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Notes to Accounts of Lumax Auto Technologies Ltd.
Mar 31, 2025
(v) The Company had total cash outflows for leases of '' 759.34 Lakhs for the year ended March 31, 2025 (March 31, 2024 '' 643.34 Lakhs).
(vi) Extension and termination options : Extension and termination options are included in property lease agreements. These are used to maximise operational flexibility in terms of managing the assets used in the Companyâs operations. Extension and termination options held are exercizable only by the Company and not by the lessor.
(vii) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
(viii) Variable Lease Payment : The Company does not have any leases with variable lease payments.
(ix) Residual value guaranteed : There are no residual value guaranteed in the lease contracts.
(x) Refer note 44C for maturity analysis of contractual undiscounted cashflows in respect of lease recognised under Ind AS 116.
There are no contractual obligations to purchase, construct or develop investment properties.
Fair value of investment properties is ascertained on the basis of market rates as determined by the independent registered valuer.
The investment properties are leased to fellow subsidiary and enterprises owned or significantly influenced by key managerial persons and/or their relatives under operating leases with rentals payable monthly. Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term.
Lease payments for some contracts include CPI increases, but there are no other variable lease payments that depend on an index or rate. Since the investment properties are leased to related parties only, the credit risk on the same is minimal. Although the Company is exposed to changes in the residual value at the end of the current leases, the Company typically renews the operating leases with related parties and therefore will not immediately realise any reduction in residual value at the end of these leases.
The valuation has been taken considering values arrived using the following methodologies:
(a) Current Replacement cost method, which comprises of net amount of money that is required to replace an asset with a similar one in the current market.; and
(b) Sales comparable method, which compares the price or price per unit area of similar properties being sold in the marketplace
Further, inputs used in the above valuation models are as under:
(i) Market rates/ Marketability of the Land in the Vicinity.
(ii) Recent property deals/transactions.
(iii) Negotiation skills of the buyer/seller.
(iv) Demand and supply of properties.
(v) Locality, neighbourhood, civic amenities, its connectivity to major centres etc.
(vi) Shape, size, prominence, plot area and topography etc.
(vii) Need/ Urgency of the seller to sell the said property.
âOptionally convertible redeemable debentures (OCRD) are convertible at the option of the issuer of the instrument and the coupon rate is 0.01%. At the expiry of 10 years, each OCRD shall be mandatorily converted into 1 equity share. However, issuer may, at any time prior to expiry of 10 years convert the OCRDs in the ratio of 1:1 (i.e. one (1) equity share for each OCRD issued by issuer) or redeem the OCRDs at the fair market value or at par value, whichever is higher. The resulting shares upon conversion shall rank pari-passu in all respect with the existing equity shares. Accordingly, OCRDs has been classified as an equity instrument both in books of issuer and the Company in terms of the requirement of the Ind AS 109.
âInvestment in equity instrument where the business model of the Company is not for trading, the Company has opted for irrevocable option to present subsequent changes in the fair value of an investment in an equity instrument through Other Comprehensive income (FVTOCI).
**The Company has pledged its deposits with financial institution for Security against loan taken by one of its subsidiary. As at March 31, 2025 the fair values of deposits pledged '' 3,607.67 Lakhs (March 31, 2024: Nil).
#Investment in current investments, the Company has opted irrevocable option to present subsequent changes in the fair value of an investment in an financial instrument through profit or loss (FVTPL).
d) Terms and rights attached to equity shares:
The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity share is entitled to one vote per share.
The Company declares and pays dividends in Indian rupees. The dividend, if proposed by the Board of Directors, is subject to the approval of the shareholders in the Annual General Meeting.
In the event of liquidation, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of any preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
18.1 Nature and purpose of reserves
a) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
d) Retained Earnings
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
e) Capital reserve
Capital reserve are the reserve created for gain on bargain purchase related to business combinations.
ââTerm Loan amounting '' 3,890.33 Lakhs (after netting off '' 109.67 Lakhs (March 31, 2024: '' 165.16 Lakhs) outstanding upfront fees to be charged off over the period of loan through Effective Interest Rate method} (March 31, 2024: '' 4,834.84 Lakhs) from financial institution carrying interest @ 10.20% per annum are secured by way of first and exclusive charge in favour of the security trustee (inter se first pari pasu charge with Kotak Mahindra Bank Limited) (by way of registered/equitable mortgage) on identified land and building and structures thereon of the immovable assets and by way of hypothecation on all the moveable fixed assets of the Company, both present and future. This loan is repayable in equal quarterly instalment of '' 250.00 Lakhs each over a period of five years started from June 2024.
#Vehicle loan amounting '' 706.17 Lakhs (March 31, 2024: '' 749.23 Lakhs) from banks carrying interest @ 8.30%-9.40% per annum are secured by way of hypothecation of the respective vehicles acquired out of proceeds thereof. These loans are repayable over a period of thirty nine months from the date of availment.
âWorking capital demand loan '' 14,600.00 Lakhs (March 31, 2024: '' 12,550.70 Lakhs) from Bank is repayable in 90-180 days from respective drawdown and carries interest @ 7.75% to 8.45% per annum, secured by way of Pari-passu first charge on entire current assets of the Company both present and future.
ââWorking capital demand loan '' 4,000.00 Lakhs (March 31, 2024: '' 500.00 Lakhs) from Bank is repayable in 90-180 days from respective drawdown and carries interest @ 7.65% to 8.45% per annum, unsecured.
#Working capital demand loan '' 7,000.00 Lakhs (March 31, 2024: '' 7,000.00 Lakhs) from financial institution is repayable in 90 days from respective drawdown and carries interest @ 8.50% per annum secured against the first pari pasu charge on current assets of the Company.
##Working capital demand loan '' 2,400.00 Lakhs (March 31, 2024: '' 4,000 Lakhs) from financial institution is repayable in 90 days from respective drawdown and carries interest @ 8.50% per annum, unsecured.
âââCash Credit '' 11.54 Lakhs (March 31, 2024: '' Nil) secured by way of Pari-passu charge on stocks and book debts of the Company.
Undrawn committed borrowing facility
The Company has availed fund based working capital limits amounting to '' 35,000.00 Lakhs (March 31, 2024: '' 26,000.00 Lakhs) from banks and financial institutions. An amount of '' 6,988.46 Lakhs remain undrawn as at March 31, 2025 (March 31, 2024: '' 1,949.30 Lakhs).
The Company has satisfied all debt covenants prescribed in the terms of loans. The Company has not defaulted on any loans payable.
The Company have not been declared wilful defaulter by any bank or financial institutions or government or any government authority.
The Company has been sanctioned working capital limit in excess or '' 500 Lakhs in aggregate from banks and financial institutions during the year on the basis of security of current assets of the Company. The Company has filed quarterly returns or statements with such banks and financial institutions, which are not in agreement with the unaudited books of account as set out below:
H GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS A) Leave obligation
The liabilities for compensated absence namely earned and contingency leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in statement of profit and loss.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. The scheme is funded with an insurance company in the form of qualifying insurance policy.
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37. |
COMMITMENTS AND CONTINGENCIES |
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a) |
Capital and other commitments Estimated amount of contracts remaining to be executed on capital account and not provided for: Capital commitments are '' 1,781.09 Lakhs (As at March 31, 2024''359.79 Lakhs), net of advances. |
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b) |
Contingent liabilities |
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As at March 31, 2025 |
As at March 31, 2024 |
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Claims against the Company not acknowledged as debts |
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Income tax (refer note (i) below) |
- |
1,033.28 |
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Goods & Services tax (refer note (ii) below) |
386.61 |
- |
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Customs & Excise (refer note (iii) below) |
- |
51.38 |
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Employee State Insurance |
0.90 |
0.90 |
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(i) The Company received income tax order under Section 143(3) dated December 30, 2019 related to A.Y. 2018-19 on account of search and seizure operation for which Company had received demand of '' 1,033.28 Lakhs including interest u/s 234ABC in respect of above matter for which the Company had filed the appeal to income tax authorities. During the earlier year, Income Tax department has filed an appeal with ITAT(A) against the favourable order of CIT(A). During the previous financial year, the ITAT had passed the Order in the favour of the Company and the department has not preferred appeal against the Order.
(ii) a) A show cause notice was issued by the GST department on May 28, 2024 on the basis of the audit conducted by the department for FY 2019-20 directing the Company to pay the tax amount along with interest and penalty. The Company submitted relevant reply and documents. The Deputy Commissioner of State Tax issued an Order in original dated July 19, 2024 confirming demand of '' 352.20 Lakhs (including interest and penalty) alleging availment of ineligible ITC and mismatch with GSTR 3B and 2A. The Company has preferred an appeal before the Joint Commissioner of State Tax (Appeals) dated October 18, 2024 and '' 18.52 Lakhs have been deposited by Company under protest for the case.
b) The Company received a notice under DRC01 dated April 27, 2024 under the CGST Act for FY 2018-19 on grounds of differences between the GSTR 2A and GSTR3B amounting to '' 34.41 Lakhs (including interest and penalty). The Company has preferred an appeal against the aforesaid order with the First Appellate Authority dated July 23, 2024 and deposited '' 1.17 Lakhs under protest.
c) I n regard to the bill discounting of invoices with bank by one of the Companyâs vendor (Transporter), the bank had filed an application under Section 19 of the Recovery of Debts due to Banks and Financial Institution Act, 1993 before the Ld. DRT-II, Chandigarh for recovery of '' 999.76 Lakhs and interest thereon @ 13.75% p.a. from Company, vendor and other parties. The Company and other parties including vendor has received an order dated February 25, 2019 from Debts Recovery Tribunal- II, Chandigarh for demanding the above amount jointly and severally. The Company has filed an appeal before Debt Recovery Appellate Tribunal (DRAT) dated March 13, 2020 against '' 782.24 Lakhs (decretal amount to which the Company is a defendant party) along with interest 13.75% p.a. and deposited 50% of decretal amount in earlier years. Subsequent to the year end, the appeal was decided in favour of the Company by DRAT vide its order dated April 8, 2025. Further, deposit was refunded to the Company on May 07, 2025 along with interest accrued on such deposits.
d) The Company has provided corporate guarantee to financial institutions against loan taken by three of the subsidiary companies amounting '' 16,950.00 Lakhs (March 31, 2024: '' 25,000.00 Lakhs).
39. The Companyâs business activity falls within a single business segment i.e. manufacturing and trading of automotive components, accordingly there are no additional disclosures to be furnished in accordance with the requirement of Ind AS 108 âOperating Segmentsâ with respect to single reportable segment. Further, the operations of the Company is domiciled in India and there are no assets lying outside India. For revenue by location of customers refer note 26.5.
001 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
I n the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:
Revenue from operations
The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from operations:
Determining method to estimate variable consideration and assessing the constraint:- Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
a) Property, plant and equipment
The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the long term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.
The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the
complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 36.
d) Fair value measurement of financial instrument
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
e) Impairment of financial assets
The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. the Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
f) Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.
The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year the Company has done the impairment assessment of non-financial assets and have concluded that there is no impairment in value of nonfinancial assets as appearing in the financial statements.
g) Revenue recognition - Estimating variable consideration for returns and volume rebates
The Company estimates variable considerations to be included in the transaction price for the sale of traded goods (in after-market) with volume rebates.
The Companyâs expected volume rebates are analysed on a per customer basis for contracts that are subject to a single volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customerâs historical rebates entitlement and accumulated purchases to date. The Company applied a statistical model for estimating expected volume rebates for contracts with more than one volume threshold. The model uses the historical purchasing patterns and rebates entitlement of customers to determine the expected rebate percentages and the expected value of the variable consideration. Any significant changes in experience as compared to historical purchasing patterns and rebate entitlements of customers will impact the expected rebate percentages estimated by the Company.
For the purpose of the Companyâs capital management, capital includes issued equity capital, all equity reserves attributable
to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximize the
shareholdersâ value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2025 and March 31, 2024.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Discount rate used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
H FAIR VALUE HIERARCHY
All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.
Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.
The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities.
ESI FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Companyâs principal financial liabilities comprise of trade and other payables, borrowings, lease liabilities, security deposits and payables for property, plant and equipment. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include trade and other receivables, cash, fixed deposits and security deposits that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instrument effected by market risk include loans and borrowings, deposits, FVTOCI instrument.
The sensitivity analyses in the following sections relate to the position as at March 31, 2025 and March 31, 2024.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2025 and March 31, 2024 including the effect of hedge accounting.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs interest bearing financial liabilities includes borrowings with fixed interest rates. The Companyâs fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency).
The Company transacts business in local currency as well as in foreign currency. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.
The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities.
The Companyâs listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs management on a regular basis. The Companyâs Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to listed equity securities at fair value was '' 13,594.51 Lakhs (March 31, 2024: '' 12,624.92 Lakhs). A decrease of 10% on the NSE market index could have an impact of approximately '' 1,359.45 Lakhs (March 31, 2024: '' 1,262.49 Lakhs) on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and other financial instruments.
Customer credit risk is managed by the Company subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivable). The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located and being operated in India.
Further, the Companyâs customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs and dealers. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. The Company is earning revenue of '' 67,710.62 Lakhs (March 31, 2024: '' 56,757.19 Lakhs) in the domestic market from two customers. The following table provides information about the exposure to credit risk and expected credit loss as at March 31, 2025 and March 31, 2024 for trade receivables under the simplified approach.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimized cost.
The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchases of steel & plastic granules which are volatile products and are major component of end product. The prices in these purchase contracts are linked to the price of raw steel & plastic granules and demand supply matrix. However, at present, the Company do not hedge its raw material procurements, as the price of the final product of the Company also vary with the price of underlying commodity which mitigate the risk of price volatility.
45. As at March 31, 2025, investments in equity shares and optionally convertible debentures in the subsidiaries amounted to '' 15,157.30 Lakhs and 28,526.00 Lakhs respectively. Management periodically assesses whether there is an indication that such investments may be impaired. As at March 31, 2025, five subsidiaries of the Company has resulted in the net worth of those subsidiaries being lower than the respective carrying amount of the investment in the Companyâs books. This is an indication of potential impairment of carrying value of the investments. The carrying value of investment in such subsidiaries aggregates to 10,459.38 (including investment in Optionally Convertible Redeemable Debentures). For such investment, where impairment indicators exist, management compares its carrying amount with the recoverable amount. Recoverable amount is value in use of the investment computed based upon discounted projected profitability. As on the reporting date, the recoverable amount, determined by the management is more than the carrying amount and accordingly no adjustments to the carrying amount is required in the books of accounts. Key assumptions underlying the value in use calculation are those regarding expected revenues, a post-tax discount rate of 13.5% per annum. Sales growth projections considers managementsâ expectation of market development, current industry trends and post-tax discount rate based on the relevant risks. 3% growth rate has been used in terminal year. The management believes that any reasonably possible change in the key assumptions would not cause the carrying amount to exceed the recoverable amount of the cash generating unit.
46. Revenue from operations is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customers. In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be claimed/ passed on to the customers, based on various cost parameters like raw material and other costs.
The Company is required to pass on the savings in variable cost from the billed sales price for which the final negotiations with the customer is ongoing and will be settled in near future. The total estimated liabilities outstanding as at March 31, 2025 is '' 177.41 Lakhs (March 31, 2024: '' 1,216.07 Lakhs), which management believes is sufficient to discharge liabilities.
Q9I OTHER STATUTORY INFORMATION
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made there under.
(ii) The Company does not have transactions with struck off companies under section 248 of Companies Act, 2013.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(v) The Company has advanced or loaned or invested funds to the following entity with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
50. The Company was having 14.31% stake in âLumax Ancillary Limited (LAL)â and the investments in LAL had been measured at fair value through OCI. During the earlier year, the Company acquired controlling stake in LAL from the existing shareholders of LAL i.e. promoter group of the Company and other shareholder at a share valuation of '' 275.00 per share, which was approved by the Board of Directors of the Company for acquiring 85.69% stake at an aggregate consideration of '' 4,948.10 Lakhs. Accordingly, LAL became the wholly owned subsidiary of the Company w.e.f. January 25, 2024.
Pursuant to this, the Company has de-recognised its investment in LAL which had been measured at fair value through OCI and accordingly, the fair value gains accumulated as separate component of OCI till the date of transactions amounting to '' 525.73 Lakhs has been reclassified to retained earnings in earlier year. There is no impact in the current year financial statements.
51. The Company uses accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and that has operated throughout the year for all relevant transactions recorded in the software, except that: (a) the audit log at the application level is not maintained in case of modification by certain users with specific access; and (b) no audit trail has been enabled at the database level. During the year, the audit trail feature has not been tempered with. Further, the audit trail, to the extent maintained in the prior year, has been preserved by the Company as per the statutory requirements for record retention.
H EVENT AFTER THE REPORTING DATE
(a) The Board of Directors of the Company has proposed dividend subsequent to the Balance Sheet date, which is subject to shareholderâs approval in forthcoming annual general meeting (Refer note 18.2).
(b) Subsequent to the year ended March 31, 2025, the Board of Directors of the Company in its meeting held on May 16, 2025 has approved acquisition of remaining 25% stake in IAC International Automotive India Private Limited (IAC India) (formerly known as Lumax Integrated Ventures Private Limited), material subsidiary company, at a purchase consideration of '' 22,095.75 Lakhs. The Company on May 22, 2025 has completed this transaction and accordingly, IAC India has become the wholly owned material subsidiary of the Company. There is no impact of this transaction on the standalone financial statements as at March 31, 2025.
These are the notes to the standalone financial statements referred to in our report of even date.
Mar 31, 2024
Q. Provisions and contingent liability General
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the
reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the standalone statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liability Contingent liability is:
a) a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
b) a present obligation that arises from past events but is not recognized because:
- it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
- the amount of the obligation cannot be measured with sufficient reliability.
R. Taxes
Income tax comprises current and deferred tax.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized outside statement of profit and loss is recognized outside statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company shall
reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
(a) When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences;
(b) I n respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:
(a) When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences;
(b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside statement of profit and loss is recognized outside statement of profit and loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
S. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and shortterm deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
T. Earnings per share (EPS)
Basic EPS is calculated by dividing the net profit or loss for the year attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders of the
Company and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
U. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
(a) In the principal market for the asset or liability, or
(b) I n the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
At each reporting date, the management analyzes the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Companyâs accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents, if any.
The management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
⢠Quantitative disclosure of fair value measurement hierarchy
⢠Financial instruments (including those carried at amortized cost)
V. Financial instruments
A financial instrument is a contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.
Financial Assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial assetâs contractual cash flow characteristics and the Companyâs business model for managing them. With the exception of trade receivables that do
not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section âRevenue from contracts with customersâ.
In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are âsolely payments of principal and interest (SPPI)â on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.
The Companyâs business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
a) Financial assets at amortized cost (debt instruments)
b) Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and losses (debt instruments)
c) Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
d) Financial assets at fair value through profit or loss
a) Financial assets at amortized cost
A financial asset is measured at the amortized cost if both the following conditions are met:
(i) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and
(ii) Contractual terms of the asset give rise on specified dates to cash flows that are âsolely payments of principal and interest (SPPI)â on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The accretion of EIR is recorded as an income or expense in statement of profit and loss. The losses arising from impairment are recognized in the statement of profit and loss. This category generally applies to trade and other receivables.
b) Financial assets at FVTOCI (debt instruments)
A âfinancial assetâ is classified as at the FVTOCI if both of the following criteria are met:
(i) Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and losses (debt instruments); and
(ii) The assetâs contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. For debt instruments, at fair value through OCI, interest income, foreign
exchange revaluation and impairment losses or reversals are recognized in the profit or loss and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulative fair value changes recognized in OCI is reclassified from the equity to profit or loss.
c) Financial assets at FVTOCI (equity instruments)
Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under Ind AS 32 âFinancial Instruments: Presentationâ and are not held for trading. The classification is determined on an instrument-by-instrument basis. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVTPL.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the statement of profit and loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.
The Company elected to classify irrevocably its non-listed equity investments under this category.
d) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognized in the statement of profit and loss.
De-recognition
A financial asset (or, where applicable, a part of a financial asset) is primarily derecognized (i.e. removed from the Companyâs standalone balance sheet) when:
(i) The rights to receive cash flows from the asset has expired, or
(ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay
to a third party under a âpass-throughâ arrangement and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade payables, lease liabilities and other payables.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
⢠Financial liabilities at amortized cost
⢠Financial liabilities at fair value through profit or loss (FVTPL)
Financial liabilities at amortized cost Loans and Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortized cost using the ElR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortisation process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the standalone statement of profit and loss.
De-recognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the standalone statement of profit and loss.
Offsetting of financial instruments
Financial assets and liabilities are offset, and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Companyâs senior management determines change in the business model as a result of external or internal changes which are significant to the Companyâs operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following
the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
W. Impairment of financial assets
The Company recognizes an allowance for expected credit losses (ECLs) for financial assets. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
X. Business combination
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the noncontrolling interests in the acquiree at fair value or at the proportionate share of the acquireeâs identifiable net assets. Acquisition-related costs are expensed in the periods in which the costs are
incurred and the services are received.
At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognized at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable.
Business Combinations involving entities or businesses in which all the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and where that control is not transitory is accounted using the pooling of interests method as enumerated below:
⢠The assets and liabilities of the combining entities are reflected at their carrying amounts.
⢠No adjustments are made to reflect fair values or recognize any new assets or liabilities. The only adjustments that are made are to harmonize accounting policies.
⢠The financial information in the financial statements in respect of prior periods should be restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. However, if business combination had occurred after that date, the prior period information shall be restated only from that date.
⢠The identity of the reserves shall be preserved and shall appear in the standalone financial statements of the transferee in the same form in which they appeared in the financial statements of the transferor.
Y. Dividend
The Company recognizes a liability to pay dividend to equity holders of the Company when the distribution is authorized, and the distribution is no longer at the discretion of the Company. As per corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.
2.3 NEW AND AMENDED STANDARDS
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated March 31, 2023 to amend the following Ind AS which are effective for annual periods beginning on or after April 01, 2023:
(i) Definition of Accounting Estimates - Amendments to Ind AS 8
The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.
(ii) Disclosure of Accounting Policies - Amendments to Ind AS 1
The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their âsignificantâ accounting policies with a requirement to disclose their âmaterialâ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the Companyâs disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Companyâs financial statements.
(iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12
The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.
The Company previously recognized for deferred tax on leases on a net basis. As a result of these amendments, the Company has recognized a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. Since, these balances qualify for offset as per the requirements of paragraph 74 of Ind AS 12, there is no impact in the balance sheet. There was also no impact on the opening retained earnings as at April 01, 2022.
18.1 Nature and purpose of reserves
a) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.
b) FVTOCI Reserve
The Company has elected to recognize changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.
c) General reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.
d) Retained Earnings
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
H EVENT AFTER THE REPORTING DATE
i) The Board of Directors of the Company have proposed dividend subsequent to the Balance Sheet date, which is subject to shareholder''s approval in forthcoming annual general meeting (Refer note 18.2).
ii) The Board of Directors of the Company have accorded its consent for proposed merger of Lumax Ancillary Limited into the Company with April 01, 2024 as appointed date.
Q3I SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
I. Judgements
I n the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:
a) Operating lease commitments - Company as lessor
The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on valuation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.
b) Assessment of lease term
I n determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.
c) Revenue from contracts with customers
The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers:
⢠Determining method to estimate variable consideration and assessing the constraint
Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.
II. Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
a) Property, plant and equipment
The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.
b) Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount
and timing of future taxable income. Given the wide range of business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.
c) Gratuity benefit
The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 39.
d) Fair value measurement of financial instrument
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
e) Impairment of financial assets
The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
f) Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.
The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the assets. The value in use for calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year, the Company has done the impairment assessment of non-financial assets and have concluded that there is no impairment in value of non-financial assets as appearing in the financial statements.
g) Lease incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore incremental borrowing rate (IBR) is used to measure lease liability. The IBR is the rate of interest that the Company would have to pay to borrow over similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the right-of-use assets in as similar economic environments. The IBR therefore reflects what the Company âwould have to payâ which requires estimates when no observable rates are available or when they need to be adjusted to reflect the term and conditions of
h) Revenue recognition - Estimating variable consideration for returns and volume rebates
The Company estimates variable considerations to be included in the transaction price for the sale of traded goods (in after-market) with volume rebates.
The Companyâs expected volume rebates are analysed on a per customer basis for contracts that are subject to a single volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customerâs historical rebates entitlement and accumulated purchases to date. The Company applied a statistical model for estimating expected volume rebates for contracts with more than one volume threshold. The model uses the historical purchasing patterns and rebates entitlement of customers to determine the expected rebate percentages and the expected value of the variable consideration. Any significant changes in experience as compared to historical purchasing patterns and rebate entitlements of customers will impact the expected rebate percentages estimated by the Company.
Q4I CAPITAL MANAGEMENT
For the purpose of the Companyâs capital management, capital includes issued equity capital, all equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholdersâ value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. The Company monitors the capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2024 and March 31, 2023.
H FAIR VALUE HIERARCHY
All financial instruments for which fair value is recognized or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.
Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.
Ql FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Companyâs principal financial liabilities comprise of trade and other payables, borrowings, lease liabilities, security deposits and payables for property, plant and equipment. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include trade and other receivables, cash, fixed deposits and security deposits that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instrument effected by market risk include loans and borrowings, deposits, FVTOCI instruments.
The sensitivity analyses in the following sections relate to the position as at March 31, 2024 and March 31, 2023.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2024 and March 31, 2023 including the effect of hedge accounting.
(iii) Equity price risk
The Companyâs listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs management on a regular basis. The Companyâs Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to listed equity securities at fair value was '' 12,624.92 Lakhs (March 31, 2023: '' 9,313.35 Lakhs). A decrease of 10% on the NSE market index could have an impact of approximately '' 1,262.49 Lakhs
(March 31, 2023: '' 931.33 Lakhs) on the OCI / Profit or Loss and equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI / Profit or Loss and equity.
At the reporting date, the exposure to unlisted equity securities at fair value was '' 122.56 Lakhs (March 31, 2023: '' 1,125.24 Lakhs). A decrease of 10% in fair value could have an impact of approximately '' 12.26 Lakhs (March 31, 2023: '' 112.52 Lakhs) on the OCI and equity attributable to the Company. An increase of 10% in the value of these securities would also impact OCI and equity.
B. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and other financial instruments.
Trade receivables
Customer credit risk is managed by the Company subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivables). The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located and being operated in India. Further, the Companyâs customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs and dealers. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. Hence, no adjustment has been made on account of Expected Credit Loss (ECL).
C. Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimised cost.
D. Commodity risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchases of steel & plastic granules which are volatile products and are major components of end product. The prices in these purchase contracts are linked to the price of raw steel & plastic granules and demand supply matrix. However, at present, the Company do not hedge its raw material procurements, as the price of the final product of the Company also vary with the price of underlying commodity which mitigate the risk of price volatility.
48. The management has analysed that no significant warranty claim is received by the Company in earlier years against the goods manufactured by the Company and further, the seller of traded goods warrants the Company that products will be free from defects in materials and workmanship under normal use and service and agrees to replace any defective parts under the conditions of standard warranty accompanying the products. Therefore, the Company has not made any provision for warranties and claims in its books of accounts for the year ended March 31, 2024.
49. Revenue from contracts with customers is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customers. In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be claimed/ passed on to the customers, based on various cost parameters like raw material and other costs.
The Company is required to pass on the savings in variable cost from the billed sales price for which the final negotiations with the customer is ongoing and will be settled in near future. The total estimated liabilities outstanding as at March 31, 2024 is '' 1,216.07 Lakhs (March 31, 2023: '' 2,404.62 Lakhs), which management believes is sufficient to discharge liabilities.
50. The Company uses accounting software SAP HANA for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has been operational throughout the year for all relevant transactions recorded in the software, except that audit trail feature is not enabled at the database level for certain changes made using privileged/ administrative access rights to the SAP HANA applications. The Company is in the process of enabling the audit trail feature completely.
H OTHER STATUTORY INFORMATION
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.
(ii) The Company does not have transactions with struck off companies under section 248 of Companies Act, 2013.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
OOI SCHEME OF ARRANGEMENT (THE âSCHEMEâ)
During the previous year i.e. On May 03, 2022, the Company had filed the Scheme of Amalgamation and Merger (âSchemeâ) with Honâble National Company Law Tribunal, New Delhi Bench (NCLT) of its wholly owned subsidiary Lumax Mettalics Private Limited (transferor) with the Company for efficient utilization & synergy of resources. The aforesaid scheme, inter-alia envisaged merger of the transferor company into the Company. The Scheme was approved by NCLT on March 01, 2023. Consequent to the amalgamation and merger prescribed by the Scheme, all the assets and liabilities of the transferor were transferred to and vested in the Company with effect from April 01, 2022 (âthe Appointed Dateâ). The amalgamation was accounted under the âpooling of interestâ method prescribed under Ind AS 103 - âBusiness Combinationsâ, as prescribed by the Scheme. Accordingly all the assets, liabilities and other reserves of the transferor Company as on April 01, 2022 were transferred to the Company as per the Scheme. As prescribed by the Scheme, no consideration was paid, as the transferor Company is a wholly owned subsidiary of the Company.
55. The Company was having 14.31% stake in âLumax Ancillary Limited (LAL)â and the investments in LAL had been measured at fair value through OCI. During the year, the Company has acquired controlling stake in LAL from the existing shareholders of LAL i.e. promoter group of the Company and other shareholder at a share valuation of '' 275.00 per share, which has been approved by the Board of Directors of the Company for acquiring 85.69% stake at an aggregate consideration of '' 4,948.10 Lakhs. Accordingly, LAL has now become the wholly owned subsidiary of the Company w.e.f. January 25, 2024. Pursuant to this, the Company has de-recognized its investment in LAL which had been measured at fair value through OCI and accordingly, the fair value gains accumulated as separate component of OCI till the date of transactions amounting to '' 525.73 Lakhs has been reclassified to retained earnings.
56. The Companyâs business activity falls within a single business segment i.e. manufacturing and trading of automotive components, accordingly there are no additional disclosures to be furnished in accordance with the requirement of Ind AS 108 âOperating Segmentsâ with respect to single reportable segment. Further, the operations of the Company is domiciled in India and therefore there are no reportable geographical segment.
As per our report of even date For and on behalf of the Board of Directors of
S.R. Batliboi & Co. LLP Lumax Auto Technologies Limited
Chartered Accountants CIN L31909DL1981PLC349793
ICAI Firm Registration No. 301003E/E300005
per Amit Yadav D.K. Jain Anmol Jain
Partner Chairman Managing Director
Membership No. 501753 DIN: 00085848 DIN: 00004993
Vikas Marwah Ashish Dubey Pankaj Mahendru
Chief Executive Officer Chief Financial Officer Company Secretary
Membership No. A28161
Place : New Delhi Place : Gurugram
Date : May 27, 2024 Date : May 27, 2024
Mar 31, 2023
(vi) The Company had total cash outflows for leases of '' 595.75 Lakhs for the year ended March 31, 2023 (March 31, 2022 '' 509.38 Lakhs).
(vii) Extension and termination options : Extension and termination options are included in property lease agreements. These are used to maximize operational flexibility in terms of managing the assets used in the Companyâs operations. Extension and termination options held are exercisable only by the Company and not by the lessor.
(viii) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
(ix) Refer note 47C for maturity analysis of contractual undiscounted cashflows in respect of lease recognized under Ind AS 116.
âDuring the previous year, a Subsidiary Company of Lumax Integrated Ventures Private Limited (LIVE) was voluntarily strike off and during currnet year a Joint Venture Company of LIVE was under process of voluntary liquidation (liquidated before board meeting date) with National Company Law Tribunal (NCLT). Accordingly, the Investment made by LIVE in these Companies has been considered impaired of '' 24.11 Lakhs (March 31, 2022: '' 22.64 Lakhs)
"Optionally convertible redeemable debentures (OCRD) are convertible at the option of the issuer of the instrument and the coupon rate is 0.01%. At the expiry of 10 years, each OCRD shall be mandatorily converted i nto 1 equity share. However, LIVE (issuer) may, at any time prior to expiry of 10 years convert the OCRDs in the ratio of 1:1 (i.e. one (1) equity share for each OCRD issued by LIVE) or redeem the OCRDs at the fair market value or at par value, whichever is higher. The resulting shares upon conversion shall rank pari-passu in all respect with the existing equity shares. Accordingly, OCRDs has been classified as an equity instrument both in books of issuer and holder.
During the year, wholly-owned subsidiary company Lumax Mettalics Private Limited has been merged with the Company with appointed date as April 01, 2022 (Refer note 54). Accordingly, the investment in this subsidiary company and figures for the corresponding year have been restated.
âInvestment in equity instrument where the business model of the Company is not for trading, the Company has opted for irrevocable option to present subsequent changes in the fair value of an investment in an equity instrument through Other Comprehensive income (FVTOCI).
"Investment in current investments, the Company has opted irrevocable option to present subsequent changes in the fair value of an investment in an financial instrument through profit or loss (FVTPL).
c) No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Further no trade or other receivable are due from firms or private companies in which any director is a partner, a director or a member.
d) Trade receivables are non-interest bearing and are generally on terms of not more than 30-120 days.
e) For terms and conditions relating to related party receivables, refer Note 41.
d) Terms/ rights attached to equity shares:
The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity is entitled to one vote per share.
The Company declares and pays dividends in Indian rupees. The dividend, if proposed by the Board of Directors, is subject to the approval of the shareholders in the Annual General Meeting.
In the event of liquidation, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of any preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
g) The Company does not have any equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.
18.1 Nature and purpose of reserves
a) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.
b) FVTOCI Reserve
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.
c) General reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
e) Capital reserve
Capital reserve are the reserve created for gain on bargain purchase related to business combinations.
*Term loan amounting '' 7,140.24 Lakhs (after netting off '' 359.76 Lakhs outstanding upfront fees to be charged off over the period of loan through Effective Interest Rate (EIR) method) (March 31, 2022: NIL) from banks carrying interest @ 8.85% per annum are secured by way of first pari pasu equitable/registered mortgage charge on immovable properties of the Company both present and future. This loan is repayable in equal quarterly installment of '' 375 Lakhs each over a period of five years after one year of moratorium from the date of availment.
**Term loan amounting '' 4,779.68 Lakhs (after netting off '' 220.32 Lakhs outstanding upfront fees to be charged off over the period of loan through Effective Interest Rate (EIR) method) (March 31, 2022: NIL) from financial institution carrying interest @ 9.60% per annum are secured by way of first and exclusive charge in favour of the security trustee (inter se first pari pasu charge with Kotak Mahindra Bank Limited) (by way of registered/equitable mortgage) on identified land and building and structures thereon of the immovable assets and by way of hypothecation on all the moveable fixed assets of the Company, both present and future. This loan is repayable in equal quarterly installment of '' 250 Lakhs each over a period of five years after one year of moratorium from the date of availment.
#Vehicle loan amounting '' 521.03 Lakhs (March 31, 2022: '' 44.02 Lakhs) from banks carrying interest @ 7.60%-8.85% per annum are secured by way of hypothecation of the respective vehicles acquired out of proceeds thereof. These loans are repayable over a period of thirty nine months from the date of availment.
âWorking capital demand loan '' 8,500 Lakhs (March 31, 2022: '' 6,000 Lakhs) from Bank is repayable in 90-180 days from respective drawdown and carries interest @ 4.40% to 8.85% per annum, secured by way of Pari-passu first charge on entire current assets of the Company both present and future.
âWorking capital demand loan '' 1,500 Lakhs (March 31, 2022: '' NIL) from financial institution is repayable in 90-180 days from respective drawdown and carries interest @ 5.75% to 8.05% per annum secured against the first pari pasu charge on current assets of the Company.
âWorking capital demand loan '' 1,300 Lakhs (March 31, 2022: '' 1,500 Lakhs) from financial institution is repayable in 90-180 days from respective drawdown and carries interest @ 5.75% to 8.25% per annum secured against the exclusive charge on current and moveable fixed assets of the Company.
ââWorking capital demand loan '' 2,000 Lakhs (March 31, 2022: '' 2,000 Lakhs) from Bank is repayable in 90-180 days from respective drawdown and carries interest @ 5.25% to 9.25% per annum, unsecured.
âââCash Credit '' 112.62 Lakhs (March 31, 2022: NIL) secured by way of Pari-passu charge on stocks and book debts of the Company and carries interest @ 6.50% to 9.00% per annum.
Undrawn committed borrowing facility
The Company has availed fund based and non fund based working capital limits amounting to '' 24,200.00 Lakhs (March 31, 2022: '' 22,200.00 Lakhs) from banks and financial institutions. An amount of '' 10,228.67 Lakhs remain undrawn as at March 31, 2023 (March 31, 2022: '' 12,153.32 Lakhs).
The Company has satisfied all debt covenants prescribed in the terms of loans.
The Company has not defaulted on any loans payable.
The Company have not been declared wilful defaulter by any bank or financial institutions or government or any government authority.
The Company has been sanctioned working capital limit in excess or '' 500 Lakhs in aggregate from banks and financial institutions during the year on the basis of security or current assets of the Company. The quarterly returns/statements filed by the Company with such banks are in agreement with the books of accounts of the Company.
Term loans have been applied for the purpose for which they were obtained.
Terms and conditions of the above financial liabilities:
- Trade payables are non-interest bearing and are normally settled on 30 to 90 day terms.
For explanations on the Companyâs credit risk management processes, refer note 47.
For terms and conditions with related parties, refer to Note 41.
a) Information as required to be furnished as per Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended March 31, 2023 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.
"Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. Accordingly, the Company has transferred '' 1.67 Lakhs during the current year (March 31, 2022: '' 1.54 Lakhs) to the Investor Education and Protection Fund.
#Represents liabilities towards incentives/discounts payable to dealers of the Company.
The performance obligation is satisfied upon delivery of the goods to the customer and payment is generally due within 30 to 120 days from delivery.
The performance obligation is satisfied over time and payment is generally due upon completion of service as per the contract with customers.
The Code on Social Security 2020 (Code), which received the Presidential Assent on September 28, 2020, subsumes nine laws relating to social security, retirement and employee benefits, including the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972. The effective date of the Code is yet to be notified and related rules are yet to be framed. The impact of the change, if any, will be assessed and recognized post notification of the relevant provisions.
a) Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. Basic and diluted EPS are same as there are no convertible financial instruments outstanding as on March 31, 2023
c) There has not been any transactions involving equity shares or potential equity shares between the reporting date and the date of authorization of these standalone financial statements.
38. During the current year, the Company (through one of its subsidiary companies Lumax Integrated Ventures Private Limited âLIVEâ) has acquired 75% stake in IAC International Automotive India Private Limited (IAC India). For this acquisition, the Company borrowed '' 12,500 Lakhs from banks/financial institutions and invested '' 18,500 Lakhs in LIVE in the form of Optionally Convertible Redeameable Debentures. Exceptional item amounting '' 880 Lakhs for the year ended March 31, 2023 represents certain transaction cost related to the acquisition of stake in IAC India.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. The scheme is funded with an insurance company in the form of qualifying insurance policy.
E3| COMMITMENTS AND CONTINGENCIES
a) Capital and other commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for:
Capital commitments are '' 274.05 Lakhs (As at March 31, 2022''1,862.27 Lakhs), net of advances.
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(b) |
Contingent liabilities |
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As at |
As at |
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March 31, 2023 |
March 31, 2022 |
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Claims against the Company not acknowledged as debts |
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Demand from Employee State Insurance Department |
0.90 |
0.90 |
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The Company received income tax order under Section 143(3) dated December 30, 2019 related to A.Y. 2018-19 on account of search and seizure operation for which Company had received demand of '' 1,033.28 Lakhs including interest u/s 234ABC in respect of above matter for which the Company had filed the appeal to income tax authorities. During the previous year, the Company has received a favorable order in this regard from CIT(A) and the department has filed an appeal against the said order of CIT(A). The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts. |
1,033.28 |
1,033.28 |
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During the earlier year, the Company received demand cum show cause notice from the Indirect Tax department alleged that the Company availed the duty drawback on the basis of unrealized sale proceeds. The Company filed the reply to the assistant commissioner of customs Inland Container Depot (ICD), Tughlakabad, dated February 07, 2020 against the above show cause notice and the response is awaited as on date. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts. |
19.24 |
19.24 |
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During the earlier year, the Company has received show cause notice dated June 08, 2020 from the Indirect tax department alleged that the Company has availed the Excise Duty of '' 32.14 Lakhs on amortization of Drawing & Design sent by one of the customer of the Company on FOC basis. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts. |
32.14 |
32.14 |
(c) The Company entered into an agreement with the Bhosari Unit Workmen Union on September 13, 2003, vide which option for VRS was given to the workers of the Company. Accordingly, benefits under the said scheme were paid to 27 workmen who opted for the scheme. Out of these 27 workmen, 20 workmen later filed a case against the Company on the grounds of Unfair Labour Practices at the Labour court. The Court has passed an order in the favour of the workmen on June 26, 2019. Further, the Company has challenged the said order and filed revision application dated July 26, 2019 in the Industrial Court, Pune on the grounds that the said order is defective and bad at law. Out of those 20 cases, the matter has been decided by the Industrial court in favour of the Company for 17 cases vide order dated March 28, 2022. For remaining 3 cases, the Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts.
(d) In regard to the bill discounting of invoices with bank by one of the Companyâs vendor (Transporter), the bank had filed an application under Section 19 of the Recovery of Debts due to Banks and Financial Institution Act, 1993 before the Ld. DRT-II, Chandigarh for recovery of '' 999.76 Lakhs and interest thereon @ 13.75% p.a. from Company, vendor and other parties. The Company and other parties including vendor has received an order dated February 25, 2019 from Debts Recovery Tribunal- II, Chandigarh for demanding the above amount jointly and severally. The Company has filed an appeal before Debt Recovery Appellate Tribunal (DRAT) dated March 13, 2020 against '' 782.24 Lakhs (decretal amount to which the Company is a defendant party) along with interest 13.75% p.a. and deposited 50% of decretal amount in previous/earlier years. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts.
(e) During the year ended March 31, 2023 the Company has provided corporate guarantee to financial institutions against loan taken by one of the subsidiary companies âLumax Integrated Ventures Private Limitedâ amounting '' 25,000 Lakhs (March 31, 2022: Nil).
H EVENT AFTER THE REPORTING DATE
The Board of Directors of the Company has proposed dividend subsequent to the Balance Sheet date, which is subject to shareholderâs approval in forthcoming annual general meeting (Refer note 18.2).
j| SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:
a) Operating lease commitments - Company as lessor
The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an valuation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.
c) Revenue from contracts with customers
The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers:
⢠Determining method to estimate variable consideration and assessing the constraint
Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/ purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
a) Property, plant and equipment
The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the longterm nature and complexity
of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.
The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 39.
d) Fair value measurement of financial instrument
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
e) Impairment of financial assets
The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. the Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
f) Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.
The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year the Company has done the impairment assessment of non-financial assets and have concluded that there is no impairment in value of non-financial assets as appearing in the financial statements.
g) Lease incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore its Incremental Borrowing Rate (IBR) is used to measure lease liability. The IBR is the rate of interest that the Company would have to pay to borrow over similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the Right-to-use assets
in as similar economic environments. The IBR therefore effects what the Company âwould have to payâ which requires estimates when no observable rates are available or when they need to be adjusted to reflect the term and conditions of the lease. The Company estimates the IBR using observable inputs such as market interest rates when available.
h) Revenue recognition - Estimating variable consideration for returns and volume rebates
The Company estimates variable considerations to be included in the transaction price for the sale of traded goods (in after-market) with volume rebates.
The Companyâs expected volume rebates are analyzed on a per customer basis for contracts that are subject to a single volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customerâs historical rebates entitlement and accumulated purchases to date. The Company applied a statistical model for estimating expected volume rebates for contracts with more than one volume threshold. The model uses the historical purchasing patterns and rebates entitlement of customers to determine the expected rebate percentages and the expected value of the variable consideration. Any significant changes in experience as compared to historical purchasing patterns and rebate entitlements of customers will impact the expected rebate percentages estimated by the Company.
For the purpose of the Companyâs capital management, capital includes issued equity capital, all equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximize the shareholdersâ value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. The Company monitors capital using geraing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2023 and March 31, 2022.
Q6I FAIR VALUE HIERARCHY
All financial instruments for which fair value is recognized or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.
Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.
The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities.
| FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Companyâs principal financial liabilities comprise of trade and other payables, borrowings, lease liabilities, security deposits and payables for property, plant and equipment. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include trade and other receivables, cash, fixed deposits and security deposits that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instrument effected by market risk include loans and borrowings, deposits, FVTOCI instrument.
The sensitivity analyzes in the following sections relate to the position as at March 31, 2023 and March 31, 2022.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022 including the effect of hedge accounting.
(i) Interest rate risk
I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs interest bearing financial liabilities includes borrowings with fixed interest rates.
The Companyâs fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
Interest rate risk exposure
The Companyâs variable rate borrowing is subject to interest rate fluctuations. Below is the overall exposure of the borrowing.
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency).
The Company transacts business in local currency as well as in foreign currency. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives.
The Companyâs listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs management on a regular basis. The Companyâs Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to listed equity securities at fair value was '' 9,313.35 Lakhs. A decrease of 10% on the NSE market index could have an impact of approximately '' 931.33 Lakhs on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.
At the reporting date, the exposure to unlisted equity securities at fair value was '' 1,125.24 Lakhs. A decrease of 10% in fair value could have an impact of approximately '' 112.52 Lakhs on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and other financial instruments.
Customer credit risk is managed by the Company subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivable). The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located and being operated in India. Further, the Companyâs customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs and dealers. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. Hence, no adjustment has been made on account of Expected Credit Loss (ECL).
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimised cost.
The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchases of steel & plastic granuals which are volatile products and are major component of end product. The prices in these purchase contracts are linked to the price of raw steel & plastic grannuals and demand supply matrix. However, at present, the Company do not hedge its raw material procurements, as the price of the final product of the Company also vary with the price of underlying commodity which mitigate the risk of price volatility.
48. The management has analyzed that no significant warranty claim is received by the Company in earlier years against the goods manufactured by the Company and further, the seller of traded goods warrants the Company that products will be free from defects in materials and workmanship under normal use and service and agrees to replace any defective parts under the conditions of standard warranty accompanying the products. Therefore, the Company has not made any provision for warranties and claims in its books of accounts for the year ended March 31, 2023.
49. Revenue from contracts with customers is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customer In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be claimed/ passed on to the customers, based on various cost parameters like raw material and other costs.
The Company is required to pass on the savings in variable cost from the billed sales price for which the final negotiations with the customer is ongoing and will be settled in near future. The total estimated liabilities outstanding as at March 31, 2023 is '' 2,404.62 Lakhs (March 31, 2022: '' 3,064.67 Lakhs), which management believes is sufficient to discharge liabilities.
50. During the previous year, the Company amended the joint venture agreement with âLumax Ituran Telematics Private Limited (LITPL)â, wherein the casting vote has been given to the Chairman of the LITPL appointed by the Company. By virtue of this, the Company has acquired management control of LITPL and therefore, LITPL has become subsidiary of the Company w.e.f. January 01, 2022.
H OTHER STATUTORY INFORMATION
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made there under.
(ii) The Company does not have transactions with struck off companies.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
| SCHEME OF ARRANGEMENT (THE âSCHEMEâ)
On May 03, 2022, the Company had filed the Scheme of Amalgamation and Merger (âSchemeâ) with Honâble National Company Law Tribunal, New Delhi Bench (NCLT) of its wholly owned subsidiary Lumax Mettalics Private Limited (transferor) with the Company for efficient utilization & synergy of resources. The aforesaid scheme, inter-alia envisaged merger of the transferor into the Company. The Scheme was approved by NCLT on March 01, 2023. Consequent to the amalgamation and merger prescribed by the Scheme, all the assets and liabilities of the transferor were transferred to and vested in the Company with effect from April 01, 2022 (âthe Appointed Dateâ). The amalgamation was accounted under the âpooling of interestâ method prescribed under Ind AS 103 - Business Combinations, as prescribed by the Scheme. Accordingly all the assets, liabilities, and other reserves of the transferor as on April 01, 2022 were transferred to the Company as per the Scheme. As prescribed by the Scheme, no consideration was paid as the transferor is a wholly owned subsidiary of the Company. Previous year figures have been restated to give effect to the above merger in comparative years reported.
⢠All the assets, rights, power, liabilities and duties of the Transferor Company vested / transferred in the Transferee Company as going concern from the appointed date and the Transferor Company was dissolved without the process of winding up;
⢠The identity of reserves of the Transferor Company is incorporated in the books of the Transferee Company in the same form as they appeared in the financial statements prior to the Scheme coming into effect;
⢠The carrying value of investment held by the Transferee Company in equity of the Transferor Company is cancelled and the amount of investment is reduced by the book value of net assets of the Transferor Company as reduced by reserves accounted for in accordance with the Scheme. Since the Transferor Company was wholly owned subsidiaries of Transferee Company, no shares have been issued as a consideration of the amalgamation; and
⢠The inter-company balances between the Transferee Company and the Transferor Company, appearing in the books of the Transferee Company have been eliminated.
Accordingly, all the debts, liabilities, duties and obligations present and future pertaining to the Transferor Company transferred
and vested in the Transferee Company.
Further in accordance with the scheme, the authorised share capital of the Company has been increased by merging the
authorised share capital of transferor Company, resulting in increase in authorised equity share capital by '' 1,000 Lakhs.
Accordingly, the Authorized Capital of the Company post merger stands to '' 4,610 Lakhs divided into 2,305 Lakhs equity
Shares of '' 2/- each.
The Scheme will benefit both, the Transferor Company and Transferee Company. The rational and reasons for the
Scheme, inter alia are summarized below:
⢠Better, efficient and economical management, cost savings, pooling of resources, reduction of corporate tiers, creating better synergy, optimum utilization of resources, rationalization of administrative expenses/services, control and running of businesses and further development and growth of the business;
⢠Enable pooling of financial, commercial and other resources and considerable synergy of operations would be achieved from business and administrative point of view and conserve administrative resources and cost overheads; and
⢠To achieve better financial and business prospects.
55. The Companyâs business activity falls within a single business segment i.e. manufacturing and trading of Automotive Components and therefore, segment reporting in terms of Ind AS 108 on Segmental Reporting is not applicable.
Mar 31, 2022
18.1 Nature and purpose of reservesa) Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.
The Company has elected to recognize changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.
* Working capital demand loan '' 6,000 Lakhs (March 31, 2021: '' 1,000 Lakhs) from Bank is repayable in 180 days from respective drawdown and carries interest @ 4.40% to 5.25% per annum, secured by way of Pari-passu first charge on entire current assets of the Company both present and future.
* Working capital demand loan '' Nil (March 31, 2021: '' 1,000 Lakhs) from financial institution is repayable in 180 days from respective drawdown and carried interest @ 6.90% per annum, secured by way of pari- passu charged over the current assets of the Company.
** Working capital demand loan '' 2,000 Lakhs (March 31, 2021: '' 1,000 Lakhs) from Bank is repayable in 180 days from respective drawdown and carries interest @ 4.40% to 5.25% per annum, unsecured.
*** Cash Credit '' Nil (March 31, 2021: '' 483.70 Lakhs) secured by way of Pari-passu first charge of hypothecation on entire stocks consisting of raw material, work in progress and finished goods kept at Companyâs godown, factories and book debts along with receivables of the Company, both present and future and carried Interest @ 7.50% per annum.
The Company has been sanctioned working capital limit in excess of '' 500 Lakhs in aggregate from banks/financial institutions during the year on the basis of security of current assets of the Company. The quarterly returns/statements filed by the Company with such banks/financial institutions are in agreement with the books of accounts of the Company.
Undrawn committed borrowing facility
The Company has availed fund based and non fund based working capital limits amounting to '' 20,200.00 Lakhs (March 31,
2021 : '' 14,100.00 Lakhs) from banks and financial institutions. An amount of '' 11,653.32 Lakhs remain undrawn as at March 31,
2022 (March 31, 2021 : '' 10,267.33 Lakhs).
The Company has satisfied all debt covenants prescribed in the terms of bank loans. The other loans do not carry any debt covenant. The Company has not defaulted on any loans payable.
The Company have not been declared wilful defaulter by any bank or financial institutions or government or any government authority.
Terms and conditions of the above financial liabilities:
- Trade payables & Other payables are non-interest bearing and are normally settled on 30 to 90 day terms For explanations on the Companyâs credit risk management processes, refer note 47.
For terms and conditions with related parties, refer to Note 41
The Code on Social Security 2020 (Code), which received the Presidential Assent on September 28, 2020, subsumes nine laws relating to social security, retirement and employee benefits, including the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972. The effective date of the Code is yet to be notified and related rules are yet to be framed. The impact of the change, if any, will be assessed and recognized post notification of the relevant provisions.
39| GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. The scheme is funded with an insurance company in the form of qualifying insurance policy.
40| COMMITMENTS AND CONTINGENCIES
a) Capital and other commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for:
Capital commitments are '' 1,786.59 Lakhs (As at March 31, 2021''181.29 Lakhs), net of advances.
(b) Contingent liabilities
|
As at march 31, 2022 |
As at march 31, 2021 |
|
|
claims against the company not acknowledged as debts |
||
|
In respect of A.Y. 2015 - 16, the assessing officer has added to the income of the Company, a notional amount of disallowance under Rule 14A of the Income tax act, 1961 amounting to '' 8.11 Lakhs against which demand raised against the same amounting to '' 2.76 Lakhs. The Company had preferred an appeal with Commissioner of Income Tax (Appeals) CIT(A) against the same and got rejected and further the Company filled appeal with Income Tax Appellate Tribunal (ITAT). During the year, the Company has received a favourable ITAT order. |
2.76 |
|
|
Demand from Employee State Insurance Department |
0.90 |
0.90 |
|
The Company received income tax order under Section 143(3) dated December 30, 2019 related to A.Y. 2018-19 on account of search and seizure operation for which Company had received demand of '' 1,033.28 Lakhs including interest u/s 234ABC in respect of above matter for which the Company had filed the appeal to income tax authorities. During the current year, the Company has received a favorable order in this regard from CIT(A) and the department has filed an appeal against the said order of CIT(A). The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts. |
1,033.28 |
1,033.28 |
|
During the earlier year, the Company received demand cum show cause notice from the Indirect Tax department alleged that the Company availed the duty drawback on the basis of unrealized sale proceeds The Company filed the reply to the assistant commissioner of customs Inland Container Depot (ICD), Tughlakabad, dated February 07, 2020 against the above show cause notice and the response is awaited as on date. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts. |
19.24 |
19.24 |
|
During the previous year, the Company has received show cause notice dated June 08, 2020 from the Indirect tax department alleged that the Company has availed the Excise Duty of '' 32.14 Lakhs on amortization of Drawing & Design sent by one of the customer of the Company on FOC basis. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts. |
32.14 |
32.14 |
(c) The Company entered into an agreement with the Bhosari Unit Workmen Union on September 13, 2003, vide which option for VRS was given to the workers of the Company. Accordingly, benefits under the said scheme were paid to 27 workmen who opted for the scheme. Out of these 27 workmen, 20 workmen later filed a case against the Company on the grounds of Unfair Labor Practices at the Labor court. The Court has passed an order in the favor of the workmen on June 26, 2019. Further, the Company has challenged the said order and filed revision application dated July 26, 2019 in the Industrial Court, Pune on the grounds that the said order is defective and bad at law. Out of those 20 cases, the matter has been decided by the Industrial court in favor of the Company for 17 cases vide order dated March 28, 2022. For remaining 3 cases, the Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.
(d) In regard to the bill discounting of invoices with bank by one of Companyâs vendor (Transporter), the bank had filed an application under Section 19 of the âRecovery of Debts due to Banks and Financial Institution Act, 1993â before the Ld. DRT-II, Chandigarh for recovery of '' 999.76 Lakhs and interest thereon @ 13.75% p.a. from the Company, vendor and other parties. The Company and other parties including vendor has received an order dated February 25, 2019 from Debts Recovery Tribunal- II, Chandigarh for demanding the above amount jointly and severally. The Company has filed an appeal before Debt Recovery Appellate Tribunal (DRAT) dated March 13, 2020 against '' 782.24 Lakhs (decretal amount to which the Company is a defendant party) along with interest 13.75% p.a. and deposited 25% of decretal amount in current year in addition to the 25% already deposited in previous year. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.
42| EVENT AFTER THE REPORTING DATE
a) The Board of Directors of the Company has proposed dividend @ 175% i.e. '' 3.5 per equity share of face value of '' 2 each (March 31, 2021 @ 150% i.e. '' 3 per equity share of face value of '' 2 each) which is subject to shareholderâs approval in forthcoming annual general meeting.
b) On May 03, 2022, the Company has filed the Draft Scheme of merger with National Company Law Tribunal (NCLT) of its 100% subsidiary âLumax Mettalics Private Limitedâ with the Company for efficient utilization & synergy of resources. The Appointed date of Merger will be April 01, 2022 subject to necessary regulatory approvals.
43| SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Judgements
In the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:
a) Operating lease commitments - Company as lessor
The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an valuation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.
b) Assessment of lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.
c) Revenue from contracts with customers
The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers:
⢠Determining method to estimate variable consideration and assessing the constraint
Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
a) Property, plant and equipment
The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the longterm nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.
The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 39.
d) Fair value measurement of financial instrument
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
e) Impairment of financial assets
The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. the Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
f) Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.
The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year the Company has done the impairment assessment of non-financial assets and have concluded that there is no impairment in value of non-financial assets as appearing in the financial statements.
g) Lease incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore its incremental borrowing rate (IBR) to measure lease liability. The IBR is the rate of interest that the Company would have to pay to borrow over similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the right of use assets in as similar economic environments. The IBR therefore effects what the Company âwould have to payâ which requires estimates when no observable rates are available or when they need to be adjusted to reflect the term and conditions of the lease. The Company estimates the IBR using observable inputs such as market interest rates when available.
44| CAPITAL MANAGEMENT
For the purpose of the Companyâs capital management, capital includes issued equity capital, all equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximize the shareholdersâ value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2022 and March 31, 2021.
Discount rate used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.
Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.
The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities.
4t| financial risk management objectives and policies
The Companyâs principal financial liabilities comprise of trade and other payables, borrowings, security deposits and payables for property, plant and equipment. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include trade and other receivables, cash, fixed deposits and security deposits that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instrument effected by market risk include loans and borrowings, deposits, FVTOCI instrument.
The sensitivity analyses in the following sections relate to the position as at March 31, 2022 and March 31, 2021.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2022 and March 31, 2021 including the effect of hedge accounting.
I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs interest bearing financial liabilities includes borrowings with fixed interest rates.
The Companyâs fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency).
The Company transacts business in local currency as well as in foreign currency. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk
The Companyâs listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis. The Companies Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to listed equity securities at fair value was '' 4,648.35 Lakhs. A decrease of 10% on the NSE market index could have an impact of approximately '' 464.84 Lakhs on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by Company subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivable). The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
Further, the Companyâs customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. Hence, no adjustment has been made on account of Expected Credit Loss (ECL).
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimized cost.
48. The management has analyzed that no significant warranty claim is received by the Company in earlier years against the goods manufactured by the Company and further, the seller of traded goods warrants the Company that products will be free from defects in materials and workmanship under normal use and service and agrees to replace any defective parts under the conditions of standard warranty accompanying the products. Therefore, the Company has not made any provision for warranties and claims in its books of accounts for the year ended March 31, 2022.
49. Revenue from contracts with customers is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customers. In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be claimed/ passed on to the customers, based on various cost parameters like raw material and other costs. The Company is required to pass on the savings in variable cost from the billed sales price for which the final negotiations with the customer is ongoing and will be settled in near future. The total estimated liabilities outstanding as at March 31, 2022 is '' 3,064.67 Lakhs (March 31, 2021: '' 2,832.89 Lakhs), which management believes is sufficient to discharge liabilities.
50. During the year, the Company has amended the joint venture agreement with one of the joint venture partner of âLumax Ituran Telematics Private Limited (LITPL)â, wherein the casting vote has been given to the Chairman of the LITPL appointed by the Company. By virtue of this, the Company has acquired management control of LITPL and therefore, LITPL has become subsidiary of the Company w.e.f. January 01, 2022.
53| OTHER STATUTORY INFORMATION
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company do not have transactions with struck off companies.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
54. The Companyâs business activity falls within a single business segment i.e. manufacturing and trading of Automotive Components and therefore, segment reporting in terms of Ind AS 108 on Segmental Reporting is not applicable.
55. Consequent to the uncertainties caused due to continuation of pandemic, the Company has prepared a cash flow projections and also assessed the recoverability of receivables, inventories, other financial & non-financial assets and factored assumptions used in annual impairment testing of fixed assets. On the basis of this evaluation and current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets and does not anticipate any impairment to these financial & non financial assets. The situation is changing rapidly giving rise to inherent uncertainty around the extent and timing of the potential future spread of the COVID-19. However, the Company will continue to closely monitor any material changes to future economic conditions, required, if any.
Mar 31, 2018
1. Corporate information
Lumax Auto Technologies Limited (âthe Companyâ) is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office of the company is located at Plot No. 70, Sector -10 PCNTDA, Bhosari, Pune, Maharashtra.
The Company is principally engaged in the manufacturing of automotive components. Information on the Companyâs structure is provided in Note 35. Information on other related party relationships of the Company is provided in Note 40.
The financial statements were authorised for issue in accordance with a resolution of the directors on May 28, 2018.
2 Significant accounting policies
2.1 Basis of Preparation
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).
For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).
These financial statements for the year ended March 31, 2018 are the first the Company has prepared in accordance with Ind AS. Refer to note 49 for information on how the Company adopted Ind AS.
The financial statements have been prepared on a historical cost basis, except for the financial assets and liabilities which have been measured at fair value or revalued amount.
2.2 Significant accounting judgements, estimates and assumptions
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
2.2.1 Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
a) Defined benefit plans
The present value of the gratuity is determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.
b) Property, plant and equipment
Refer note 2.2(c) for the estimated useful life of property, plant and equipment. The carrying value of property, plant and equipment has been disclosed in note 3(a).
During the year the Company has made re-assessment of the estimated useful life of the property plant and equipmentâs, there has been a change in useful life of certain class of property plant and equipmentâs under plant and Machineries from existing 8 years to 12 years. The impact of the change in the estimate resulted in the decrease of depreciation expense by 49.17 Lacs in the current year.
c) Intangible assets
Refer note 2.2(d) for the estimated useful life of intangible assets. The carrying value of intangible assets has been disclosed in note 4.
d) Contingencies
Refer note 39 for details of contingencies.
e) Impairment of financial assets
Refer note 2.2(m) for the policy to estimate the impairment of financial assets.
f) Impairment of non-financial assets
Refer note 2.2(n) for the policy to estimate the impairment of non-financial assets.
Ind As 101 Exemption
The Company has elected Ind AS 101 exemption and continue with the carrying value for all investment in Joint ventures and Subsidiaries as its deemed cost as at the date of transition.
d) Terms/ rights attached to equity shares:
The Company has only one class of equity shares having a par value of INR 10 per share. Each holder of equity is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend, if proposed by the Board of Directors, is subject to the approval of the shareholders in the Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of any preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
As at March 31, 2018, the paid up equity share capital of the Company stood at 1,363.15 Lacs divided into Nos. 136.32 Lacs equity shares of the face value of Rs 10 each. The Company has obtained its Boardsâ approval for Sub-division of existing 1 equity share having face value of Rs 10 each fully paid-up into 5 equity shares having face value of Rs 2 each. The following matters was approved by the board in the board meeting held on March 23, 2018. Further the company is in process of obtaining shareholders approval through postal ballot.
* Indian rupee loan from bank amounting Rs Nil (March 31, 2017 Rs 1,250 Lacs; April 01, 2016 Rs 2,500 Lacs) taken in the financial year 201213 carried interest @ 10.25% - 10.55% p.a at present. The loan was repaid in 16 equal quarterly instalments of Rs 312.5 Lacs after fifteen month moratorium period from the disbursement date i.e. from Jan 03, 2013. The loan is secured by extension of charges by way of hypothecation on the plant and machinery alongwith the equitable mortgage (EQM) on land and building, situated at Bangalore.
** Vehicle loan amounting Rs 96.47 Lacs (Previous year Rs 125.99 Lacs; April 01, 2016 Rs 132.05 Lacs) from banks at interest @ 8%-10% are secured by way of hypothecation of the respective vehicles acquired out of proceeds thereof. These loans are repayable over a period of three years from the date of availment.
*** Deferred sales tax loan amounting to Rs 3.75 Lacs (March 31, 2017: Rs 20.85 Lacs, April 01, 2016: Rs 30.25 Lacs)] is availed by the Company on sales made during the period from financial year (FY) 1999-2000 to 2005-06. The said loan is repayable in tenure of 10 years starting from FY 2010-11 as per the repayment schedule received from sales tax authorities.
* Working capital loan from financial institution is repayable in 90 days from respective drawdown and carries interest ranging between 8.50%-9.50% per annum.
Loan covenants
The Company has satisfied all debt covenants prescribed in the terms of bank loans. The other loans do not carry any debt covenant.
3. Income tax
a) The major components of income tax expense for the years ended March 31, 2018 and March 31, 2017 are:
Statement of profit and loss:
b) OCI section
Deferred tax related to items recognised in Other Comprehensive Income during the year:
Post applicability of Goods and Services Tax (GST) w.e.f. July 01, 2017, Revenue from Operations are required to be disclosed net of GST in accordance with the requirement of Ind AS. Accordingly, the Revenue from Operations for the year ended March 31, 2018 are not comparable with the immediately preceding quarter ended / year ended March 31, 2017 and corresponding previous periods presented in the financial results which are reported inclusive of Excise Duty. The following additional information is being provided to facilitate such understanding :
4. earnings per share (EPS)
a) Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.
b) Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
c) The following reflects the income and share data used in the basic and diluted EPS computations:
d) There has not been any transactions involving equity shares or potential equity shares between the reporting date and the date of authorisation of these financial statements except stated in note 15 to the financial statement.
5. Material partly-owned subsidiaries
Financial information of subsidiaries that have material non-controlling interests is provided below: Proportion of equity interest held by non-controlling interests:
6. Gratuity and other post-employment benefit plans
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. The scheme is funded with an insurance company in the form of qualifying insurance policy.
a) During the year, the Company has recognized the following amounts in the statement of profit and loss :
b) Defined Benefit Obligation
The following tables summarise the components of net benefit expense recognised in the Statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
7. Commitments and contingencies
a) Capital and other commitments
(1) Estimated amount of contracts remaining to be executed on capital account and not provided for:
Capital commitments are Rs 788.23 Lacs (March 31, 2017: Rs 21.84 Lacs April 1, 2016: Rs 215.19 Lacs), net of advances.
(2) Commitments relating to lease arrangements Operating lease commitments - Company as lessee
The total rent expense under these agreements during the year ended March 31, 2018 is 319.51 Lacs ; March 31, 2017: Rs 354.19 Lacs)
8. Segment Information
The Company had identified its primary business segment as trading & manufacturing of âAutomobile componentsâ.
All activities of the Company revolve around the above segment. The entire operations are governed by the same set of risks and returns. Hence it is considered as single primary business segment.
Geographical segments:
The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and presence in international markets is not significant. Its business is accordingly aligned geographically, catering primarily to India.
9. Final Dividend
The Board of Directors of Lumax Auto Technologies Limited has passed the resolution by way of circulation on May 28, 2018 for declaration of final dividend of Rs 10 per equity share (March 31, 2017: Rs 4.70 per share) of face value of Rs 10 each.
10. Capital Management
For the purpose of the Companyâs capital management, capital includes issued equity capital, all equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholdersâ value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.
11. Fair values
Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:
* The fair values of the FVTOCI financial assets are derived from quoted market prices in active markets.
Management has assessed that remaining financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
Discount rate used in determining fair value
The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
12. Fair value hierarchy
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.
Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.
The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities.
13. Financial risk management objectives and policies
The Companyâs principal financial liabilities comprise of trade and other payables, borrowings, security deposits and payables for property, plant and equipment. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include trade and other receivables, cash, fixed deposits and security deposits that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Companyâs senior management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the companyâs policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk.
The sensitivity analyses in the following sections relate to the position as at March 31, 2018 and March 31, 2017.
The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.
i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs interest bearing financial liabilities includes borrowings with fixed interest rates.
The Companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency).
The Company transacts business in local currency as well as in foreign currency. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives.
iii) Equity Price Risk
The Companyâs listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis. The Companies Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to listed equity securities at fair value was Rs 11,474.14 Lacs. A decrease of 10% on the NSE market index could have an impact of approximately Rs 1147.41 Lacs on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.
B. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
i) Trade receivables
Customer credit risk is managed by Company subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivable) disclosed in Note 7. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.
Further, the Companyâs customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. Hence, no adjustment has been made on account of Expected Credit Loss (ECL) model.
C. Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimised cost.
14. The management has analysed that no significant warranty claim is received by the Company in earlier years against the goods manufactured by the Company and further, the seller of traded goods warrants the Company that products will be free from defects in materials and workmanship under normal use and service and agrees to replace any defective parts under the conditions of standard warranty accompanying the products. Therefore, the Company has not made any provision for warranties and claims in its books of accounts for the year ended March 31, 2018.
15. First time adoption of Ind AS
These financial statements for the year ended March 31, 2018 are the first annual financial statements prepared in accordance with Ind AS. For year up to and including the year ended March 31, 2017, the Company has prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read with the Companies (Indian accounting standard) (Amendment) Rules, 2016.
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ended March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at April 01, 2016, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.
a) exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
i. Deemed cost-Previous GAAP carrying amount: (PPE and Intangible) :
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP (Indian GAAP) and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible. Intangible assets are covered by Ind AS 38. Accordingly, the Company has elected to measure all of its property, plant and equipment, capital work in progress, intangible assets and Intangible assets under development at their previous GAAP carrying value.
ii. Investments in subsidiaries and joint ventures
Ind AS 101 permits a first time adopter to measure its investment in subsidiaries, associates and joint venture, at the date of transition, at cost determined in accordance with Ind AS 27 or deemed cost. The deemed cost of such investment shall be itâs fair value at the Companyâs date of transition to Ind AS, or Previous GAAP carrying amount at that date. The Company has elected to measure its investment in subsidiaries and joint ventures at the previous GAAP carrying amount as its deemed cost on the transition date.
iii. Arrangement contains a lease :
Appendix C to Ind AS 17 requires the first-time adopter to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements for embedded leases based on conditions in place as at the date of transition.
b) Estimates
The estimates at April 01, 2016 and at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP apart from the following items where application of Indian GAAP did not require estimation:
i. Investment in equity instruments carried at Fair Value Through Other Comprehensive Income (FVTOCI); and
ii. Impairment of financial assets based on expected credit loss model.
The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 01, 2016, the date of transition to Ind AS and as of March 31, 2017.
f) Footnotes to the reconciliation of equity as at April 01, 2016 and March 31, 2017 and profit or loss for the year ended March 31, 2017:
1 Fair value of investment in equity instruments designated as FVTOCI
Under the previous GAAP, investment in long term equity instruments were carried at cost less provision for diminution, other than temporary, in the value of such investment. Under Ind AS these investments are required to be measured at fair value. Accordingly, fair value change with respect to investment in equity instruments of Lumax Industries Limited, designated at FVTOCI, have been recognized in other comprehensive income for the year ended March 31, 2017. This resulted in net increase in investment and total comprehensive income for the year ending March 31, 2017 by Rs 5,039.48 Lacs and Rs 264.28 Lacs at the date of transition i..e April 01, 2016 ;
2 Sale of goods
Under Previous GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased by INR 4076.48 with a corresponding increase in other expense. This being reclassification adjustments, have no impact on profit for the year on account of the same.
3 Defined benefit liabilities
Both under Indian GAAP and Ind AS, the Group recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.
4 Other comprehensive income
Under Previous GAAP, the Company has not presented Other Comprehensive Income (OCI) separately. Hence, it has reconciled Previous GAAP profit to profit or loss as per Ind AS. Further, Previous GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.
5 Cash Discounts
Revenue shall be measured at fair value of the consideration received or receivable. Also the amount of revenue arising on a transaction is usually determined by agreement between the entity and the buyer or user of the asset. It is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity. Therefore, the total sales has been disclosed net of any discounts given/to be given to the customers. However, this does not impact the results of the Company.
g) Cash Flow Statement
The transition from Previous GAAP to Ind AS do not have a material impact on the statement of cash flows.
16. Standards issued but not yet effective
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Groupâs financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.
The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:
a) Ind AS 115 - Revenue from Contracts with Customers
In March 2018, the Ministry of Corporate Affairs had notified Ind AS 115 âRevenue from Contracts with Customersâ which would be applicable for accounting periods beginning on or after 1 April 2018.This Standard establishes the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The Company is evaluating the requirements of the new standard and the effect on the financial statements is expected to be insignificant.
b) Amendments to Ind AS 12 - Recognition of Deferred Tax Assets for unrealised Losses
The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.
Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.
c) Transfers of Investment Property â Amendments to Ind AS 40
The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in managementâs intentions for the use of a property does not provide evidence of a change in use.
Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.
The amendments are effective for annual periods beginning on or after 1 April 2018. The Company will apply amendments when they become effective. However, since there are no investment properties, the Company does not expect any effect on its financial statements.
d) Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration
The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.
Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:
(i) The beginning of the reporting period in which the entity first applies the Appendix, or
(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.
The Appendix is effective for annual periods beginning on or after 1 April 2018. However, since the Companyâs current practice is in line with the Interpretation, the Company does not expect any effect on its financial statements.
Mar 31, 2017
1. Operating lease: Company as lessee
The Company has entered into commercial leases for office premises and warehouses. There are no contingent rents in the lease agreements. The lease terms is for 1-5 years and more than 5 year and are renewable at the mutual agreements of both the parties. There are no restrictions imposed by lease arrangements. There are no subleases. The rent expense under these agreements is Rs. 35,419,434 (March 31, 2016 : Rs. 27,463,614).
2. Segment information Business segment
The Company had identified its primary business segment as trading & manufacturing of "Automobile components"
All activities of the Company revolve around the above segment. The entire operations are governed by the same set of risks and returns. Hence it is considered as single primary business segment.
Geographical segment
The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and presence in international markets is not significant. Its business is accordingly aligned geographically, catering primarily to India.
3. The management has analyzed that no significant warranty claim is received by the Company in earlier years against the goods manufactured by the Company and further, the seller of traded goods warrants the Company that products will be free from defects in materials and workmanship under normal use and service and agrees to replace any defective parts under the conditions of standard warranty accompanying the products. Therefore, the Company has not made any provision for warranties and claims in its books of accounts for the year ended March 31, 2017.
4. The Company has closed the operations of one of its unit at Aurangabad, due to lack of customer orders and created adequate provisions in books for incidental cost incurred/expected to incur related to the closure of the said plant. The company believes that the provision carried in the books is sufficient to cover any losses in relation to the closure of the plant. The laborers had filed a legal case against the company in that regard. The District Court has, recently, issued interim relief order to maintain status quo for the said plant.
5. The Company has entered into an agreement with Lumax Ancillary Limited to sell one of its unit at kala amb in slump sale basis on April 1, 2017. Accordingly WDV of fixed assets situated at KalaAmb are disclosed under current assets as " Assets held for sale" amounting to Rs. 709,792 as at Balance sheet date.
6. Previous yearâs figures have been reclassified/re-grouped wherever necessary, to confirm to this year''s classification.
Mar 31, 2016
b) Terms/rights attached to equity shares
The company has only one class of equity shares having a par value of H10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
1. Operating lease: Company as lessee
The Company has entered into commercial leases office premises and warehouse. There are no contingent rents in the lease agreements. The lease terms is for 1- 5 years and are renewable at the mutual agreements of both the parties.
There are no restrictions imposed by lease arrangements. There are no sublease and the entire lease are non-cancellable in nature. The rent expense under these agreements is Rs.27, 463,614 (Previous year: Rs.24, 474,205)
2. Details of expenses capitalized under fixed assets/capital work in progress
During the year, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.
3. Related Party Disclosure
Names of related parties and related party relationship
Related parties with whom transactions have taken place during the year
|
S.No. |
Particulars |
Name of Related Parties |
|
1 |
Subsidiary Companies |
Lumax DK Auto Industries Limited ("LDK") Lumax Mannoh Allied Technologies Limited ("LMAT") Lumax Energy Solutions Private Limited ( "LES" ) Lumax Integrated Ventures Private Limited ("LIVE" ) Lumax Sipal Engineering Pvt. Ltd. |
|
2 |
Key Management Personnel |
Mr.D.K. Jain (Chairman) Mr.Anmol Jain (Managing Director) |
|
3 |
Relatives of Key Management Personnel |
Mr.Deepak Jain ( Son of Mr. D.K. Jain ,Brother of Mr. Anmol Jain) Mrs. Shivani Jain ( Wife of Mr. Anmol Jain ) Mrs. Usha Jain ( Wife of Mr.D.K.Jain & Mother of Mr. Anmol Jain and Mr.Deepak Jain) |
|
4 |
Enterprise owned or significantly influenced |
Lumax Industries Limited |
|
|
by Key Management Personnel or their |
Lumax Finance Private Limited |
|
|
Relatives |
Lumax Ancillary Limited Mahavir Udyog D. K. Jain & Sons ( HUF) Bharat Enterprises D. K. Jain & Family Trust Lumax Tours & Travels Limited Vardhman Agencies Private Limited Lumax Charitable Foundation Lumax Management Services Private Limited |
|
5 |
Joint Venture |
Lumax Cornaglia Auto Technologies Private Limited ("LCAT") Lumax Gill Austem Auto Technologies Private Limited (LGAT" |
4. Segment information Business segment
The Company had identified its primary business segment as dealing & manufacturing of "Automotive components".
All activities of the Company revolve around the above segment. The entire operations are governed by the same set of risks and returns. Hence it is considered as single primary business segment.
Geographical segment
The analysis of geographical segment is based on the geographical location of the customers. The Company operates primarily in India and presence in international markets is not significant. Its business is accordingly aligned geographically, catering primarily to India.
5. Corporate Social Responsibility (CSR) expenditure
As per the provisions of Section 135 of the Companies Act, 2013 and Companies (Corporate social responsibility Policy) Rules 2014, the Company has to spend atleast 2% of average net profit of last three financial years towards CSR. Accordingly a CSR committee has been formed for carrying out the CSR activities as per Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs.4,100,000 (Previous year- Rs.3,140,000 towards CSR and debited the same to the statement of Profit and Loss.
6. Interest in Joint venture Companies
Pursuant to Accounting Standard 27 on financial report of interests in joint ventures, the relevant information relating to the joint venture companies is as given below.
7. During the previous year the Company had received consideration of Rs.237,150,000 against sale of 45% shares of Lumax Mannoh Allied Technologies Limited (LMAT). The consideration was received in terms of Joint venture and share purchase and shareholder agreement dated March 4, 2014 amongst the Company, Mannoh Industrial Co. Limited, Lumax DK Auto Industries Limited and Lumax Mannoh Allied Technologies Limited.
8. During the year, the Company has acquired 100% shares of Lumax Integrated Ventures Private Limited ("LIVE") against consideration of Rs.1, 049,400.
9. Previous yearâs figures have been reclassified/re-grouped wherever necessary, to confirm to this year''s classification.
Mar 31, 2015
1 Corporate information
Lumax Auto Technologies Limited is a Public Limited Company located in
India. The Company is engaged in dealing & manufacturing of automotive
components. The Shares of the Company are listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE).
2 Basis of preparation
The financial statements of the Company have been prepared in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under section 133 of the Companies Act 2013, read together with
paragraph 7 of the Companies (Accounts) Rules 2014. The financial
statements have been prepared on an accrual basis and under the
historical cost convention, The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year, except for the change in accounting policy explained
below.
3 Terms/rights attached to equity shares
The company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares holder is entitled to
one vote per share. The company declares and pays dividend in Indian
rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
4 Gratuity and other post -employement benefit plans :
The Company operates defined plans, viz., gratuity for its employees.
Under the gratuity plan, every employee who has completed atleast five
years of service gets a gratuity on departure @ 15 days of last drawn
salary for each completed year of service. The scheme is funded with an
insurance company in the form of qualifying insurance policy.
The following tables summarize the components of net benefit expense
recognized in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet for the respective plans.
5 Operating lease: Company as lessee
The Company has entered into commercial leases for office premises and
warehouses. There are no contingent rents in the lease agreements. The
lease terms is for 1-5 years and are renewable at the mutual agreements
of both the parties. There are no restrictions imposed by lease
arrangements. There are no sublease and all the leases are
non-cancellable in nature. The rent expense under these agreements is
Rs.24,474,205 (Previous year : Rs. 16,176,478).
6 Depreciation
(a) . Till 31st March, 2014, depreciation was being provided on
straight line method as per the rates prescribed in Schedule XIV of the
Companies Act, 1956. The Schedule XIV has been replaced by Schedule II
of the Companies Act, 2013 and the depreciation has been charged on
straight line method on the basis of useful lives of the assets in the
manner as prescribed in Schedule II of Companies Act, 2013.
(b) Till 31st March, 2014, the assets for a value not exceeding Rs.
5000/- were written off in the year of purchase as per Schedule XIV of
the Companies Act, 1956. Schedule II of the Companies Act, 2013 does
not recognize such practice. The depreciation on assets for a value not
exceeding Rs. 5000/- has been provided on the basis of their useful
lives in the manner as prescribed in the Schedule II of the Companies
Act, 2013.
7 Contingent Liabilities (Amount in Rs.)
Particulars Year Year
Ended Ended
March 31, March 31,
2015 2015
In respect of A.Y. 2010 - 11, the assessing
officer has added to the income of the
Company notional amount of disallowance
under Rule 14A of the Income tax act,1961
amounting to Rs. 435,192 against which demand 118,000 118,000
raised for amountingRs 118,000. The Company
has preferred an appeal with CIT (A).
In respect of A.Y. 2012 - 13, the assessing
officer has added to the income of the
under Rule 14A of the Income tax act,
Company notional amount of disallowance
1961 amounting to Rs. 1,134,302 against
which demand raised for amounting Rs 384,670. 384,670 -
The Company has preferred an appeal with
CIT (A).
Deputy commissioner (Central Excise) 36,27,098 -
has disallowed CENVAT credit amounting
Rs.3,627,098 paid on nickel plating to
job worker relating to the period from
2008-09 to 2013-14.The Company had filed
the appeal with Commissioner
(Appeals) and personal heraing is pending
before the Commissioner (Appeals)
in respect of the period from 2008 -09 to
November 2013.
Deputy commissioner (Central Excise) 10,42,425 -
had raised a demand in respect of 6 %
reversal of exempted services relating
to the period from October 2008 to
July 2013.The Company had filed the
(Appeals).appeal with Commissioner (Appeals)
and personal heraing is pending before
the Commissioner
The Company on the basis of current status of the cases and advice
obtained from legal counsel is confident that there would not be any
probable outflow of resources in these matters.
8 Related Party Disclosure
(A) Subsidiary companies
Lumax DK Auto Industries Limited (LDK)
Lumax Mannoh Allied Technologies Private Limited
(B) Key Management Personnel D.K. Jain (Chairman)
Anmol Jain (Managing Director)
(C) Relative Of Key Management Personnel
Deepak Jain (Son Of Mr. D.K. Jain ,Brother of Mr. Anmol Jain)
Mrs. Shivani Jain ( Wife of Mr. Anmol Jain )
Mrs. Usha Jain (Wife of Mr.D.K.Jain & Mother of Mr. Anmol Jain)
(D) Enterprises Owned or Significantly Influenced by Key Management
Personnel Lumax Industries Limited
Lumax Finance Private Limited Lumax Ancillary Limited Mahavir Udyog D.
K. Jain & Sons ( HUF)
Bharat Enterprises D. K. Jain Family Trust Lumax Tours & Travels
Limited Vardhman Agencies Private Limited Lumax Charitable Foundation
(E) Joint Venture
Lumax Cornaglia Auto Technologies Private Limited (LCAT)
Lumax Gill-Austem Auto Technologies Private Limited (LGAT)
9 Segment information Business segment
The Company had identified its primary business segment as dealing &
manufacturing of "Automotive components".
All activities of the Company revolve around the above segment. The
entire operations are governed by the same set of risks and returns.
Hence it is considered as single primary business segment.
Geographical segment
The analysis of geographical segment is based on the geographical
location of the customers. The Company operates primarily in India and
has some presence in international markets as well. Its business is
accordingly aligned geographically, catering to two markets i.e India
and Outside India. The Company has considered domestic and exports
markets as geographical segments and accordingly considered them for
disclosure based on materiality of transactions.
10 Corporate Social Responsibility (CSR) expenditure
As per the provisions of Section 135 of the Companies Act, 2013 and
Companies (Corporate Social Responsibility Policy) Rules 2014, the
Company has to spend atleast 2% of average net profit of last three
financial years towards CSR. Accordingly a CSR committee has been
formed for carrying out the CSR activities as per Schedule VII of the
Companies Act, 2013. The Company has contributed a sum of Rs. 3,140,000
towards CSR and debited the same to the statement of Profit and Loss.
11 During the year, the Company has received consideration of Rs
237,150,000 against sale of 45% shares of Lumax Mannoh Allied
Technologies Private Limited (LMAT). The consideration is received in
terms of Joint venture and Share purchase and Shareholder agreement
dated March 4, 2014 amongst the Company, Mannoh Industrial Co. Limited,
Lumax DK Auto Industries Limited and Lumax Mannoh Allied Technologies
Private Limited.
12 The management has analysed that no significant warranty claim is
received by the Company in earlier years against the goods manufactured
by the Company and further, the seller of traded goods warrants the
Company that products will be free from defects in materials and
workmanship under normal use and service and agrees to replace any
defective parts under the conditions of standard warranty accompanying
the products. Therefore, the Company has not made any provision for
warranties and claims in its books of accounts for the year ended March
31, 2015.
13 Previous year figures were audited by another firm of Chartered
Accountant.
14 Previous years figures have been reclassified/re-grouped wherever
necessary, to confirm to this year''s classification.
Mar 31, 2013
1 Company Information
Lumax Auto Technologies Limited is a public limited company located in
India and incorporated under the Companies Act, 1956. The company is
engaged in dealing & manufacturing of automotive components. The shares
of the company are listed on the Bombay Stock Exchange Ltd. (BSE) and
the National Stock Exchange of India Ltd. (NSE).
2.1 Disclosure of Standalone Results of Subsidiary Company:
The Ministry of Company Affairs, Government of India, vide its General
Circular no. 2/2011 dated February 08, 2011, issued under section
212(8) of the Companies Act, 1956 , has exempted the company from
attaching the Balance sheet and Statement of Profit and Loss of its
subsidiary under section 212(1) of the Companies Act, 1956.
3.1 Balance in Deposit Accounts includes:-
a) Rs. 2,50,000/- is deposited towards guarantee in Central Excise
Delhi for removal of goods without payment of excise duty under Bond (
CT-1 form) for export.
b) Rs. 50,000/- is deposited towards gurantee in Sales Tax department
(Nahan Kala-amb) .
4.1 During the year an amount of Rs.97.92 Lacs paid to Mrs. Usha Jain
- Managing Director of the Company, in excess of the limits specified
by the relevant provisions of the Companies Act, 1956 on account of the
overseas medical treatment.
The Company had got approval from the shareholders for waiver of the
said excess remuneration to the Managing Director through Postal Ballot
and application to the Central Government was filed by the company for
approval of the said proposal. Subsequently, a letter was received from
the Managing Director requesting the company to accept the refund of
excess remuneration paid to her on account of her overseas medical
treatment. The Board of Directors of the Company accepted the said
request and decided to drop the applications filed with the Central
Government for approval of the said proposal. The Company is in process
to withdraw the application made to the Central Government in this
respect as the amount has been refunded.
5. Related Party Disclosure
(A) Subsidiary
(i) Lumax DK Auto Industries Limited
(B) Key Management Personnel
(i) Mrs. Usha Jain ( Managing Director)
(C) Relative Of Key Management Personnel
(i) Mr. D.K. Jain (Husband of Mrs. Usha Jain)
(ii) Mr. Deepak Jain (Son of Mrs. Usha Jain)
(iii) Mr. Anmol Jain (Son of Mrs. Usha Jain)
(D) Enterprises Owned or Significantly Influenced by Key Management
Personnel
(i) Lumax Industries Limited
(ii) Lumax Finance Private Limited
(iii) Lumax Ancilliary Limited
(iv) Lumax Automotive System Limited
(v) Lumax Filters Private Limited
(vi) Mahavir Udyog
(vii) D. K. Jain & Sons ( HUF)
(viii) Bharat Enterprises
(ix) D. K. Jain & Family Trust
(x) Lumax Tours & Travels Limited
(xi) Vardhman Agencies Private Limited
(E) Joint venture
(i) Lumax Cornaglia Auto Technologies Private Limited
Mar 31, 2012
1 Company Information
Lumax Auto Technologies Limited is a Public Limited company located in
India and incorporated under the Companies Act, 1956. The Company is
engaged in manufacturing & selling of automotive parts. The shares of
the Company are listed on the Bombay Stock Exchange Ltd. (BSE) and the
National Stock Exchange of India Ltd. (NSE).
2.1 Rights, preferences & restrictions attached to shares-
The company has only one class of equity shares having a par value of
Rs.10 per share. Each holder of equity shares is entitled to one vote per
share. The company declares dividend in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
3.1 Disclosure of Standalone Results of Subsidiary Company:
The Ministry of Company Affairs, Government of India, vide its General
Circular no. 2/2011 dated 8th February, 2011, issued under section
212(8) of the Companies Act, 1956, has exempted the company from
attaching the Balance Sheet and Statement of Profit and Loss of its
Subsidiary under section 212(1) of the Companies Act, 1956,
3.2 Interest in Joint Venture Companies
Pursuant to Accounting Standard 27 on Financial Reporting of Interests
in Joint Ventures, the relevant information relating to the Joint
Venture Company, is as given below:
Raw Materials and components, Stores & Spares (Including Packing
Materials), Traded Goods (Including Moulds & Dies) -
Valued at lower of Landed cost (net of taxation credits, if any) and
Net Realizable value*, after making provision for obsolescence wherever
necessary.
Cost comprises of cost of Purchase & other costs incurred in bringing
them to their respective present location and condition and is
determined on First-in-First-Out (FIFO) basis.
Work-in-Progress, Finished Goods -
Valued at lower of cost and Net Realizable value*, after making
provision for obsolescence wherever necessary.
Cost of Work-in-progress & Finished Goods includes Direct Material,
Labour and proportion of manufacturing overheads
Scrap-
At Net Realizable Value*.
4.1 Balance in Deposit Accounts includes:-
a) Rs. 2,50,000/- is deposited towards guarantee with Central Excise
Delhi for removal of Goods without payment of Excise Duty under Bond (
CT-1 form) for Export.
b) Rs.. 50,000/- is deposited towards guarantee with Sales Tax department
(Nahan Kaleamb) .
5. Statement showing the use of proceeds from Preferential allotment
of Shares:
During the Year ended March 31, 2011, the Company had issued 20,00,000
equity shares of Rs. 10/- each on preferential basis at a premium of Rs.
109.10 per share. The net proceeds of the issue have been utilized for
the objects of the issue as detailed below:
6. Gratuity and Other Post-employment Benefit Plans :
Liability for employee benefits has been determined by an actuary, in
conformity with the principles set out in the accounting Standard 15
(revised ) which are as hereunder :
7. Contingent Liabilities (Rs. in Lacs)
Particulars Year Ended Year Ended
March 31, 2012 March 31, 2011
Income Tax demand : For Assessment
Year 2007-08, Company has filed an
appeal with CIT Appeal), Further,
CIT (Appeal) has passed an order in
favour of company, and have inst
ructed Assessing officer to review
some of the matters contested by
the company, for which assessing
officer has not issued any demand
to the company Nil Nil
Corporate Guarantee given to Bank
against Loans taken by Subsidiary
Company Lumax DK Auto Industries
Limited. Nil 22.85
8. Related Party Disclosure :
(A) Subsidiary
(a) Lumax DK Auto Industries Ltd.
(B) Key Management Personnel
(a) Mr. D.K. Jain ( Husband Of Mrs. Usha Jain & Father Of Mr. Anmol
Jain)
(b) Mrs. Usha Jain ( Wife Of Mr. D.K. Jain & Mother Of Mr. Anmol Jain)
(c) Mr. Anmol Jain ( Son Of Mr. D.K. Jain & Mrs. Usha Jain)
(C) Relative Of Key Management Personnel
(a) Mr. Deepak Jain ( Son Of Mr. D.K. Jain & Mrs. Usha Jain, Brother of
Mr. Anmol Jain)
(b) Mrs. Shivani Jain ( Wife Of Mr. Anmol Jain)
(D) Enterprises Owned or Significantly Influenced by Key Management
Personnel
(a) Lumax Industries Ltd.
(b) Lumax Finance Pvt. Ltd.
(c) Lumax Anciliary Ltd. ( Formerly Deepak Auto Ltd.)
(d) Lumax Automotive System Ltd.
(e) Lumax Filter Limited
(f) Mahavir Udyog
(g) D. K. Jain & Sons ( HUF)
(h) Lumax International Pvt. Ltd.
(i) Bharat Enterprises
(j) D. K. Jain & Family Trust
(k) Lumax Tours & Travels Ltd.
(l) Vardhman Agencies Pvt. Ltd.
(E) Joint Venture
(a) Lumax Cornaglia Auto Technologies Pvt. Ltd.
Mar 31, 2011
1. Contingent Liabilities not provided for
(Amount Rs. in Lacs)
Sr.
No. Particulars 2010-11 2009-10
a) Income Tax demand : For Assessment
Year 2007-08, Company has filed
an appeal with CIT (Appeal), Further,
CIT (Appeal) has passed an order
in favour of company, and have instructed
Assessing officer to review
some of the matters contested by the
company, for which
assessing officer has not issued any
demand to the company Nil 152.62
b) Corporate Guarantee given to Bank
against Loans taken by Subsidiary
Company Lumax DK Auto Industries Limited. 22.85 222.97
Based on the favourable decisions in similar cases/legal opinions taken
by the Company, the company believes that it has good cases in respect
of the items listed under (a) above and hence no provision there
against is considered necessary.
2. Details in respect of Opening Stock, Production, Turnover & Closing
Stock of Finished Goods: As Per Annexure-A (Certified by Management).
3. Details in respect of consumption of Raw Materials and Consumables
and others: As per Annexure-B (Certified by Management).
4. In terms of Paragraph-3 Part-II of Schedule VI of the Companies Act
1956, quantity wise disclosure have been restricted to those items/
articles which individually account for 10% or more of the total Sales,
Consumption as the case may be and the same is disclosed to the extent
available and considered as compiled and certified by the management.
5. Gratuity and Other Post-Employment Benefit Plans:
Provision for Gratuity is made in the books and take into effect the
application of changes vide Gazette Notification No.15/2010, as the
effective date of changes were notified by the Central Government
during Current Year.
6. Related Party Disclosures:
The information about transactions with the related parties is attached
herewith - As per Annexure "C".
7. Balance confirmation letters have not been obtained from some of
the parties.
8. Previous year's figures have been regrouped or rearranged wherever
necessary to make them comparable with the current year's figures.
Related Party Disclosure:
(A) Subsidiary
(a) Lumax DK Auto Industries Ltd.
(B) Key Management Personnel:
(a) Mr. D. K. Jain (Husband of Mrs. Usha Jain & Father of Mr. Anmol
Jain)
(b) Mrs. Usha Jain (Wife of Mr. D.K. Jain & Mother of Mr. Anmol Jain)
(c) Mr. Anmol Jain (Son of Mr. D.K. Jain & Mrs. Usha Jain)
(C) Relatives of Key Management Personnel :
(a) Mr. Deepak Jain (Son of Mr. D.K. Jain & Mrs. Usha Jain, Brother of
Mr. Anmol Jain)
(b) Mr. S.C. Jain (now deceased) (Father of Mr. D.K. Jain & Grandfather
of Mr. Anmol Jain and Deepak Jain)
(c) Mrs. Shivani Jain (Wife of Mr. Anmol Jain)
(D) Enterprises Owned or Significantly Influenced by Key Management
Personnel :
(a) Lumax Industries Ltd.
(b) Lumax Finance Pvt. Ltd. (formely Sheela Finance Pvt. Ltd.)
(c) Deepak Auto Ltd.
(d) Lumax Automotive Systems Ltd.
(e) Lumax Filter Pvt. Ltd.
(f) Mahavir Udyog
(g) Lumax Investment and Finance Pvt. Ltd. (Merged with Sheela Finance
Pvt. Ltd.) (h) Lumax International Pvt. Ltd.
(i) Bharat Enterprises
(j) S L Lumax Ltd.
(k) Lumax Tours & Travels Ltd.
(l) Vardhman Agencies Pvt. Ltd.
(E) Joint Venture
(a) Lumax Cornaglia Auto Technologies Pvt. Ltd.
Mar 31, 2010
1 a. Capital Commitment Net of Advance Rs. 22.28 Lacs (Previous year
382.72 Lacs)
2. Details in respect of Opening Stock, Turnover & Closing Stock of
Finished Goods (Including Traded Goods) : As Per Annexure-A (Certified
by Management).
3. Details in respect of consumption of Raw Materials, Consumables and
purchase of traded goods : As per Annexure-B (Certified by Management).
4. In terms of Paragraph-3 Part-II of Schedule VI of the Companies Act
1956, quantity wise disclosure have been restricted to those
items/articles which individually account for 10% or more of the total
Sales, Consumption as the case may be and the same is disclosed to the
extent available and considered as compiled and certified by the
management.
5. Sundry Creditors as defined under the Micro, Small and Medium
Enterprises Development Act, 2006 (MSMED) have been identified to the
extent of information available with the company . This has been relied
upon by the auditors. Sundry Creditors include following amounts due to
MSMED parties:
6. Balance confirmation letters have not been obtained from some of
the parties.
7. Previous years figures have been regrouped or rearranged wherever
necessary to make them comparable with the current years figures.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
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