,217,588 5,629,916 

Loss on sale of fixed assets (Net) - 1,442,835 

Foreign exchange loss (Net) - 104,955,611 

Bad debts 21,968 - 

Provision for doubtful debts 617 - 

Miscellaneous expenses 2,826,728 3,231,869 

–––––––––––––– –––––––––––––– 

237,964,978 353,025,633 

–––––––––––––– –––––––––––––– 

Schedule 19 : Interest and other Financial Charges 

Interest on 

- Term loans 6,349,238 11,337,440 

- Others - 89,014 

Bill discounting charges 592,336 403,792 

Bank charges 190,253 1,619,385 

–––––––––––––– –––––––––––––– 

7,131,827 13,449,631 

–––––––––––––– –––––––––––––– 

34




20. NOTES TO THE ACCOUNTS 

20.1. Capital commitments 

Estimated amount of contracts, net of capital advances of Rs. 4,537,894 (previous year Rs. 3,876,466), 

remaining to be executed on capital account and not provided for Rs. 12,593,180 (previous year 

Rs. 7,927,022). 

20.2. Contingent liabilities not provided for: 

(a) Bills discounted with banks and remaining outstanding which are yet to mature Rs. 18,489,976 

(previous year Rs. 5,213,607); 

(b) Demands raised by sales tax authorities against the Company not acknowledged as debts and 

not provided for Rs. 3,910,545 (previous year Rs. 4,017,031); 

(c) Demands raised by excise authorities against the Company not acknowledged as debts and not 

provided for, pertaining to accounting years 2002-03, 2003-2004 and 2004-05 in respect of 

which the Company is in appeal aggregating Rs. Nil (previous year Rs. 9,371,299); 

(d) Demands raised by service tax authorities against the Company not acknowledged as debts and 

not provided for on technical know how in respect of which the company is in appeal aggregating 

Rs. 2,479,821 (previous year Rs. 2,479,821). 

20.3. Managerial remuneration: 

2010 2009 

Salaries and allowances 1,394,000 1,128,215 

Contribution to pension and provident fund (refer note below) 115,200 108,138 

Commission - 165,419 

Total 

Note: 

1,509,200 1,401,772 

1. Excludes gratuity and leave encashment benefits, since the actuarial valuation is done on global basis. 

2. The previous year’s figures provided above are based on the computation as provided in section II of the part 

2 of Schedule XIII (remuneration payable by companies having no profits or inadequate profits) of the Act. 

Computation of Net Profit in accordance with Section 198 of the Companies Act, 1956 

Particulars 2010 2009 

Net profit before tax 15,976,698 

Add: 

Depreciation provided in the profit and loss account 72,188,750 

Director/Directors’ remuneration 1,401,772 

Director/Directors’ sitting fees 430,000 

Provision for doubtful debts - 

(Profit) /Loss on sale/ disposal of fixed assets 1,442,835 

91,440,055 

Less: 

Depreciation under Section 350 of the Act 72,188,750 

Provision for doubtful debts / advances no longer required written back 1,266,609 

(Profit)/Loss on sale/ disposal of fixed assets under Section 350 of the Act 1,442,835 

Net profit for the purpose of directors’ commission 

74,898,194 

16,541,861 

Commission permissible under the Act @ 1% 165,419 


(previous year Chief Executive Officer and whole-time director) 165,419 

35




20.4 Outstanding Dues to micro, small and medium enterprises 

Sundry creditors as at the year end include outstanding dues amounting Rs. Nil (previous year Rs. 315,969) to 

micro and small enterprises. 

The following disclosures are made for amounts due to micro, small and medium enterprises: 

20.5. Un hedged foreign currency exposure 

The following foreign currency exposures have not been hedged by derivative instruments or otherwise as at the 

balance sheet date. 

Foreign Currency Payables 

- representing creditors USD 550,435 2,279,625 24,901,690 116,693,993 

Euro Nil 1,886 Nil 126,558 

CHF 43,516 204,269 1,851,592 9,165,035 

- representing advances USD 21,699 2,488 972,820 126,278 

Euro 7,929 2,082 474,590 139,697 

- Loan from T H Licensing Inc. 

U.S.A. [(External commercial 

borrowing (‘ECB)’] USD 5,000,000 5,000,000 226,200,000 255,950,000 

- Loan from FMC USD 5,500,000 5,800,000 248,820,001 269,978,022* 

- Interest on ECB USD __ . 14,579 __ . 746,320 

Foreign currency receivables 

- representing debtors USD 2,722,088 1,025,537 122,038,025 52,051,155 

Euro 1,310 1,310 78,418 87,907 

36 

Particulars 

Principal amount and interest due thereon remaining unpaid to any supplier 

2010 2009 

as at the year end 

Amount of interest paid by the Company in terms of Section 16 of the MSMED 

Act, along with the amount of the payment made to the supplier beyond the 

Nil 315,969 

appointed day during the accounting year 

Amount of interest due and payable for the period of delay in making payment 

(which have been paid but beyond the appointed day during the year) but 

Nil Nil 

without adding the interest specified under the MSMED Act. 

Amount of interest accrued and remaining unpaid at the end of the 

Nil Nil 

accounting year Nil 6,368 

On the basis of information and records available with the Company, the above disclosures are made in respect 

of amounts due to the micro, small and medium enterprises, who have registered with the relevant competent 

authorities. This has been relied upon by the auditors. 

Particulars 

Foreign 

Currency 

Amount in 

Foreign Currency 

Amount equivalent in Rupees 

2010 2009 2010 2009 

* - amounts have been restricted to maximum rupee equivalent. (Refer Note 18 to Schedule 20) 

20.6. Transfer pricing 

The Company’s management is of the opinion that its international transactions are at arm’s length 

so the transfer pricing legislation under Section 92-92F of the Income tax Act, 1961 will not have any 

impact on the financial statements, particularly on the amount of tax expense and that of provision for 

taxation.




20.7. Deferred taxes, net 

The significant components of deferred tax asset and liability consist of the following: 

(in Rupees) 


Deferred tax liabilities 

Depreciation on fixed assets 26,697,263 24,459,767 

Unrealised exchange fluctuation 7,966,534 - 

Total deferred tax liabilities 34,663,797 24,459,767 

Deferred tax assets 

Provision for retirement benefits 6,522,468 8,384,705 

Provision for bad debts 450,934 1,272,222 

Provision for doubtful advances 203,213 310,293 

Accrual for expenses allowable as tax deduction on payment basis 1,895,212 3,122,207 

Unrealised exchange fluctuation - 8,549,400 

Allowance for carry forward loss and unabsorbed depreciation 37,398,780 16,616,590 

Total deferred tax assets 46,470,607 38,255,417 

Net deferred tax assets (note) - - 

Note: On consideration of prudence, the deferred tax assets are recognised only to the extent of deferred tax 

liabilities. 

20.8 Details of licensed and installed capacity 

(a) Production, Purchases, Sales and Stocks of Finished Goods: 

Class of Goods 

Automobile Transmission Gears Unit of Measurement 2010 2009 

Licensed capacity No. of Pieces Not Applicable Not Applicable 

Installed capacity No. of Pieces 4,425,000 4,425,000 

Note: Installed capacity has been certified by the Management and this has been accepted by the Auditors without 

verification, this being a technical matter. 

(b) Quantitative Information 

Automotive Transmission Gears 

2010 

2009 

Particulars Qty in pieces Value (Rupees) Qty in pieces Value (Rupees) 

Opening stock 128,063 42,902,281 112,046 38,111,569 

Production 1,614,577 1,802,430 

Sales* 1,626,196 874,591,096 1,785,873 1,105,632,985 

Closing stock 116,984 40,626,009 128,603 42,902,281 

* Net of adjustment of shortage/excess. 

37




20.9 Consumption of raw materials, packing material and stores, spare parts and tools: 

(a) Quantity of raw material and packing material 

38 

2010 

2009 

Particulars 

Forgings and Assembly 

Qty in pieces Value (Rupees) Qty in pieces Value (Rupees) 

components 3,250,745 443,714,614 7,341,919 519,639,579 

Round bar 330,524 18,457,380 650,247 38,672,085 

Packing materials 10,506,823 14,100,315 

Freight inward 7,447,045 9,223,508 

Total 480,125,862 581,635,487 

(b) Value of imported and indigenous raw material and packing material consumed and 

percentage thereof to total consumption: 

2010 

Value (Rupees) Percentage Value (Rupees) Percentage 

Imported 11,081,332 2.31 15,023,684 2.58 

Indigenous 469,044,530 97.69 566,611,803 97.42 

Total 480,125,862 100.00 581,635,487 100.00 

(c) Details of stores, spare parts and tools consumed comprising of: 

2010 

Value (Rupees) Percentage Value (Rupees) Percentage 

Imported 9,212,566 17.33 5,154,740 11.61 

Indigenous 43,936,745 82.67 39,234,072 88.39 

Total 53,149,311 100.00 44,388,812 100.00 

20.10 Value of Imports on CIF basis: 

2010 (Rupees) 2009 (Rupees) 

Raw Materials, Stores and Spare Parts 22,052,136 42,730,626 

Capital Goods 8,149,857 101,499,261 

Total 30,201,993 144,229,887 

20.11 Expenditure and earnings in foreign currency (on accrual basis): 

(a) Expenditure: 


Travelling 94,018 331,937 

Trade mark fees (inlcuiding prior period adjustment) 7,217,588 10,183,375 

Interest 6,295,653 11,337,440 

Others 5,678 49,472 

2009 

2009



(b) Earnings: 



FOB value of exports 183,923,632 521,974,449 

Development tooling income (including prior period adjustment) 16,879,609 7,410,970 

20.12 Details of lease as lessee: 

Operating Lease 

The Company leases office and guest house facilities under cancellable operating lease agreements that are 

renewable on a periodic basis at the option of both the lessor and the lessee. Rental payments under such leases 

are Rs. 883,048 and Rs. 1,035,036 during the years ended 31 March 2010 and 31 March 2009 respectively. 

20.13 Earnings per share 

Computation of Earning Per Share (Basic and Diluted) 2010 (Rupees) 2009 (Rupees) 

Net profit attributable to equity share holders (A) 

Weighted average number of equity shares of Rs. 10 each 

150,893,369 21,924,971 

outstanding during the year (B) 

Basic and diluted earnings per share (Rs per equity share of 

27,320,540 27,320,540 

Rs 10 each) (A/B) 5.52 0.80 

20.14 Segment reporting: 

(a) Primary Segment: 

In accordance with the requirements of Accounting Standard 17, segmental reporting, the Company has determined 

its business segment i.e., automotive transmission gears as its primary segment and geographical segment as 

its secondary segment. Since 100% of the Company’s business is from automotive transmission gears, there are 

no other primary reportable segments. Thus, the segment revenue, segment result, total carrying amount of 

segment assets, total carrying amount of segment liabilities, total cost incurred to acquire segment assets, the 

total amount of charge for depreciation during the year are all as reflected in the financial statements as of and 

for the year ended 31 March 2010. 

(b) Secondary Segments (Geographical Segment): (in Rupees) 

Particulars India Outside India Total 

Revenue from external customers 708,650,982 183,923,632 892,574,614 

(604,584,433) (521,974,449) (1,126,558,882) 

Carrying amount of segment assets 948,734,502 123,563,853 1,072,298,355 

(1,032,852,743) (52,422,382) (1,085,275,125) 

Additions to fixed assets during the year 11,130,069 - 11,130,069 

(137,165,643) - (137,165,643) 

Figures in brackets pertain to the previous year. 

39




20.15 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. Pfaffikon 

2 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) 

Graziano Transmission Czech S R O (GTC) 

Graziano Transmission SPA ( GTS ) 

Oerlikon ( China ) Technology Co. Ltd. (OCTL) 

5 Key Management personnel Mr. D. E. Jacob - Managing Director 

Mr. A. K. Kaul (Whole-Time Director from 1 January 2008 

upto 30 June 2008) 

Mr. L. K. Chaudhary (Chief Executive Officer & Managing 

Director from 1 January 2008 to 21 September 2008) 

40



(b) Transactions with related parties 

Particulars 

Ultimate 

Holding 

Company 

Subsidiary of 

Ultimate 

Holding 

Company 


Holding 

Company 

Fellow 

Subsidiaries 

(in Rupees) 

Key 

Management 

Personnel 

(Cr)/Dr (Cr)/Dr (Cr)/Dr (Cr)/Dr (Cr)/Dr 

Purchase of fixed assets - 7,822,457 - - - 

30,685,114 - - - 

Purchase of raw materials, Stores and 14,874,351 - 7,253,350 - 

spare parts & job work - 25,152,944 - 42,663,446 - 

Trade mark fees 7,217,588 

10,183,375 

- - - 

Interest paid / provided - - 6,295,653 

11,337,440 

- - 

Sale of goods ( net ) - (152,994,385) - - - 

(491,274,438) - (60,427,269) - 

Sale of fixed assets - - - - - 

(967,737) - - - 

Development tooling income - (16,879,609) - - - 

(7,410,970) - - - 

Remuneration to key management personnel - - - - 1,509,200 

2,814,895 

Loan repayment 13,744,500 

- 

Receivables from related parties - 114,388,014 - 78,418 - 

47,789,783 - 3,257,313 - 

Payables to related parties (1,851,592) (24,234,459) - (2,450,805) - 

(9,165,036) (107,529,324) - (1,935,532) - 

Secured loan outstanding - (248,820,001) (226,200,000) - - 

(269,978,022) (255,950,000) - - 

Interest payable - - - 

(746,320) 

- - 

Note : Figures in italics pertains to the previous year. 

41




(c) Particulars of transactions of fellow subsidiaries during the year ended 31st March 2010 and 

balances as at 31st March 2010 

(in Rupees) 

42 

Name of the 

Related party 

Graziano Transmission India 

(Private) Ltd 

Oerlikon Balzers Coating 

India Ltd 

Graziano Transmission Czech 

S R O 

Graziano Transmission SPA 

Oerlikon (China) Technology 

Co. Ltd. 

Description 

Transaction 

value 

during the 

year ended 

31st March 

2010 

Receivable / 

(Payable) 

at 

31st March 

2010 

(Cr)/Dr (Cr)/Dr 

Transaction 

value 

during the 

year ended 

31st March 

2009 

Receivable / 

(Payable) 

at 

31st March 

2009 

Purchase of 14,396 - 36,045,508 - 

Raw Material 

Sales - - (56,169,477) - 

Payables - (14,684) - - 

Receivables - - - 3,169,406 

Purchase of Job work 7,238,954 - 6,565,576 - 

Payables - (2,436,121) - (1,808,974) 

Purchase of 

Raw Material 

- - 52,361 - 

Reimbursement 

of expenses 

- - 74,916 - 

Sales - - (4,252,588) - 

Payables - - (126,558) 

Receivables - - - - 

Sales - - - - 

Receivables - 78,418 - 87,907 

Sales - - (5,205) - 

(d) Payment made to Key Management Personnel 

Related Party Designation Nature of Transaction 2009-10 

(in Rupees) 

2008-09 

A. K. Kaul Whole Time Director and 

Chief Executive Officer 

Remuneration Nil 765,419 

Retirement benefits Nil 1,413,123 

D.E. Jacob Managing Director Remuneration 1,509,200 636,353 

Total 1,509,200 2,814,895 

20.16 The Company has disclosed the turnover as net of total excise duty (excluding difference of excise duty on closing 

stock and opening stock). The excise duty related to the difference between the closing stock and opening stock 

is recognized separately in the profit and loss account.




20.17 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 

a. Provident fund 

b. State defined contribution plans 

i. Employer’s contribution to labour welfare fund 

ii. Employer’s contribution to employee’s pension scheme 1995 

During the year, the company has recognized the following amounts in the profit and loss account: 

2010 2009 

- Employer’s contribution to provident fund * 

[Includes EDLI charges and employer’s contribution to 

employee’s pension scheme 1995] 

6,385,048 5,953,522 

- Employer’s contribution to labour welfare fund* 41,580 44,316 

* Included in contribution to provident and other funds (refer schedule ‘17’) 

II Defined Benefit Plan 

A. Gratuity 

In accordance with Accounting Standard15, actuarial valuation was done in respect of the aforesaid 

defined benefit plan of gratuity based on the following assumptions:- 

(i) Actuarial Assumptions for the year 

Assumptions 2010 (Rupees) 2009 (Rupees) 

Discount rate (per annum) 8.00% 7.75% 

Rate of increase in compensation levels 7.50% 7.50% 

Rate of return on plan assets Nil Nil 

(ii) Changes in the Present Value of Obligation 


Present value of obligation as at 1 April 2009 17,176,087 15,030,124 

Interest cost 1,450,251 1,288,660 

Past service cost - - 

Current service cost 1,682,080 1,662,685 

Curtailment cost/ (credit) - - 

Settlement cost/ (credit) - - 

Benefits paid (290,510) (1,169,124) 

Actuarial (gain)/ loss 1,738,258 363,742 

Present value of obligation as at 31 March 2010 21,756,166 17,176,087 

43




44 

(iii) Amount recognized in the Balance Sheet 

Particulars 2010 (Rupees) 2009 (Rupees) 

Present value of obligation as at 31 March 2010 21,756,166 17,176,087 

Fair value of plan assets as at 31 March 2010 10,000,000 - 

Net liability recognized as at 31 March 2010* 11,756,166 17,176,087 

* Included in provisions “gratuity” (refer Schedule “13”) 

(iv) Expenses recognized in the Profit and Loss Account 

Particulars 2010 (Rupees) 2009 (Rupees) 

Current service cost 1,682,080 1,662,685 

Past service cost - - 

Interest cost 1,450,251 1,288,660 

Expected return on plan assets - - 

Curtailment cost/ (credit) - - 

Settlement cost/ (credit) - - 

Actuarial (gain)/ loss 

Total expenses recognized in the profit and 

1,738,258 363,742 

loss account ** 4,870,589 3,315,087 

(v) 

** Included in employee costs “gratuity” (refer Schedule “17”) 

The liability for leave encashment and compensated absences as at year end is Rs. 7,433,208 

(previous year Rs. 7,492,064). 

(vi) The estimates of future salary increases, considered in actuarial valuation, take in to account 

inflation, seniority, promotion and other relevant factors, such as supply and demand in the 

employment market. 

20.18 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 corporate 

guarantee executed to secure the loan availed by the company from GECSI. FMC had agreed to treat the said 

sum as External commercial loan to the Company, subject to the terms and conditions set forth in the letter of 

intent date January 15, 2004. Reserve Bank of India (RBI) and Ministry of finance had not approved the 

application made by the Company to treat the payment as external commercial loan. Further, RBI has not 

approved the payment of interest on the amount paid by FMC and repayment of principal amount exceeding 

Rs. 543,792,583. During 2005-06, 2006-07 and 2009-10, the Company had repaid USD 5,967,023 (Rs. 

264,471,470) USD 200,000 (Rs. 9,344,000) and USD 300,000 (Rs. 13,744,500) respectively, to FMC. 

As at the year end, the Company owes USD 5,500,000 equivalent Rs 248,820,001 (maximum liability restricted 

by RBI to Rs 256,233,522) to FMC towards the said loan. 

The said loan is secured by creation of hypothecation charge on all the fixed and current assets, excluding land 

and building. 

20.19 The Company was entitled to a deferred sales tax benefit under the package scheme of incentives, 1993 of the 

Government of Maharashtra for its plant at Sr. no. 157, Devarwadi, Shinoli, dist. Kolhapur. During the year, the 

Company has settled the entire liability at lower amount in pursuance of the option granted to it by the Bombay 

Sales Tax Act, 1959 and the difference between the amount payable and the amount paid on discounting the 

liability, amounting to Rs. 34,195,164 has been credited to the profit and loss account for the year and shown 

in the profit and loss account.




20.20 Prior period income (net) represents development tooling income aggregating Rs. 7,410,970 and trademark 

charges aggregating Rs. 4,553,460 pertaining to the previous years. 

20.21 Previous year figures have been regrouped / rearranged wherever necessary to conform to current year’s 

presentation. 


Avinash Gandhi D. E. Jacob 




Place : Goa 

Date : 11th May 2010 

45


ANNEXURE 

ADDITIONAL INFORMATION PURSUANT TO PART IV OF SCHEDULE VI TO THE ACT 

Balance Sheet Abstract and Company’s General Business Profile: 

I Registration Details 

CIN No. 

L34300MH1990PLC055300 

State Code 

1 1 

Balance Sheet Date 3 1 0 3 2 0 1 0 

II Capital raised during the year (Amount in Rs. Thousands) 

Public Issue Right Issue 

N I L N I L 

Bonus Issue Private Placement 

N I L N I L 

III Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands) 

Total Liabilities # Total Assets 

1 1 4 0 5 0 9 

# Including Shareholders’ Funds 

Sources of Funds 

1140509 

Paid–Up Capital Reserves and Surplus 

2 7 3 2 0 5 1 0 3 0 1 8 

Secured Loans Unsecured Loans 

5 0 3 4 7 3 N I L 

Deferred tax Liabilities 

N I L 

Application of Funds 

Unsecured Loans 

Net Fixed Assets + – Net Current Assets 

4 8 5 7 0 9 � 3 9 3 9 8 7 

Miscellaneous Expenditure Accumulated Losses 

N I L N I L 

IV Performance of Company (Amount in Rs. Thousands) 

Turnover Total Expenditure 

8 9 2 5 7 4 8 8 6 6 1 6 

+ – Profit/Loss Before Tax@ + – Profit/Loss After Tax 

� 1 2 9 4 6 8 � 1 5 0 8 9 3 

(Please tick � appropriate box + for Profit, – for Loss) 

+ – Earning per Share (Basic and Diluted) (in Rs.) Dividend Rate % 

� 5 . 5 2 

N I L 

V Generic Names of Three Principal Products/Services of the Company (as per monetary terms) 

Item Code No. (ITC Code) Product Description 

8 4 8 3 4 0 . 0 0 

Transmission Gears 


Avinash Gandhi D. E. Jacob 




Place : Goa 

Date : 11th May 2010 

46

� 

� 



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

Registered Folio ........................................ 

ATTENDANCE SLIP 

Name of the Member / Proxy / Representative ........................................................................................................................ 

........................................................................................................................................................................................... 

I hereby record my presence at the 20TH ANNUAL GENERAL MEETING of the Company held on Thursday 23rd September, 2010 

at 3.00 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 20TH ANNUAL GENERAL 

MEETING of the Company to be held on Thursday 23rd September 2010, and at any adjournment thereof. 

Signed this ......................................... day of ............................................2010 

Reference Folio / Client ID No. 

No. of Shares 


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

Re. 1 

Revenue 

Stamp 

Signature 

PROXY FORM 

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 

47

fairfield atlas limited - Bombay Stock Exchange

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