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Notes to Accounts of Munjal Auto Industries Ltd.
Mar 31, 2025
xv. Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash
flows (when the effect of the time value of money is material).
Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits
is probable.
Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of
resources embodying economic benefit is remote.
Product warranty expenses
The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future
incidences based on actions on product failures. The timing of outflows will vary as and when warranty claim will arise, being
typically up to five years.
xvi. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instruments
Financial assets and financial liabilities are initially measured at fair value except trade receivables which are initially measured
at transaction price. T ransaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through the Statement of Profit and Loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through the Statement of Profit and Loss are
recognised immediately in the Statement of Profit and Loss.
xvii. Financial assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on
the classification of the financial assets.
(a) Financial assets at amortised cost
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets
in order to collect such contractual cash flows are classified in this category. Subsequently, these are measured at amortized
cost using the effective interest method less any impairment losses.
(b) Equity investments at fair value through other comprehensive income:
Financial assets are measured at fair value through other comprehensive income (FVTOCI) if these financial assets are
held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets
and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding. These include financial assets that are equity instruments and are
irrevocably designated as such upon initial recognition. Subsequently, these are measured at fair value and changes therein
are recognized directly in other comprehensive income, net of applicable income taxes.
Dividends from these equity investments are recognized in the Statement of Profit and Loss when the right to receive
payment has been established.
When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.
(c) Financial assets at fair value through profit or loss
Financial assets are measured at fair value through Profit or Loss (FVTPL) unless they are measured at amortised cost
or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the
acquisition of financial assets at fair value through Profit or Loss are immediately recognised in the Statement of Profit and
Loss.
(d) Impairment of financial assets
The Company assesses at each balance sheet date whether a financial asset or a group of financial assets is impaired.
Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime
expected losses for trade receivables that do not constitute a financing transaction. For all other financial assets, expected
credit losses are measured at an amount equal to 12 month expected credit losses or at an amount equal to lifetime expected
losses, if the credit risk on the financial asset has increased significantly since initial recognition.
(e) Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On
derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI), the difference between
the asset''s carrying amount and the sum of the consideration received and receivable is recognised in the Statement of
Profit and Loss.
xviii. Financial liabilities and equity instruments
Debt and equity instruments issued by Company are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
(a) Financial liabilities
Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortised cost at the
end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at
amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of
costs of an asset is included in the ''Finance costs''.
(b) Equity instruments
An equity instrument is any contract that evidences residual interests in the assets of the Company after deducting all of
its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(c) Derecognition of financial liabilities
The Company derecognises financial liabilities when and only when the Company''s obligations are discharged, cancelled
or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration
paid and payable is recognised in the Statement of Profit and Loss.
xix. Research and development expenditure
Research costs are charged to the statement of profit and loss in the year in which they are incurred.
Product development costs incurred on new products are recognised as intangible assets, when feasibility has been established,
the Company has committed technical, financial and other resources to complete the development and it is probable that asset
will generate probable future economic benefits. The costs capitalised include the cost of materials, direct labour and directly
attributable overhead expenditure incurred up to the date the asset is available for use. Interest cost incurred is capitalised up
to the date the asset is ready for its intended use, based on borrowings incurred specifically for financing the asset or the weighted
average rate of all other borrowings if no specific borrowings have been incurred for the asset.
Product development expenditure is measured at cost less accumulated amortisation and impairment, if any.
xx. Statement of cash flows:
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non¬
cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses
associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activities.
5 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company accounting policies, which are described in note no. 4, the management of the Company is required
to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if
the revision affects both current and future periods.
(i) Critical judgments in applying accounting policies
The following are the areas of estimation uncertainty and critical judgements that the management has made in the process of
applying the Company''s accounting policies and that have the most significant effect on the amounts recognised in the standalone
financial statements:-
(a) Evaluation of indicators for impairment of property, plant and equipment
The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline
asset''s value, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical
damage of an asset or poor economic performance of the asset etc.) which could result in significant change in recoverable
amount of the Property, Plant and Equipment.
(ii) Assumptions and key sources of estimation uncertainty
(a) Assets and obligations relating to employee benefits
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a
number of assumptions. The assumptions used in determining the net cost/ (income) include the discount rate, inflation
and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit
obligations.
(b) Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting period. As at March 31, 2025 management
assessed that the useful lives represent the expected utility of the assets to the Company. Further, there is no significant
change in the useful lives as compared to previous year.
(c) Estimation of provision for warranty
Management estimates the related provision for future warranty claims based on certain percentages of revenue. The
provision is based on historical information on the nature, frequency and average cost of warranty claims. Management
also estimates regarding possible future outflow on servicing the customers for any corrective action in respect of product
failure which is generally expected to be settled within a period of 1 to 5 years.The assumptions made in relation to the
current period are consistent with those in the prior year. Factors that could impact the estimated claim information include
the success of the Company''s productivity and quality initiatives.
(d) Provision for price differences
The company recognises price difference payable to parties, where settlement is pending for final negotiation. It is provided
on the basis of best estimate and management assessments, considering the past trades and various other factors. This
provisions are reviewed on regular basis and adjusted with respective elements with statement of profit and loss from the
adequacy and reasonability point of view.
Revenue is measured by the Company at the transaction price i.e. amount of consideration received/receivable from its
customers. In determining the transaction price for the sale of products, the Company considers the effects of various factors
such as volume-based discounts, price adjustments to be passed on to the customers based on various parameters like
negotiations based on savings on materials / share of business, rebates etc provided to the customers. The Company''s
business also requires passing on these credits related to price adjustments and others to the customers for the sales
made by the Company. The Company, at the year end, has provided for such price adjustments to be passed on to the
customers based on agreed terms, negotiations undertaken, commercial considerations and other factors. This requires
significant judgement and estimate in calculating the price adjustments to be recorded as at the year end.
(e) Provision for slow moving and obsolete items in Inventory valuation
Inventories are measured at the lower of cost and net realizable value. Write-down of inventories are calculated based on
an analysis of foreseeable changes in demand, technology or market conditions to determine obsolete or excess
inventories.
(f) Identification of leases, duration and value
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of
a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including
anticipated renewals) and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by
an option to extend the lease and to terminate the lease if the Company is reasonably certain not to exercise that option.
In assessing whether the Company is reasonably certain to exercise an option to extend a lease or not to exercise an
option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the
Company to exercise the option to extend the lease or not to exercise the option to terminate the lease. The Company revises
the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is rate of interest that the Company would have to pay to borrow over a similar term and with a similar
security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
(g) Earnings per share
Basic earnings per share has been computed by dividing profit for the year by the weighted average number of shares
outstanding during the year. Partly paid-up shares are included as fully paid equivalents according to the fraction paid up.
Diluted earnings per share has been computed using the weighted average number of shares and dilutive potential shares,
except where the result would be anti-dilutive.
(iii) Income tax
The Company is involved in tax disputes amounting to '' 272.9 (as at March 31, 2024''95.04) Lakhs relating to Income
Tax. This mainly relate to the disallowance under section 14A and Domestic Transfer Pricing of the Income Tax Act, 1961
and interest thereon which is pending at Appellate level.
(iv) Excise duty
The Excise Authorities had denied a CENVAT credit amounting to '' 29.38 Lakhs and imposed a penalty of '' 29.38 Lakhs
for a period between June, 2008 to March, 2009 ('' 29.38 Lakhs and '' 29.38 Lakhs CENVAT credit and penalty
respectively at March 31, 2024) in respect of CENVAT credit availed on supplementary invoices raised by the Customer
on account of material supplied by them. The Company is contesting the show cause notice.
(v) Sales tax
The total sales tax demands (including interest and penalty), that are being contested by the Company amount to 1? 33.22
(as at March 31, 2024''33.22) Lakhs. The details of the demands are as follows:
The Sales Tax authorities have denied input tax credit and levied interest and penalty thereon due to varied reasons
aggregating to '' 33.22 (as at March 31, 2024''33.22) Lakhs . The reasons for disallowing credit was mainly due to
not allowing set off of taxes on LPG Gas and other materials used in manufacturing and also not allowing full deduction
of taxes paid. Further, there is levy of purchase tax on purchase of LPG Gas. The matter is contested in appeal.
(vi) Goods and Service Tax
The Company is involved in tax disputes amounting to '' 1960.21 (as at March 31, 2024''0) Lakhs relating to GST.
This mainly relate to the ITC disallowance and others and interest thereon which is pending at Appellate level.
49 EMPLOYEE BENEFITS
(a) Defined contribution plans
Contributions to defined contribution plan are recognized as expenses when contributions become due.
The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognized
in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified
by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions
that were not due to be paid until after the end of the reporting period. The major defined contribution plans operated by the
Company are as below:
(i) Provident fund and pension
In accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952 eligible employees of the
Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees
and the Company make monthly contributions at a specified percentage of the covered employees'' salary.
The contributions, as specified under the law, are made to the provident fund set up as an irrevocable trust by the Company,
post contribution of amount specified under the law to Employee Provident Fund Organization on account of employee
pension scheme.
(ii) Superannuation fund
The Company has a superannuation plan for the benefit of its employees. Employees who are members of the defined
benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn.
Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The Company contributes up
to 10% of the eligible employees'' salary to the trust every year. Such contributions are recognized as an expense as and
when incurred. The Company does not have any further obligation beyond this contribution. 1
(II) Interest rate risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return
on the plan''s debt investments.
(III) Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants
both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
(IV) Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such,
an increase in the salary of the plan participants will increase the plan''s liability.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it
is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Sensitivity due to mortality are not material & hence impact of change not calculated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated
using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined
benefit obligation liability recognized in the balance sheet.
The Company expects to make a contribution of '' 156.82 (as at March 31, 2024 : '' 133.59) Lakhs to the defined benefit plans
during the next financial year.
(c) Other long term employee benefit plans
Leave encashment
Amount of '' 473.95 (March 31, 2024''423.66) Lakhs is recognized as expenses and included in note no. 42 âEmployee
benefit expenseâ.
50 IMPAIRMENT OF ASSETS
In accordance with the Indian Accounting Standard (Ind AS-36) on âImpairment of Assetsâ the Company has, during the year, carried
out an exercise of identifying the assets that may have been impaired in respect of cash generating unit in accordance with the said
Indian Accounting Standard. Based on the exercise, no impairment loss is required as at March 31, 2025.
51 SEGMENT REPORTING
The Company''s operations falls under single segment namely âManufacturing of Auto Componentsâ, taking into account the risks and
returns, the organization structure and the internal reporting systems. The board of directors of the Company, which has been identified
as being the chief operating decision maker (CODM), evaluates the Company''s performance, allocates resources based on the
analysis of the various performance indicators of the Company as a single unit. Therefore, there is no reportable segment for the
Company as per the requirement of IND AS 108 âOperating Segmentsâ.Segment revenue from âManufacturing of Auto Componentsâ
represents revenue generated from external customers which is attributable to the Company''s country of domicile i.e. India and external
customers outside India as under:
53 FINANCIAL INSTRUMENT DISCLOSURE
(a) Capital management
The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long term and short
term goals of the Company, safeguard their ability to continue as a going concern, so that they can continue to provide returns
for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short
term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long
term and short term bank borrowings.
The Company monitors capital using a ratio of net debt to equity. For this purpose, net debt is defined as liabilities, comprising
interest-bearing loans less cash and cash equivalents, other bank balances (including earmarked balances) and current
investments. Equity comprises all components of equity.
(b) Disclosures
This section gives an overview of the significance of financial instruments for the Company and provides additional information
on balance sheet items that contain financial instruments.
The details of material accounting policies information, including the criteria for recognition, the basis of measurement and the
basis on which income and expenses are recognized in respect of each class of financial asset, financial liability and equity
instrument are disclosed in Note 4(xvi),(xvii) and (xviii).
(ii) Fair value measurement
This note provides information about how the Company determines fair values of various financial assets and liabilities.
Fair value measurements under Ind AS are categorized as below based on the degree to which the inputs to the fair value
measurements are observable and the significance of the inputs to the fair value measurement in its entirety:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company can access
at measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either
directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the valuation of assets/liabilities.
(iii) Financial risk management objectives
The Company''s principal financial liabilities comprises of loans and borrowings, trade and other payables. The main purpose
of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include mutual funds,
trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed
to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company''s senior
management oversees the management of these risks. The senior management ensures that the Company''s financial risk
activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed
in accordance with the Company''s policies and risk objectives. The Company does not enter into or trade financial instruments,
including derivative financial instruments, for speculative purposes. 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 changes in market prices such as foreign exchange rates, interest rates and equity prices- will
affect the Company''s income or the value of its holdings of financial instrument. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters while optimizing the return. The major
components of market risk are foreign currency risk, interest rate risk and price risk.
(I) 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 Company undertakes transactions denominated in foreign currencies; consequently, exposures
to exchange rate fluctuations arise.
(II) 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 Company''s main interest rate risk arises from the long term borrowings with fixed rates. The
Company''s fixed rates borrowings are carried at amortized cost.
The Company invests the surplus fund generated from operations in mutual funds. Considering these mutual funds are short
term in nature, there is no significant interest rate risk.
The Company has laid policies and guidelines including tenure of investment made to minimize impact of interest rate risk.
(III) Price risk
The Company has deployed its surplus funds into units of mutual fund. The Company is exposed to NAV (net asset value)
price risks arising from investments in these funds. The value of these investments is impacted by movements in liquidity
and credit quality of underlying securities.
NAV price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to NAV price risks at the end of the reporting
period. If NAV prices had been 1% higher/lower:
Profit for the year ended March 31, 2025 would increase/decrease by '' 128.71 Lakhs (for the year ended March 31, 2024:
increase/decrease by '' 170.47 Lakhs).
(IV) Commodity Price Risk:
The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase
and manufacture of automotive parts.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.
The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial
loss from defaults. The Company''s exposure and wherever appropriate, the credit ratings of its counterparties are continuously
monitored and spread amongst various counterparties. Credit exposure is controlled by counterparty limits that are reviewed and
approved by the management of the Company. Financial instruments that are subject to concentrations of credit risk, principally
consist of balance with banks, investments in mutual funds, trade receivables and loans and advances. None of the financial
instruments of the Company result in material concentrations of credit risks.
Balances with banks were not past due or impaired as at the year end. In other financial assets that are not past dues and
not impaired, there were no indication of default in repayment as at the year end.
(c) Liquidity risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and availability of funding through an
adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity
position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves
projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial
assets & liabilities and monitoring balance sheet liquidity ratios.
(d) Terms and conditions of transactions with related parties:
(i) Transaction entered into with related party are made on terms equivalent to those that prevail in arm''s length transactions.
(ii) There is no allowance account for impaired receivables in relation to any outstanding balances and no expense has been
recognised in respect of impaired receivables due from related party.
(iii) All Outstanding balances payable / receivable at the year end are unsecured and will be settled in cash.
Additional regulated information required by Schedule III to the Companies Act 2013;
(a) 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)
(b) The Company does not have any Benami property held in its name and no proceedings have been initiated or pending against
the Company for holding any Benami property.
(c) (A) 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
(B) 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,
(d) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(e) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any
government authority during the year.
(g) The title deeds including agreements for all the immovable properties including leasehold land are in the name of the Company.
(h) Borrowings are made from banks/ FI on the basis of security of current asset. The returns or statements viz. Financial follow¬
up report/Financial report filed by the Company with such banks are in agreement with the unaudited books of account of the
Company for the said period.
(i) The Company has complied with the number of layers of companies as prescribed under clause (87) of section 2 of the Act
read with the Companies (Restriction on number of Layers) Rules, 2017.
60 Figures for the previous year have been regrouped, wherever necessary, to conform to the figures of the current period''s classification
in order to comply with the requirements of amended Schedule III to the Companies Act, 2013 effective from April 1,2024.
61 The Board of Directors have considered and recommended a dividend @ 50% i.e. '' 1 per equity share on face value of '' 2 per
equity share for the financial year 2024-25 subject to approval of members of the Company.
62 The standalone financial statement of the Company are approved by the Board of Directors in the meeting held on May 28, 2025.
As per our report of even date attached For and on behalf of the Board of Directors of
For K C Mehta & Co LLP Munjal Auto Industries Limited
Chartered Accountants Sudhir Kumar Munjal Anju Munjal Sunil Chinubhai Vakil
Firm Registration No. 106237W/W100829 Chairman & Managing Director Whole Time Director Chairman, Audit Committee
Chhaya M. Dave DIN - 00084080 DIN - 00007867 DIN:02527630
partner Place : Gurugram Place : Gurugram Place : Vadodara
Membership No 100434 Gauri Yagnesh Bapat Bramh Prakash Yadav
Company Secretary Chief Financial Officer
Place : Vadodara Place : Vadodara Place : Gurugram
Date : May 28, 2025 Date : May 28, 2025
Gratuity
In respect of Gratuity, a defined benefit plan, contributions are made to LIC''s Recognized Group Gratuity Fund Scheme.
It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at
the time of retirement or termination of the employment on completion of five years or death while in employment. The level
of benefit provided depends on the member''s length of service and salary at the time of retirement/termination age. The
most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out
as at March 31,2025 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation,
and the related current service cost and past service cost, were measured using the projected unit credit method. Each
year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results
of its annual review.
This plan typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and
salary risk.
(I) Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market
yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create
a plan deficit. However, the risk is partially mitigated by investment in LIC managed fund.
Mar 31, 2024
xv. Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.
Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.
Product warranty expenses
The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidences based on actions on product failures. The timing of outflows will vary as and when warranty claim will arise, being typically up to five years.
xvi. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value except trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through the Statement of Profit and Loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through the Statement of Profit and Loss are recognised immediately in the Statement of Profit and Loss.
xvii. Financial assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
(a) Financial assets at amortised cost
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently, these are measured at amortized cost using the effective interest method less any impairment losses.
(b) Equity investments at fair value through other comprehensive income:
Financial assets are measured at fair value through other comprehensive income (FVTOCI) if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding. These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognized directly in other comprehensive income, net of applicable income taxes.
Dividends from these equity investments are recognized in the Statement of Profit and Loss when the right to receive payment has been established.
When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.
(c) Financial assets at fair value through profit or loss
Financial assets are measured at fair value through Profit or Loss (FVTPL) unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through Profit or Loss are immediately recognised in the Statement of Profit and Loss.
(d) Impairment of financial assets
The Company assesses at each balance sheet date whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12 month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly since initial recognition.
(e) Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI), the difference between the assetâs carrying amount and the sum of the consideration received and receivable is recognised in the Statement of Profit and Loss.
xviii. Financial liabilities and equity instruments
Debt and equity instruments issued by Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
(a) Financial liabilities
Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the âFinance costsâ.
(b) Equity instruments
An equity instrument is any contract that evidences residual interests in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(c) Derecognition of financial liabilities
The Company derecognises financial liabilities when and only when the Companyâs obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the Statement of Profit and Loss.
xix. Research and development expenditure
Expenditure of capital nature are capitalised and expenses of revenue nature are charged to the Statement of Profit and Loss, as and when incurred.
xx. Statement of cash flows:
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activities.
5 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company accounting policies, which are described in note no. 4, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
(i) Critical judgments in applying accounting policies
The following are the areas of estimation uncertainty and critical judgements that the management has made in the process of applying the Companyâs accounting policies and that have the most significant effect on the amounts recognised in the standalone financial statements:-
(a) Evaluation of indicators for impairment of property, plant and equipment
The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline assetâs value, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset or poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment.
(ii) Assumptions and key sources of estimation uncertainty
(a) Assets and obligations relating to employee benefits
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ (income) include the discount rate, inflation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
(b) Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting period. As at March 31,2024 management assessed that the useful lives represent the expected utility of the assets to the Company. Further, there is no significant change in the useful lives as compared to previous year.
(c) Estimation of provision for warranty
Management estimates the related provision for future warranty claims based on certain percentages of revenue. The provision is based on historical information on the nature, frequency and average cost of warranty claims. Management also estimates regarding possible future outflow on servicing the customers for any corrective action in respect of product failure which is generally expected to be settled within a period of 1 to 5 years.The assumptions made in relation to the current period are consistent with those in the prior year. Factors that could impact the estimated claim information include the success of the Companyâs productivity and quality initiatives.
(d) Provision for price differences
The company recognises price difference payable to parties, where settlement is pending for final negotiation. It is provided on the basis of best estimate and management assessments, considering the past trades and various other factors. This provisions are reviewed on regular basis and adjusted with respective elements with statement of profit and loss from the adequacy and reasonability point of view.
Revenue is measured by the Company at the transaction price i.e. amount of consideration received/receivable from its customers. In determining the transaction price for the sale of products, the Company considers the effects of various factors such as volume-based discounts, price adjustments to be passed on to the customers based on various parameters like negotiations based on savings on materials / share of business, rebates etc provided to the customers. The Companyâs business also requires passing on these credits related to price adjustments and others to the customers for the sales made by the Company. The Company, at the year end, has provided for such price adjustments to be passed on to the customers based on agreed terms, negotiations undertaken, commercial considerations and other factors. This requires significant judgement and estimate in calculating the price adjustments to be recorded as at the year end.
(e) Provision for slow moving and obsolete items in Inventory valuation
Inventories are measured at the lower of cost and net realizable value. Write-down of inventories are calculated based on an analysis of foreseeable changes in demand, technology or market conditions to determine obsolete or excess inventories.
(f) Identification of leases, duration and value
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease and to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is rate of interest that the Company would have to pay to borrow over a similar term and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
48 EMPLOYEE BENEFITS
(a) Defined contribution plans
Contributions to defined contribution plan are recognized as expenses when contributions become due.
The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognized in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period. The major defined contribution plans operated by the Company are as below:
(i) Provident fund and pension
In accordance with the Employeeâs Provident Fund and Miscellaneous Provisions Act, 1952 eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employeesâ salary.
The contributions, as specified under the law, are made to the provident fund set up as an irrevocable trust by the Company, post contribution of amount specified under the law to Employee Provident Fund Organization on account of employee pension scheme.
(ii) Superannuation fund
The Company has a superannuation plan for the benefit of its employees. Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn.
Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The Company contributes up to 10% of the eligible employeesâ salary to the trust every year. Such contributions are recognized as an expense as and when incurred. The Company does not have any further obligation beyond this contribution.
(I) Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit. However, the risk is partially mitigated by investment in LIC managed fund.
(II) Interest rate risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the planâs debt investments.
(III) Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
(IV) Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
49 IMPAIRMENT OF ASSETS
In accordance with the Indian Accounting Standard (Ind AS-36) on âImpairment of Assetsâ the Company has, during the year, carried out an exercise of identifying the assets that may have been impaired in respect of cash generating unit in accordance with the said Indian Accounting Standard. Based on the exercise, no impairment loss is required as at March 31, 2024.
50 SEGMENT REPORTING
The Companyâs operations falls under single segment namely âManufacturing of Auto Componentsâ, taking into account the risks and returns, the organization structure and the internal reporting systems. The board of directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates the Companyâs performance, allocates resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore, there is no reportable segment for the Company as per the requirement of IND AS 108 âOperating Segmentsâ.Segment revenue from âManufacturing of Auto Componentsâ represents revenue generated from external customers which is attributable to the Companyâs country of domicile i.e. India and external customers outside India as under:
52 FINANCIAL INSTRUMENT DISCLOSURE (a) Capital management
The Companyâs capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company, safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long term and short term bank borrowings.
The Company monitors capital using a ratio of net debt to equity. For this purpose, net debt is defined as liabilities, comprising interest-bearing loans less cash and cash equivalents, other bank balances (including earmarked balances) and current investments. Equity comprises all components of equity.
(ii) Fair value measurement
This note provides information about how the Company determines fair values of various financial assets and liabilities.
Fair value measurements under Ind AS are categorized as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company can access at measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the valuation of assets/liabilities.
(iii) Financial risk management objectives
The Companyâs principal financial liabilities comprises of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include mutual funds, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The senior management ensures 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. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. 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 changes in market prices such as foreign exchange rates, interest rates and equity prices- will affect the Companyâs income or the value of its holdings of financial instrument. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return. The major components of market risk are foreign currency risk, interest rate risk and price risk.
(II) 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 main interest rate risk arises from the long term borrowings with fixed rates. The Companyâs fixed rates borrowings are carried at amortized cost.
The Company invests the surplus fund generated from operations in mutual funds. Considering these mutual funds are short term in nature, there is no significant interest rate risk.
The Company has laid policies and guidelines including tenure of investment made to minimize impact of interest rate risk.
(III) Price risk
The Company has deployed its surplus funds into units of mutual fund. The Company is exposed to NAV (net asset value) price risks arising from investments in these funds. The value of these investments is impacted by movements in liquidity and credit quality of underlying securities.
NAV price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to NAV price risks at the end of the reporting period. If NAV prices had been 1% higher/lower:
Profit for the year ended March 31,2024 would increase/decrease by '' 170.47 Lakhs (for the year ended March 31,2023: increase/decrease by '' 104.47 Lakhs).
(IV) Commodity Price Risk:
The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of automotive parts.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The Companyâs exposure and wherever appropriate, the credit ratings of its counterparties are continuously monitored and spread amongst various counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management of the Company. Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, investments in mutual funds, trade receivables and loans and advances. None of the financial instruments of the Company result in material concentrations of credit risks.
Balances with banks were not past due or impaired as at the year end. In other financial assets that are not past dues and not impaired, there were no indication of default in repayment as at the year end.
(c) Liquidity risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.
58 Additional regulated information required by Schedule III to the Companies Act 2013;
(a) 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)
(b) The Company does not have any Benami property held in its name and no proceedings have been initiated or pending against the Company for holding any Benami property.
(c) (A) 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
(B) 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,
(d) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(e) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(f) The company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any
government authority during the year.
(g) The title deeds including agreements for all the immovable properties including leasehold land are in the name of the Company.
(h) Borrowings are made from banks/ FI on the basis of security of current asset. The returns or statements viz. Financial followup report/Financial report filed by the Company with such banks are in agreement with the unaudited books of account of the Company for the said period.
(i) The Company has complied with the number of layers of companies as prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
59 The Board of Directors have considered and recommended a dividend @ 100% i.e. '' 2 per equity share on face value of '' 2 per equity share for the financial year 2023-24 subject to approval of members of the Company.
60 The standalone financial statement of the Company are approved by the Board of Directors in the meeting held on May 24, 2024.
For and on behalf of the Board of Directors of
As per our report of even date attached Munjal Auto Industries Limited
For K C Mehta & Co LLP
Chartered Accountants S? ^ Munja'' AT , Si! ^7â!? Va ¦
Firm Registration No 106237W/W100829 Chairman & Managing Director Whole Time Director Chairman, Audit Committee
y DIN - 00084080 DIN - 00007867 DIN: 02527630
Neela R. Shah
Partner Rakesh Johari B P Yadav
Membership No. 045027 Company Secretary Chief Financial Officer
Place : Vadodara Place : Vadodara
Date : May 24, 2024 Date : May 24, 2024
Mar 31, 2023
xv. Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.
Contingent liabilities are disclosed in the Financial Statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.
Product warranty expenses
The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidences based on actions on product failures. The timing of outflows will vary as and when warranty claim will arise, being typically up to five years.
xvi. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value except trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through the Statement of Profit and Loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through the Statement of Profit and Loss are recognised immediately in the Statement of Profit and Loss.
xvii. Financial assets
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
(a) Financial assets at amortised cost
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently, these are measured at amortized cost using the effective interest method less any impairment losses.
(b) Equity investments at fair value through other comprehensive income:
Financial assets are measured at fair value through other comprehensive income (FVTOCI) if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. These include financial assets that are equity instruments and are irrevocably designated as such upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognized directly in other comprehensive income, net of applicable income taxes.
Dividends from these equity investments are recognized in the Statement of Profit and Loss when the right to receive payment has been established.
When the equity investment is derecognized, the cumulative gain or loss in equity is transferred to retained earnings.
(c) Financial assets at fair value through profit or loss
Financial assets are measured at fair value through Profit or Loss (FVTPL) unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through Profit or Loss are immediately recognised in the Statement of Profit and Loss.
(d) Impairment of financial assets
The Company assesses at each balance sheet date whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to 12 month expected credit losses or at an amount equal to lifetime expected losses, if the credit risk on the financial asset has increased significantly since initial recognition.
(e) Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of a financial asset in its entirety (except for equity instruments designated as FVTOCI), the difference between the assetâs carrying amount and the sum of the consideration received and receivable is recognised in the Statement of Profit and Loss.
xviii. Financial liabilities and equity instruments
Debt and equity instruments issued by Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
(a) Financial liabilities
Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest method. Interest expense that is not capitalised as part of costs of an asset is included in the âFinance costsâ.
(b) Equity instruments
An equity instrument is any contract that evidences residual interests in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(c) Derecognition of financial liabilities
The Company derecognises financial liabilities when and only when the Companyâs obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the Statement of Profit and Loss.
xix. Research and development expenditure
Expenditure of capital nature are capitalised and expenses of revenue nature are charged to the Statement of Profit and Loss, as and when incurred.
xx. Statement of cash flows:
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activities.
5 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company accounting policies, which are described in note no. 4, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
(i) Critical judgments in applying accounting policies
The following are the areas of estimation uncertainty and critical judgements that the management has made in the process of applying the Companyâs accounting policies and that have the most significant effect on the amounts recognised in the standalone financial statements:-
(a) Evaluation of indicators for impairment of property, plant and equipment
The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline assetâs value, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset or poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Property, Plant and Equipment.
(ii) Assumptions and key sources of estimation uncertainty
(a) Assets and obligations relating to employee benefits
The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ (income) include the discount rate, inflation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.
(b) Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting period. As at March 31,2023 management assessed that the useful lives represent the expected utility of the assets to the Company. Further, there is no significant change in the useful lives as compared to previous year.
(c) Estimation of provision for warranty
Management estimates the related provision for future warranty claims based on certain percentages of revenue. The provision is based on historical information on the nature, frequency and average cost of warranty claims. Management also estimates regarding possible future outflow on servicing the customers for any corrective action in respect of product failure which is generally expected to be settled within a period of 1 to 5 years.The assumptions made in relation to the current period are consistent with those in the prior year. Factors that could impact the estimated claim information include the success of the Companyâs productivity and quality initiatives.
(d) Provision for price differences
The company recognises price difference payable to parties, where settlement is pending for final negotiation. It is provided on the basis of best estimate and management assessments, considering the past trades and various other factors. This provisions are reviewed on regular basis and adjusted with respective elements with statement of profit and loss from the adequacy and reasonability point of view.
(e) Provision for slow moving and obsolete items in Inventory valuation
Inventories are measured at the lower of cost and net realizable value. Write-down of inventories are calculated based on an analysis of foreseeable changes in demand, technology or market conditions to determine obsolete or excess inventories.
(f) Identification of leases, duration and value
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease and to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.
The discount rate is rate of interest that the Company would have to pay to borrow over a similar term and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.
47 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
(A) Contingent liabilities not provided for in respect of
In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Companyâs financial condition, results of operations or cash flows.
(i) The Company does not expect any reimbursements in respect of the above contingent liabilities.
(ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters above pending resolution of the arbitration/appellate proceedings.
(iii) Income tax
The Company is involved in tax disputes amounting to '' 95.04 (as at March 31,2022''93.66) Lakhs relating to Income Tax. This mainly relate to the disallowance under section 14A and Domestic Transfer Pricing of the Income Tax Act, 1961 and interest thereon which is pending at Appellate level.
(iv) Excise duty
The Excise Authorities had denied a CENVAT credit amounting to '' 29.38 Lakhs and imposed a penalty of '' 29.38 Lakhs for a period between June, 2008 to March, 2009 ('' 29.38 Lakhs and '' 29.38 Lakhs CENVAT credit and penalty respectively at March 31,2022) in respect of CENVAT credit availed on supplementary invoices raised by the Customer on account of material supplied by them. The Company is contesting the show cause notice.
(v) Sales tax
The total sales tax demands (including interest and penalty), that are being contested by the Company amount to '' 52.12 (as at March 31, 2022 '' 50.79) Lakhs. The details of the demands are as follows:
The Sales Tax authorities have denied input tax credit and levied interest and penalty thereon due to varied reasons aggregating to '' 33.21 (as at March 31,2022''31.89) Lakhs. The reasons for disallowing credit was mainly due to not allowing set off of taxes on LPG Gas and other materials used in manufacturing and also not allowing full deduction of taxes paid. Further, there is levy of purchase tax on purchase of LPG Gas. The matter is contested in appeal.
The Sales Tax authorities have demanded tax aggregating to '' 18.90 (as at March 31, 2022''18.90) Lakhs on account of tax being levied on inter-state stock transfers. The matter is contested in appeal.
(vi) Provident fund
There are numerous interpretative issues relating to the SC Judgement on Provident Fund dated February 28, 2019. The Company has evaluated the impact of said judgement and Company has made necessary provision in financials.
(a) Defined contribution plans
Contributions to defined contribution plan are recognized as expenses when contributions become due.
The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognized in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period. The major defined contribution plans operated by the Company are as below:
(i) Provident fund and pension
In accordance with the Employeeâs Provident Fund and Miscellaneous Provisions Act, 1952 eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employeesâ salary.
The contributions, as specified under the law, are made to the provident fund set up as an irrevocable trust by the Company, post contribution of amount specified under the law to Employee Provident Fund Organization on account of employee pension scheme.
(ii) Superannuation fund
The Company has a superannuation plan for the benefit of its employees. Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn.
Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The Company contributes up to 10% of the eligible employeesâ salary to the trust every year. Such contributions are recognized as an expense as and when incurred. The Company does not have any further obligation beyond this contribution.
(i) Gratuity
In respect of Gratuity, a defined benefit plan, contributions are made to LICâs Recognized Group Gratuity Fund Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the memberâs length of service and salary at the time of retirement/termination age. The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31,2023 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method. Each year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results of its annual review.
This plan typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
(I) Investment risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit. However, the risk is partially mitigated by investment in LIC managed fund.
(II) Interest rate risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the planâs debt investments.
(III) Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
50 IMPAIRMENT OF ASSETS
In accordance with the Indian Accounting Standard (Ind AS-36) on âImpairment of Assetsâ the Company has, during the year, carried out an exercise of identifying the assets that may have been impaired in respect of cash generating unit in accordance with the said Indian Accounting Standard. Based on the exercise, no impairment loss is required as at March 31, 2023.
51 SEGMENT REPORTING
The Companyâs operations falls under single segment namely âManufacturing of Auto Componentsâ, taking into account the risks and returns, the organization structure and the internal reporting systems. Segment revenue from âManufacturing of Auto Componentsâ represents revenue generated from external customers which is attributable to the Companyâs country of domicile i.e. India and external customers outside India as under:
(iii) Financial risk management objectives
The Companyâs principal financial liabilities comprises of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include mutual funds, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The senior management ensures 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. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. 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 changes in market prices such as foreign exchange rates, interest rates and equity prices- will affect the Companyâs income or the value of its holdings of financial instrument. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return. The major components of market risk are foreign currency risk, interest rate risk and price risk.
(I) 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 Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.
(II) 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 main interest rate risk arises from the long term borrowings with fixed rates. The Companyâs fixed rates borrowings are carried at amortized cost.
The Company invests the surplus fund generated from operations in mutual funds. Considering these mutual funds are short term in nature, there is no significant interest rate risk.
The Company has laid policies and guidelines including tenure of investment made to minimize impact of interest rate risk.
(III) Price risk
The Company has deployed its surplus funds into units of mutual fund. The Company is exposed to NAV (net asset value) price risks arising from investments in these funds. The value of these investments is impacted by movements in liquidity and credit quality of underlying securities.
NAV price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to NAV price risks at the end of the reporting period. If NAV prices had been 1% higher/lower:
Profit for the year ended March 31,2023 would increase/decrease by '' 104.47 Lakhs (for the year ended March 31,2022: increase/decrease by '' 117.22 Lakhs).
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The Companyâs exposure and wherever appropriate, the credit ratings of its counterparties are continuously monitored and spread amongst various counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management of the Company. Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, investments in mutual funds, trade receivables and loans and advances. None of the financial instruments of the Company result in material concentrations of credit risks.
(c) Liquidity risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.
The following tables detail the Companyâs remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
57 RELATED PARTY DISCLOSURES
(a) Name of related parties and description of their relationships are as under:
(A) Holding Company:
Thakurdevi Investments Private Limited
(B) Key Managerial Personnel:
Mr. Sudhir Kumar Munjal Chairman and Managing Director
Mrs. Anju Munjal Whole-time Director
Mr. Anuj Munjal Whole-time Director
Mr. B. P Yadav Chief Financial Officer
Mr. Rakesh Johari Company Secretary
Mr. Vikram Shah Independent Director
Mr. Naresh Kumar Chawla Independent Director
Mr. Mahendra Sanghvi Independent Director
Mr. Ramkisan Devidayal Independent Director
Mr. Sudesh Kumar Duggal Independent Director
Mr. Jal Ratanshaw Patel Independent Director
Ms. Avi Sabavala Independent Director
(C) Enterprise in which Directors and their relatives are directors/ partners / members / trustees:
Sara Training and Education LLP Sara Investment Services Private Limited
Thakurdevi Investments Private Limited Fetlock Traders Private Limited
Sara Investments Inder Mohini Bhasin Charitable Foundation
Sudhir Kumar & Sons HUF Munjal Auto Industries Limited Employees Gratuity Trust Account
Accelerated Learning Edutech Private Limited Munjal Auto Industries Limited Employees Superannuation Trust Account
(d) Terms and conditions of transactions with related parties:
(i) Transaction entered into with related party are made on terms equivalent to those that prevail in armâs length transactions.
(ii) There is no allowance account for impaired receivables in relation to any outstanding balances and no expense has been recognised in respect of impaired receivables due from related party.
(iii) All Outstanding balances are unsecured and are repayable/receivable in cash.
58 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)
59 The Company does not have any Benami property and no proceedings have been initiated or pending against the Company for holding any Benami property.
60 (A) 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
(B) 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,
61 The Board of Directors have considered and recommended a dividend @ 100% i.e. '' 2 per equity share on face value of '' 2 per equity share for the financial year 2022-23 subject to approval of members of the Company.
62 Figures for the previous year have been regrouped, wherever necessary, to conform to the figures of the current periodâs classification.
63 The standalone financial statement of the Company are approved by the Board of Directors in the meeting held on May 23, 2023.
For and on behalf of the Board of Directors of
As p;r,-ouM";po,oI.evfn P Munjal Auto Industries Limited
For K C Mehta & Co LLP 1
Chartered Accountants Sudhir Kumar Munjal Anju Munjal Vikram Shah
Firm Registration No 106237W/W100829 Chairman & Managing Director Whole Time Director Chairman, Audit Committee
DIN - 00084080 DIN - 00007867 DIN - 00007914
Neela R. Shah Rakesh Johari B P Yadav
Partner Company Secretary Chief Financial Officer
Membership No. 045027
Place : Vadodara Place : Gurugram
Date : May 23, 2023 Date : May 23, 2023
Mar 31, 2018
NOTES TO THE FINANCIAL STATEMENTS
|
Particulars |
For the year ended |
For the year ended |
|
March 31, 2018 |
March 31, 2017 |
|
|
Earnings per share |
||
|
Profit after tax for the year attributable to equity shareholders (Rs in Lacs) |
4,159.03 |
3,455.36 |
|
Weighted average number of equity shares (in Nos.) |
100,000,000 |
100,000,000 |
|
Basic and Diluted earnings per equity share (in Rs) |
4.16 |
3.46 |
|
Face Value per equity share (in Rs) |
2.00 |
2.00 |
Notes:
The Company has allotted 50,000,000 number of fully paid Bonus Shares on July 13, 2017 in the ratio of one equity share of Rs 2 each fully paid up for every one existing equity shares of Rs 2 fully paid up. In accordance with Ind AS 33, Earning per Share'', basic and diluted earnings per equity share have been adjusted for bonus issue for previous year.
40 Leases
The Company has obtained land, certain premises and furniture and fittings for its business operations under operating lease or leave and license agreements. These are generally not non-cancellable and periods range between 11-12 months and 99 years under leave and licence and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. These refundable security deposits have been valued at amortised cost under relevant Ind AS.
Lease payments are recognised in the Statement of Profit and Loss under "Rent" in Note 36.
41 Employee Benefits
(a) Defined Contribution Plans
Contributions to defined contribution plan are recognised as expenses when contributions become due.
The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period. The major defined contribution plans operated by the Company are as below:
(i) Provident fund and Pension
In accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952 eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees'' salary.
The contributions, as specified under the law, are made to the provident fund set up as an irrevocable trust by the Company, post contribution of amount specified under the law to Employee Provident Fund Organisation on account of employee pension scheme.
(ii) Superannuation fund
The Company has a superannuation plan for the benefit of its employees. Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn.
Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The Company contributes up to 10% of the eligible employees'' salary to the trust every year. Such contributions are recognised as an expense as and when incurred. The Company does not have any further obligation beyond this contribution.
The total expenses recognised in the Statement of Profit and Loss during the year are as under:
|
Particulars |
For the year ended March 31, 2018 |
(Amount Rs in Lacs) For the year ended March 31, 2017 |
|
Employer''s contribution to Provident and other Funds |
299.53 |
259.87 |
|
Employer''s contribution to Superannuation Fund |
84.45 |
82.58 |
|
Total |
383.98 |
342.45 |
(b) Defined Benefit Plan (i) Gratuity
In respect of Gratuity, a defined benefit plan, contributions are made to LIC''s Recognised Group Gratuity Fund Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the member''s length of service and salary at the time of retirement/termination age. The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31,2018 by a member firm of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method. Each year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results of its annual review.
This plan typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
(I) Investment Risk
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit. However, the risk is partially mitigated by investment in LIC managed fund.
(II) Interest Rate Risk
A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan''s debt investments.
(III) Longevity Risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
(IV) Salary Risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
Amounts recognized in the Financial Statements in respect of defined benefit plan are as follows:
|
(Amount Rs in Lacs) |
||
|
Particulars |
For the year ended |
For the year ended |
|
March 31, 2018 |
March 31, 2017 |
|
|
Service Cost |
||
|
Current Service Cost |
106.39 |
94.14 |
|
Past service cost and loss/(gain) on curtailments and settlement |
29.98 |
- |
|
Net interest expense/ (income) |
15.20 |
24.04 |
|
Components of defined benefit costs recognised in |
||
|
Employee Benefit Expenses |
151.57 |
118.18 |
|
Re-measurement on the net defined benefit liability: |
||
|
Actuarial (gains)/losses arising from changes in demographic assumptions |
- |
- |
|
Actuarial (gains)/losses arising from changes in financial assumptions |
(31.79) |
39.84 |
|
Actuarial (gains)/losses arising from experience adjustments |
2.01 |
19.52 |
|
Return on Plan Assets excluding amount included in net interest cost |
(5.21) |
(0.51) |
|
Components of Re-measurement |
(34.99) |
58.85 |
|
Total |
116.58 |
177.03 |
|
(Amount Rs in Lacs) |
||
|
Particulars |
For the year ended |
For the year ended |
|
March 31, 2018 |
March 31, 2017 |
|
|
The amount included in the balance sheet arising from the entity''s |
||
|
obligation in respect of its defined benefit plan is as follows: |
||
|
Present Value of funded defined benefit obligation |
1,174.07 |
1,032.07 |
|
Fair value of plan assets |
980.66 |
766.28 |
|
Net liability arising from defined benefit obligation |
193.41 |
265.79 |
|
Movements in the present value of the defined benefit obligation are as follows: |
||
|
Opening defined obligation |
1,032.07 |
868.48 |
|
Current service cost |
106.39 |
94.14 |
|
Interest cost |
61.86 |
57.06 |
|
Re-measurement (gains)/losses : |
||
|
Actuarial (gains)/ losses arising from changes in financial assumptions |
(31.79) |
39.84 |
|
Actuarial (gains)/ losses arising from experience adjustments |
2.01 |
19.52 |
|
Past Service Cost |
29.98 |
- |
|
Benefits paid |
(26.45) |
(46.97) |
|
Closing defined benefit obligation |
1,174.07 |
1,032.07 |
|
Movements in the fair value of plan assets are as follows: |
||
|
Opening value of plan assets |
766.28 |
513.16 |
|
Interest income |
46.66 |
33.02 |
|
Return on plan assets excluding amounts included in interest income |
5.21 |
0.51 |
|
Contributions by employer |
187.96 |
266.56 |
|
Benefits paid |
(25.45) |
(46.97) |
|
Closing defined benefit obligation |
980.66 |
766.28 |
Classification of Non-Current and Current Liability:
|
|
(Amount Rs in Lacs) |
||
|
Particulars |
As at |
As at |
As at |
|
March 31, 2018 |
March 31, 2017 |
April 1,2016 |
|
|
Non-Current liability |
117.50 |
106.39 |
94.14 |
|
Current liability |
75.91 |
159.40 |
261.18 |
|
Total |
| 193.41 |
265.79 |
355.32 |
|
The principal assumptions used for the purposes of the actuarial valuations were as follows: |
|||
|
Particulars |
As at March 31, 2018 |
As at March 31, 2017 |
As at April 1,2016 |
|
Mortality |
Indian Assured Lives Mortality (2006-08) Ultimate |
Indian Assured Lives Mortality (2006-08) Ultimate |
Indian Assured Lives Mortality (2006-08) Ultimate |
|
Withdrawal Rates |
Up to 25 years:10% from 26 to 35 years: 7.50% from 36 to 45 years: 5.00% from 46 to 55 years: 2.50% After 56 years: 1.00% |
Up to 25 years:10% from 26 to 35 years: 7.50% from 36 to 45 years: 5.00% from 46 to 55 years: 2.50% After 56 years: 1.00% |
Up to 25 years:10% from 26 to 35 years: 7.50% from 36 to 45 years: 5.00% from 46 to 55 years: 2.50% After 56 years: 1.00% |
|
Discount Rate (%) |
7.60% |
7.15% |
7.80% |
|
Salary escalation rate (%) |
7.50% |
7.50% |
7.50% |
|
Rate of Return on Plan Assets (%) |
7.60% |
7.15% |
7.80% |
|
|
(Amount Rs in Lacs) |
|
|
Particulars |
As at |
As at |
|
March 31, 2018 |
March 31, 2017 |
|
|
Thefair value of the plan assets attheend of the reporting period |
||
|
for each category are as follows: |
||
|
100%managed by insurer (Life Insurance Corporation of India) |
980.66 |
766.28 |
Fair value of Investment in Group of Insurance Company is taken asbookvalueon reporting date.
The actual return on plan assets of gratuity during the year is Rs 51.87 Lacs (during previous year ended March 31,2017: ? 33.53 Lacs)
Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and withdrawal rates. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring attheend of the reporting period, while holding all other assumptions constant.
|
(Amoun Rs in Lacs) |
||
|
Significant actuarial assumptions |
For the year ended |
For the year ended |
|
March 31, 2018 |
March 31, 2017 |
|
|
Discount Rate |
||
|
Impact due to increase of 50 basis points |
1,140.92 |
946.05 |
|
Impact due to decrease of 50 basis points |
1,209.51 |
1,000.93 |
|
Salary increase |
||
|
Impact due to increase of 50 basis points |
1,208.06 |
1,000.22 |
|
Impact due to decrease of 50 basis points |
1,141.63 |
946.10 |
|
Withdrawal Rate |
||
|
Impact due to increase of 10 percent |
1,173.88 |
972.98 |
|
Impact due to decrease of 10 percent |
1,173.00 |
971.83 |
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Sensitivity due to mortality are not material & hence impact of change not calculated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
|
(Amount Rs. in Lacs) |
||
|
Particulars |
As at |
As at |
|
March 31, 2018 |
March 31, 2017 |
|
|
Maturity Profile of Defined Benefit Obligations: |
||
|
Zero to Four years |
46.96 |
66.81 |
|
Four to Ten years |
306.14 |
236.56 |
|
Ten to Fifteen years |
63.97 |
55.55 |
|
Fifteen and above |
757.00, |
673.15 |
|
Accrued gratuity for left employees |
I |
- |
|
Total |
1,174.07 |
1,032.07 |
The Company expects to make acontribution of Rs 117.51 Lacs (as at March 31,2017:Rs 106.39 Lacs, as at April 1,2016:Rs 94.14 Lacs) to the defined benefit plans during the next financial year.
42 Impairment of Assets
In accordance with the Indian Accounting Standard (Ind AS-36) on "Impairment of Assets" the Company has, during the year, carried out an exercise of identifying the assets that may have been impaired in respect of cash generating unit in accordance with the said Indian Accounting Standard. Based on the exercise, no impairment loss is required as at March 31,2018.
43 Segment Reporting
The Company''s operations falls under single segment namely "Manufacturing of Auto Components", taking into account the risks and returns, the organization structureand the internal reporting systems. Segment revenuefrom "Manufacturing of Auto Components" represents revenue generated from external customers which is attributable to the Company''s country of domicile i.e. India and external customers outside India as under:
|
Particulars |
For the year ended March 31, 2018 |
For the year ended March 31, 2017 |
|
Revenue from: |
(Amount Rs in Lacs) | (Amount Rs in Lacs) |
|
Outside India |
139.56 |
551.38 |
|
In India |
105,507.58 |
92,418.02 |
All assets are located in the Company''s country of domicile i.e. India.
The Company''s significant revenues (more than 90%) are derived from single entity. The total revenue from such entities amounted to Rs. 1,00,102.52 Lacs (for the year ended March 31, 2017: Rs 87,343.59 Lacs)
44 Related Party Disclosures:
Name of related parties and description of their relationships are as under: (A) Holding Company:
Thakurdevi Investments Private Limited
|
(B) Key Managerial Personnel: |
|
|
Mr. Sudhir Kumar Munjal |
Chairman and Managing Director |
|
Mrs. Anju Munjal |
Whole-time Director |
|
Mr. Anuj Munjal |
Whole-time Director |
|
Mr. S. K. Sharma |
Chief Financial Officer |
|
Mr. Rakesh Johari |
Company Secretary |
|
Mr. Vikram Shah |
Independent Director |
|
Mr. Naresh Kumar Chawla |
Independent Director |
|
Mr. Mahendra Sanghvi |
Independent Director |
|
Mr. Ramkisan Devidayal |
Independent Director |
|
Mr. Sudesh Kumar Duggal |
Independent Director |
|
Mr. Jal Ratanshaw Patel |
Independent Director |
(C) Enterprise in which directors and their relatives are directors Sara Investment Private Limited The following transactions were carried out with the related parties in ordinary course of business during the year:
|
(Amount Rs. in Lacs) |
||||
|
Nature of Transaction |
Holding Company |
Enterprise in which directors and their relatives are directors |
Key Managerial personnel |
Total |
|
Remuneration paid |
- |
- |
817.43 |
817.43 |
|
(652.22) |
(652.22) |
|||
|
Mr. Sudhir Kumar Munjal |
- |
- |
272.17 |
272.17
|
|
(209.53) |
(209.53) |
|||
|
Mrs. Anju Munjal |
_ |
_ |
238.15 |
238.15 |
|
(190.84) |
(190.84) |
|||
|
Mr. Anuj Munjal |
- |
- |
238.15 |
238.15 |
|
- |
- |
(189.52) |
(189.52) |
|
|
Mr. S. K. Sharma |
- |
- |
50.07 |
50.07 |
|
- |
- |
(45.48) |
(45.48) |
|
|
Mr. Rakesh Johari |
- |
- |
18.89 |
18.89 |
|
- |
- |
(16.85) |
(16.85) |
|
|
Sitting Fees paid |
- |
- |
19.12 |
19.12 |
|
- |
- |
(18.28) |
(18.28) |
|
|
Mr. Vikram Shah |
- |
- |
4.72 |
4.72 |
|
- |
- |
(4.08) |
(4.08) |
|
|
Mr. Naresh Kumar Chawla |
- |
- |
3.40 |
3.40 |
|
- |
- |
(3.80) |
(3.80) |
|
|
Mr. Mahendra Sanghvi |
- |
- |
3.60 |
3.60 |
|
- |
- |
(3.80) |
(3.80) |
|
|
Mr. Ramkisan Devidayal |
_ |
_ |
3.80 |
3.80 |
|
- |
- |
(3.40) |
(3.40) |
|
|
Mr. Sudesh Kumar Duggal |
_ |
_ |
2.20 |
2.20 |
|
- |
- |
(1.40) |
(1.40) |
|
|
Mr. Jal Ratanshaw Patel |
- |
- |
1.40 |
1.40 |
|
- |
- |
(1.80) |
(1.80) |
|
|
Payments made by the Company on behalf of |
96.25 |
42.68 |
- |
(3.49) |
|
(5.29) |
(7.68) |
|||
|
Sara Investments |
. |
30.88 |
. |
. |
|
Sudhir Kumar & Sons HUF |
- |
(0.79) 11.80 |
- |
(3.49) |
|
- |
(6.89) |
- |
- |
|
|
Thakurdevi Investments Private Limited |
ed 96.25 |
- |
- |
138.93 |
|
(5.29) |
- |
- |
(9.30) |
|
|
Dividend Paid |
743.06 |
- |
- |
748.06 |
|
Thakurdevi Investments Private Limilted |
748.06 |
- |
- |
748.06 |
Amounts in bracket indicate previous year figures.
|
|
(Amount Rs in Lacs) |
||
|
Particulars |
As at |
As at |
As at |
|
|
March 31, 2018 |
March 31, 2017 |
April 1,2016 |
|
Remuneration payable |
34.01 |
83.72 |
33.37 |
|
Mr. Sudhir Kumar Munjal |
15.93 |
40.58 |
3.08 |
|
Mrs. Anju Munjal |
4.86 |
6.91 |
21.98 |
|
Mr. Anuj Munjal |
9.55 |
32.94 |
5.53 |
|
Mr. S. K. Sharma |
2.56 |
2.41 |
1.98 |
|
Mr. Rakesh Johari |
1.11 |
0.88 |
0.80 |
Category-wise break up of compensation to key management personnel during the year is as follows:
|
Particulars |
For the year ended March 31, 2018 |
For the year ended March 31, 2017 |
|
Short-term employee benefits |
728.17 |
571.48 |
|
Post-employment benefits (excluding Leave encashment) |
89.76 |
81.06 |
45 The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
46 The Company has a system of physical verification of Inventory and Stores on regular intervals and of Fixed assets in a phased manner to cover all items over a period of two years. Adjustment differences, if any, are carried out on completion of reconciliation.
47 Financial Instrument Disclosure: (a) Capital Management
The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company, safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital.
The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long term and short term bank borrowings.
The Company monitors capital using a ratio of net debt to equity. For this purpose, net debt is defined as liabilities, comprising interest-bearing loans less cash and cash equivalents, other bank balances (including earmarked balances) and current investments. Equity comprises all components of equity.
The table below summarises the capital, net debt and net debt to equity ratio of the Company.
|
|
(Amount Rs in Lacs) |
||
|
Particulars |
As at |
As at |
As at |
|
March 31, 2018 |
March 31, 2017 |
April 1,2016 |
|
|
Equity share capital |
2,000.00 |
1,000.00 |
1,000.00 |
|
Other Equity |
26,264.96 |
24,286.77 |
20,869.88 |
|
Total Equity (A) |
28,264.96 |
25,286.77 |
21,869.88 |
|
Non-current borrowings |
1,609.24 |
2,889.48 |
4,607.20 |
|
Short term borrowings |
8.69 |
59.82 |
781.61 |
|
Current maturities of long term borrowings |
1,258.61 |
1,463.97 |
1,607.33 |
|
Gross Debt (B) |
2,876.54 |
4,413.27 |
6,996.14 |
|
Gross Debt as above |
2,876.54 |
4,413.27 |
6,996.14 |
|
Less: Current investments |
6,266.17 |
4,807.45 |
2,326.94 |
|
Less: Cash and cash equivalents |
1,467.52 |
104.61 |
229.35 |
|
Less: Other balances with bank (including earmarked balances) |
104.93 |
95.48 |
126.62 |
|
Net Debt (C) |
(4,962.08) |
(594.27) |
4,313.23 |
|
Net debt to equity |
(0.18) |
(0.02) |
U.£U |
(b) Disclosures
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed inNote4(xii), (xiii) and (xiv).
(i) Financial assets and liabilities
The following tables presents each category of financial assets and liabilities as at March 31,2018, March 31,2017 and April 1, 2016.
|
|
(Amount Rs in Lacs) |
||
|
Particulars |
As at |
As at |
As at |
|
|
March 31, 2018 |
March 31, 2017 |
April 1,2016 |
|
I. Financial Assets |
|||
|
Measured at fair value through profit or loss (FVTPL) |
6,266.17 |
4,807.45 |
2,326.94 |
|
Measured at amortised cost |
|||
|
Trade and other receivables |
15,819.88 |
13,295.98 |
12,783.73 |
|
Cash and cash equivalents |
1,467.52 |
104.61 |
229.35 |
|
Other bank balances |
104.93 |
95.48 |
126.62 |
|
Loans |
236.79 |
231.40 |
233.54 |
|
Other financial assets |
7.26 |
10.29 |
9.52 |
|
Total |
23,902.55 |
18,545.21 |
15,709.70 |
II. Financial Liabilities
|
Measured at amortised cost |
|||
|
Long term borrowings |
1,609.24 |
2,889.48 |
4,607.20 |
|
Short term borrowings |
8.69 |
59.82 |
781.61 |
|
Trade payables |
13,550.68 |
10,295.79 |
9,312.79 |
|
Otherfinancial liabilities |
2,371.40 |
2,902.57 |
2,649.50 |
|
Total |
17,540.01 |
16,147.66 |
17,351.10 |
(ii) Fair value measurement
This note provides information about how the Company determines fair values of various financial assets and liabilities.
Fair value measurements under Ind AS are categorised as below based on thedegree to which the inputs to thefair value measurements are observable and the significance of the inputs to thefair value measurement in its entirety:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company can access at measurement date;
Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs forthe valuation of assets/liabilities.
Fair value of the Company''s financial assets that are measured atfair value on a recurring basis:
Followinq table qives information about how the fair values of the Company''s financial assets are determined:
|
(Amount Rs in Lacs) |
|||
|
Financial assets |
Fair value as at March 31, 2018 |
March 31, 2017 |
Fair value hierarchy |
|
Investment in mutual funds |
6,266.17 |
4,807.45 |
Level 1 |
Valuation technique and key input: NAV declared by respective Asset Management Companies.
Fair value of financial assets and financial liabilities that are not measured atfair value (but fair value disclosures are required):
Management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements exceptfair value of investments in mutual funds approximate their fair values.
There have been no transfers between Level 1 and Level 2 for the years ended March 31,2018, March 31,2017 and April 1,2016.
(iii) Financial risk management objectives
The Company''s principal financial liabilities comprises of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include mutual funds, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The senior management ensures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. 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 changes in market prices- such as foreign exchange rates, interest rates and equity prices- will affect theCompany''s income or the valueof its holdings of financial instrument. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return. The major components of market risk are foreign currency risk, interest rate risk and price risk.
(I) 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 Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.
Thecarrying amount of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
|
|
(Amount Rs in Lacs) |
||
|
Foreign Currency Exposure |
As At |
As At |
As At |
|
March 31, 201 8 |
March 31, 2017 |
April 1,2016 |
|
|
Assets |
17.40 |
248.62 |
216.64 |
|
Liabilities |
11.06 |
50.56 |
42.84 |
The Company has not entered in to any forward contracts to hedge its foreign exposures and therefore there are no outstanding forward contract at the year end (as at March 31,2017: Nil, as at April 1,2016: Nil)
Foreign Currency Sensitivity:
The Company is principally exposed to foreign currency risk against USD. Sensitivity of profit or loss arises mainly from USD denominated receivables and payables. As per management''s assessment of reasonable possible changes in the exchange rate of /- 5% between USD-INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items at the period end is presented below:
|
(Amount Rs in Lacs) |
||
|
USD sensitivity at year end |
For the year ended March 31, 2018 |
For the year ended March 31, 2017 |
|
Assets |
||
|
Weakening of INR by 5% |
0.87 |
12.43 |
|
Strengthening of I NR by 5% |
(0.87) |
(12.43) |
|
Liabilites |
||
|
Weakening of INR by 5% |
(0.55) |
(2.53) |
|
Strengthening of INR by 5% |
0.55 |
2.53 |
(II) 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 Company''s main interest rate risk arises from the long term borrowings with fixed rates. The Company''s fixed rates borrowings are carried at amortised cost.
The Company invests the surplus fund generated from operations in mutual funds. Considering these mutual funds are short term in nature, there is no significant interest rate risk.
The Company has laid policies and guidelines including tenure of investment made to minimise impact of interest rate risk.
(Ill) Price risk
The Company has deployed its surplus funds into units of mutual fund. The Company is exposed to NAV (net asset value) price risks arising from investments in these funds. The value of these investments is impacted by movements in liquidity and credit quality of underlying securities.
NAV price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to NAV price risks at the end of the reporting period. If NAV prices had been 1% higher/lower:
Profit for the year ended March 31, 2018 would increase/decrease by Rs 62.66 Lacs (for the year ended March 31, 2017: increase/decrease by Rs 48.07 Lacs)
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The Company''s exposure and wherever appropriate, the credit ratings of its counterparties are continuously monitored and spread amongst various counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management of the Company. Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, investments in mutual funds, trade receivables and loans and advances. None of the financial instruments of the Company result in material concentrations of credit risks.
Balances with banks were not past due or impaired as at the year end. In other financial assets that are not past dues and not impaired, there were no indication of default in repayment as at the year end.
The age analysis of trade receivables as of the balance sheet date have been considered from the due date and disclosed as under:
|
(Amount Rs in Lacs) |
|||
|
Particulars |
As At |
As At |
As At |
|
March 31, 201 8 |
March 31, 2017 |
April 1,2016 |
|
|
Within the credit period |
15,819.88 |
13,292.56 |
12,783.73 |
|
Upto 6 months past due |
- |
- |
- |
|
More than 6 months past due |
3.43 |
3.43 |
- |
|
Total |
15,823.31 |
13,295.99 |
12,783.73 |
The Company has used a practical expedient by computing the expected loss allowance for financial assets based on historical credit loss experience and adjustments for forward looking informations.
(c) Liquidity risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and availability of funding through an adequate amount of committed credit facilities to meet the obligations when due. Management monitors rolling forecasts of liquidity position and cash and cash equivalents on the basis of expected cash flows. In addition, liquidity management also involves projecting cash flows considering level of liquid assets necessary to meet obligations by matching the maturity profiles of financial assets & liabilities and monitoring balance sheet liquidity ratios.
The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
|
|
(Amount Rs in Lacs) |
||
|
Particulars |
1 month -1 year |
1 year -3 years |
More than 3 years |
|
As at March 31, 2018 |
|||
|
Long term borrowings |
1,258.61 |
1,609.24 |
- |
|
Short term borrowings |
8.69 |
- |
- |
|
Trade payables |
13,550.68 |
- |
- |
|
Otherfinancial liabilities |
1,112.79 |
- |
- |
|
Total |
15,930.77 |
1,609.24 |
- |
Compiled by: Dion Global Solutions Limited
MUNJAL AUTO
|
|
(Amount Rs in Lacs) |
|
|
Particulars |
1 month -1 year |
1 year- 3 years More than 3 years |
|
As at March 31, 2017 |
||
|
Long term borrowings |
1,463.97 |
2,764.34 125.14 |
|
Short term borrowings |
59.82 |
- |
|
Trade payables |
10,295.79 |
- |
|
Otherfinancial liabilities |
1,438.60 |
- |
|
Total |
13,258.18 |
2,764.34 125.14 |
The following table details the Company''s expected maturity for its non-derivative financial assets. The information included in the table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company''s liquidity risk management as the liquidity is managed on a net asset and liability basis. Ind AS 107.34,35 B11(e)
|
As at March 31, 2018 |
||
|
Trade and other receivables |
15,819.88 |
- |
|
Investments in Mutual funds |
6,266.17 |
- |
|
Loans |
78.29 |
158.50 |
|
Other financial assets |
7.26 |
- |
|
Total |
22,171.60 |
158.50 |
|
As at March 31, 2017 |
||
|
Trade and other receivables |
13,295.98 |
- |
|
Investments in Mutual funds |
4,807.45 |
- |
|
Loans |
74.75 |
156.65 |
|
Other financial assets |
10.29 |
- |
|
Total |
18,188.47 |
156.65 |
The Company has access to committed credit facilities as described below, of which Rs 66.29 Lacs were unused at the end of the reporting year (as at March 31,2017 Rs 72.78 Lacs). The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
|
(Amount in lacs) |
|
|
|
Unsecured bank overdraft facility, reviewed annually and payable at call |
As at March 31, 2018 |
As at March 31, 2017 |
|
Amount used |
2,877.21 |
4,237.67 |
|
Amount unused |
3,751.79 |
3,040.33 |
Mar 31, 2017
1.ADDITIONAL INFORMATIONS
A The Company as well as various industrial units in Waghodia have disputed their liability to pay octroi duty and hence the company deposited the amount of Rs. 15.45 lacs under protest which is held in a separate bank account in the name of Sarpanch, the Waghodia Gram Panchayat and the Company as the second party under a Court directive. By virtue of a subsequent notification of the State Government of Gujarat, the company, like other industrial units in the notified area of Waghodia, is not required to pay the octroi Duty from 19th July, 1997. The company believes it has no liability for octroi duty even for the earlier period. Association for Industrial Units in Waghodia has filed a suit for recovery of amounts paid under protest, which is still pending for final decision. Therefore, the said amount of Rs.15.45 lacs (Previous Year Rs.15.45 lacs) is included in Balance Sheet under the head âLoans & Advancesâ and no provision is made for liability of octroi in this respect. In the absence of clarity regarding rights of respective parties, interest credited by the bank amounting to Rs.20.11 lacs (Previous Year: Rs.18.39 lacs) on the aforesaid amount till 31st March 2017 is not accounted for.
B Nature of security and terms of repayment for long term secured borrowings including current maturities Nature of security Terms of Repayment
Term loan outstanding Rs.1.25 Crores Repayable in 20 equal quarterly installments of Rs.25
lacs commencing from September, 2013
Term loan outstanding Rs.6.12 Crores Repayable in 24 equal quarterly installments of Rs.46.88
lacs commencing from January, 2016.
Above loans are secured by way of mortgage/charge created on Fixed Assets of the Company''s plant at Bawal, District - Rewari, Haryana.
Term loan outstanding Rs.4.73 Crores secured by way of mortgage / Repayable in 20 equal quarterly installments of
charge created Plant and Machinery acquired out of the sanctioned Rs.78.75 lacs commencing from September, 2013 Term Loan for Waghodia, District- Vadodara, Gujarat.
Term loan outstanding Rs.6.33 Crores secured by way of mortgage / Repayable in initial two quarterly installments of Rs. 25
charge created Plant and Machinery acquired out of the sanctioned lacs and remaining 22 quarterly installment of Rs.66.00
Term Loan for Waghodia, District- Vadodara, Gujarat. lacs commencing from December, 2013
Term loan outstanding Rs.7.92 Crores secured by way of mortgage / Repayable in 24 equal quarterly installments of
charge created Plant and Machinery acquired out of the sanctioned Rs.41.66 Lacs commencing from January, 2016 Term Loan for Waghodia, District- Vadodara, Gujarat.
Term loan outstanding Rs.17.19 Crores secured by way of charge Repayable in 24 equal quarterly installments of
created on fixed assets funded out of term loan pertaining to the Rs. 114.58 lacs commencing from December, 2014 Company''s plant at Dharuhera, District - Rewari, Haryana.
C The Company has amounts due to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 as at 31st March, 2017 as identified to the extent of information available as per following details
N The Company has taken premises under operating lease. Rental expenses towards cancellable operating leases charged to profit and loss account amounts to Rs.1,31,12,485/- (previous year Rs.1,31,70,514/-)
O As the Company''s business activity falls within a single primary business segment viz. Automobile Parts and single geographical segment, the disclosure requirements of Accounting Standard (AS-17) âSegment Reportingâ, issued by the Institute of Chartered Accountants of India are not applicable.
P Related Party Disclosure
a) Key Management Personnel
Mr. Sudhir Kumar Munjal Chairman and Managing Director
Mrs. Anju Munjal Whole Time Director
Mr. Anuj Munjal Whole Time Director
b) Enterprise which has ability to control the Company
Thakurdevi Investments Pvt. Ltd. Holding Company
Mar 31, 2016
2.28 ADDITIONAL INFORMATIONS
A Addition to Fixed Assets and Capital work in progress during the year included Rs.Nil (previous year Rs.89,26,780/-) being borrowing cost capitalized in accordance with Accounting standard (AS-16) on borrowing cost as specified in the Companies (Accounting Standard) Rules, 2006.
B The Company as well as various industrial units in Waghodia have disputed their liability to pay octroi duty and hence the Company deposited the amount of Rs. 15.45 Lacs under protest which is held in a separate bank account in the name of Sarpanch, the Waghodia Gram Panchayat and the Company as the second party under a Court directive. By virtue of a subsequent notification of the State Government of Gujarat, the Company, like other industrial units in the notified area of Waghodia, is not required to pay the octroi Duty from 19th July, 1997. The Company believes it has no liability for octroi duty even for the earlier period. Association for Industrial Units in Waghodia has filed a suit for recovery of amounts paid under protest, which is still pending for final decision. Therefore, the said amount of Rs.15.45 Lacs (Previous Year Rs.15.45 lacs) is included in Balance Sheet under the head âLoans & Advancesâ and no provision is made for liability of octroi in this respect. In the absence of clarity regarding rights of respective parties, interest credited by the bank amounting to Rs.18.39 Lacs (Previous Year: Rs.17.07 Lacs) on the aforesaid amount till 31st March 2016 is not accounted for.
M The Company has taken premises under operating lease. These lease agreements are normally for a period of less than one year. These are generally not ânon-cancellableâ and are renewable by mutually agreed terms. Rental expenses towards cancellable operating leases charged to profit and loss account amounts to Rs.1,31,70,514/- (previous year Rs.1,28,82,696/-)
N Segment Reporting
As the Company''s business activity falls within a single primary business segment viz. Automobile Parts and single geographical segment, the disclosure requirements of Accounting Standard (AS-17) âSegment Reportingâ, issued by the Institute of Chartered Accountants of India are not applicable.
Q Figures of the previous year have been regrouped and / or recast, wherever considered necessary to conform to the grouping of the current year.
Mar 31, 2015
1 Company Overview
Munjal Auto Industries Limited is a manufacturing company engaged in
manufacture of Exhaust systems, Wheels, Rims, Fuel tanks and other
components for Auto Industries.
2 Rights, preferences and restrictions attached to shares
The Company has only one class of shares referred to as equity shares
having a par value of Rs.2/- (Previous year Rs.2/-). Each holder of
Equity Shares is entitled to one vote per share.
3 ADDITIONAL INFORMATIONS
A Addition to Fixed Assets and Capital work in progress during the year
included Rs.89,26,780/- (previous year Rs.1,18,92,521/-) being
borrowing cost capitalised in accordance with Accounting Standard
(AS-16) on borrowing cost asspecified in the Companies (Accounting
Standard) Rules, 2006.
B The Company as well as various industrial units in Waghodia have
disputed their liability to pay octroi duty and hence the company
deposited the amount of Rs. 15.45 lac under protest which is held in a
separate bank account in the name of Sarpanch, the Waghodia Gram
Panchayat and the Company as the second party under a Court directive.
By virtue of a subsequent notification of the State Government of
Gujarat, the company, like other industrial units in the notified area
of Waghodia, is not required to pay the octroi Duty from 19th July,
1997. The company believes it has no liability for octroi duty even for
the earlier period. Association for Industrial Units in Waghodia has
filed a suit for recovery of amounts paid under protest, which is still
pending for final decision. Therefore, the said amount of Rs.15.45 Lac
(Previous Year Rs.15.45 lac) is included in Balance Sheet under the
head "Loans & Advances" and no provision is made for liability of
octroi in this respect. In the absence of clarity regarding rights of
respective parties, interest credited by the bank amounting to Rs.
17.07 Lac (Previous Year: Rs.15.83 Lac) on the aforesaid amount till
31st March 2015 is not accounted for.
C Details of Contingent Liabilities
I Unexpired Bank Guarantee
(Net of Margin Money) 3,308,000 6,188,000
II Unexpired Letter of Credit
(Net of Margin Money) 1,608,285 60,100,000
III Estimated amount of
Contracts remaining
to be executed on
Capital Account and
not provided for
(Net of Advances) 50,965,144 73,514,001
IV Estimated amount on
Account of pending
cases under the
Labour Laws 5,496,489 9,553,531
V Income Tax Matters
in dispute 4,764,957 8,400,087
VI Sales Tax Matters
in dispute 3,188,704 3,188,704
VII Excise Matters 23,696,013 5,901,332
D The Company has taken premises under operating lease. These lease
agreements are normally for a period of less than one year. These are
generally not "non-cancellable" and are renewable by mutually agreed
terms. Rental expenses towards cancellable operating leases charged to
profit and loss account amounts to Rs.1,28,82,696/- (previous year
Rs.1,28,61,012/-)
E Segment Reporting
As the Company''s business activity falls within a single primary
business segment viz. Automobile Parts and single geographical segment,
the disclosure requirements of Accounting Standard (AS-17) "Segment
Reporting", issued by the Institute of Chartered Accountants of India
are not applicable.
F Related Party Disclosure
a) Key Management Personnel
Mr. Sudhir Kumar Munjal Chairman & Managing Director
Mrs. Anju Munjal Whole Time Director
Mr. Anuj Munjal Whole Time Director
b) Enterprise which has ability to control the Company
Thakurdevi Investments Pvt. Ltd. Holding Company
G Pursuant to the enactment of the Companies Act, 2013 (The "Act''), the
company has applied and estimated useful life as specified in schedule
II. Accordingly the carrying value is being depreciated over the
revised / remaining useful life. The written down value after retaining
the residual value of fixed assets whose life have been expired as on
1st April, 2014 have been recognised net of tax in the opening retained
earnings.
H Figures of the previous year have been regrouped and / or recast,
wherever considered necessary to oonform to the grouping of the current
year.
Mar 31, 2014
1. Additional Informations
A Addition to Fixed Assets and Capital work in progress during the year
included Rs.1,18,92,521/- (previous year Rs.19,07,935/-) being
borrowing cost capitalised in accordance with Accounting standard (As
16) on borrowing cost as specified in the Companies (Accounting
Standard) Rules, 2006.
B Company has paid excise duty of Rs.23.61 lacs (previous year Rs.23.61
lacs) which is claimed by the company to be refundable and shown under
loans and advances. The company has filed an appeal and the matter is
pending with the Custom, Excise & Service tax Appellate Tribunal.
C The Company as well as various industrial units in Waghodia have
disputed their liability to pay octroi duty and hence the Company
deposited the amount of Rs. 15.45 lac under protest which is held in a
separate bank account in the name of Sarpanch, the Waghodia Gram
Panchayat and the Company as the second party under a Court directive.
By virtue of a subsequent notification of the State Government of
Gujarat, the company, like other industrial units in the notified area
of Waghodia, is not required to pay the octroi Duty from 19th
July,1997. The company believes it has no liability for octroi duty
even for the earlier period. Association for Industrial Units in
Waghodia has filed a suit for recovery of amounts paid under protest,
which is still pending for final decision. Therefore, the said amount
of Rs.15.45 Lac (Previous Year Rs.15.45 lac) is included in Balance
Sheet under the head and no provision is made for liability of octroi
in this respect. In the absence of clarity regarding rights of
respective parties, interest "Loans & Advances" credited by the bank
amounting to Rs.15.83 Lac (Previous Year: Rs.14.61 Lac) on the
aforesaid amount till 31st March 2014 is not accounted for.
D In respect of an interest-free LEEP loan availed at the time of the
setting up a project at Waghodia, Gujarat by the Company, GIIC (A
Government of Gujarat undertaking that had disbursed the said LEEP loan
on its behalf) had raised a claim of interest amounting to Rs.17 lac
payable since 1997. GIIC has claimed that there was a delay in
repayment of first 2 installments of the said LEEP loan repaid by the
company in earlier years. The Company disputed this. Negotiation in the
matter is continuing. Meanwhile, after adding interest @ 24% on the
aforesaid disputed amount of interest; GIIC has raised its claim
further to Rs. 194 Lac up to 31.12.05 (Previous Year: Rs. 194 Lac). No
provision is made in books of accounts for the above interest claim as
the Company expects that such a claim of GIIC is not tenable.
E These lease agreements are normally for a period of less than one
year. These are generally not Ânon-cancellable and are renewable by
mutually agreed terms. Rental expenses towards cancellable operating
leases charged to profit and loss account amounts to Rs.1,28,61,012/-
(previous year Rs.1,28,61,012/-)
F Other Income includes Rs.Nil (Previous year Rs. 1,83,00,000
represents amount received by the company on maturity of Key Man
Insurance policy). As the CompanyÂs business activity falls within a
single primary business segment viz. Automobile Parts and single
geographical
G Segment Reporting
segment, the disclosure requirements of Accounting Standard (AS-17)
ÂSegment ReportingÂ, issued by the Institute of Chartered Accountants
of India are not applicable.
H Figurs of the previous year have been regrouped and / or recast,
wherever considered necessary to conform to to the grouping of the
current year.`
Mar 31, 2013
Company Overview
Munjal Auto Industries Limited is a manufacturing company engaged in
manufacture of Exhaust systems, Wheels, Rims, Fuel tanks and other
components for Auto Industries.
1.1 Additional Informations
A Addition to Fixed Assets and Capital work in progress during the year
included Rs.19,07,935.00 (previous year Rs.Nil) being borrowing cost
capitalised in accordance with Accounting standard (As 16) on borrowing
cost as specified in the Companies (Accounting Standard) Rules, 2006.
B Company has paid excise duty of Rs.23.61 lacs (previous year Rs.23.61
lacs) which is claimed by the company to be refundable and shown under
loans and advances. The company has filed an appeal and the matter is
pending with the Custom, Excise & Service tax Appellate Tribunal.
C The Company as well as various industrial units in Waghodia have
disputed their liability to pay octroi duty and hence the company
deposited the amount of Rs. 15.45 lac under protest which is held in a
separate bank account in the name of Sarpanch, the Waghodia Gram
Panchayat and the Company as the second party under a Court directive.
By virtue of a subsequent notification of the State Government of
Gujarat, the company, like other industrial units in the notified area
of Waghodia, is not required to pay the octroi Duty from 19th
July,1997. The company believes it has no liability for octroi duty
even for the earlier period. Association for Industrial Units in
Waghodia has filed a suit for recovery of amounts paid under protest,
which is still pending for final decision. Therefore, the said amount
of Rs.15.45 Lac (Previous Year Rs.15.45 lac) is included in Balance
Sheet under the head "Loans & Advances" and no provision is made for
liability of octroi in this respect. In the absence of clarity
regarding rights of respective parties, interest credited by the bank
amounting to Rs.14.61 Lac (Previous Year: Rs.13.44 Lac) on the
aforesaid amount till 31st March 2012 is not accounted for.
D In respect of an interest-free LEEP loan availed by the Company at
the time of the setting up a project at Waghodia, Gujarat by the
company, GIIC (A Government of Gujarat undertaking that had disbursed
the said LEEP loan on its behalf) had raised a claim of interest
amounting to Rs.17 lac payable since 1997. GIIC has claimed that there
was a delay in repayment of first 2 installments of the said LEEP loan
repaid by the company in earlier years. The Company disputed this.
Negotiation in the matter is continuing. Meanwhile, after adding
interest @ 24% on the aforesaid disputed amount of interest; GIIC has
raised its claim further to Rs. 194 Lac up to 31.12.05 (Previous Year:
Rs. 194.00 Lac). No provision is made in books of accounts for the
above interest claim as the Company expects that such a claim of GIIC
is not tenable.
E The Company has taken premises under operating lease. These lease
agreements are normally for a period of less than one year. These are
generally not "non-cancellable" and are renewable by mutually agreed
terms. Rental expenses towards cancellable operating leases charged to
profit and loss account amounts to Rs.1,28,61,012/- (previous year
Rs.1,15,10,784/-)
F Other Income includes Rs.1,83,00,000 (Prevoius year Rs. Nil)
represents amount received by the company on maturity of Key Man
Insurance policy.
G Segment Reporting
As the Company''s business activity falls within a single primary
business segment viz. Automobile Parts and single geographical segment,
the disclosure requirements of Accounting Standard (AS-17) "Segment
Reporting", issued by the Institute of Chartered Accountants of India
are not applicable.
H Related Party Disclosure
a) Key Management Personnel
Mr. Sudhir Munjal Managing Director
Mrs. Anju Munjal Whole Time Director
Mr. Anuj Munjal Whole Time Director
b) Enterprise which has ability to control the Company
Thakurdevi Investments Pvt. Ltd. Holding Company
I Figures of the previous year have been regrouped and / or recast,
wherever considered necessary to conform to to the grouping of the
current year.
Mar 31, 2012
Amount due within one year are included in other current liabilities.
Terms of repayment of remaining amount are as under : Term Loan of Rs.
11.94 Crores repayable in remaining 13 equal quarterly installments.
Term Loan of Rs.9.92 Crores repayable in remaining 19 equal quarterly
installments.
Above two loans are secured by way of mortgage/charge created on
immovable fixed assets of the Company's undertaking at Bawal, District
- Rewari, Haryana.
Term Loan of Rs.14.20 Crores is repayable in remaining 18 equal
quarterly installments. This loan is secured by way of mortgage/ charge
created plant and machinery acquired out of the sanctioned term loan
for Waghodia (Fuel Tank) project, District- Waghodia, Gujarat.
Term Loan of Rs.12.75 Crores is repayable in remaining 10 equal
quarterly installment. This loan is secured by way of mortgage/ charge
created on immovable fixed assets of the Company's undertaking at
Haridwar, District - Haridwar, Uttarakhand.
A Details of Contingent Liabilities
For the year For the year
ended Mar, ended Mar,
31, 2012 31, 2011
I Unexpired Letters of Credit
(Net of Margin Money) - 22,336,338
II Unexpired Bank Guarantee
(Net of Margin Money) 1,496,000 1,496,000
III Estimated amount of Contracts remaining
to be executed on Capital Account and not
provided for (Net of Advances) 6,962,343 80,255,538
IV Estimated amount on Account of pending
cases under the Labour Laws 10,554,853 2,589,816
V Income Tax Matters in dispute 8,467,627 4,144,819
VI Sales Tax Matters in dispute 5,789,729 5,789,729
VII Excise Matters 5,901,332 5,901,332
B In respect of an interest-free LEEP loan availed by the company at
the time of the setting up a project at Waghodia, Gujarat by the
company, GIIC (A Government of Gujarat undertaking that had disbursed
the said LEEP loan on its behalf) had raised a claim of interest
amounting to Rs.17 lac payable since 1997. GIIC has claimed that there
was a delay in repayment of first 2 installments of the said LEEP loan
repaid by the company in earlier years. The Company disputed this.
Negotiation in the matter is continuing. Meanwhile, after adding
interest @ 24% on the aforesaid disputed amount of interest; GIIC has
raised its claim further to Rs. 194 Lacs up to 31.12.05 (Previous Year:
Rs. 194.00 Lacs). No provision is made in books of accounts for the
above interest claim as the Company expects that such a claim of GIIC
is not tenable.
I Related Party Disclosure
a) Key Management Personnel
Mr. Satyanand Munjal Chairman
Mr. Sudhir Munjal Managing Director
Mrs. Anju Munjal Whole Time Director
Mr. Anuj Munjal Whole Time Director
b) Enterprise which has ability to control the Company
Thakurdevi Investments Private Limited Holding Company
c) Enterprises over which Key Management Personnel and their relatives
are able to exercise significant influence Chopra Industries Private
Limited
Chopra Autotech Private Limited
Amar Autotech Private Limited (Formerly known as Amar Sons)
ii Defined Benefit Plans
The employees' gratuity fund scheme managed by a Trust is a defined
benefit plan. The present value of the obligation is determined based
on actuarial valuation using Projected unit credit method, which
recognises each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to biuld
up final obligation. The obligation for leave encashment is recognized
in the same manner as gratuity. The related details are as under:
C Segment Reporting
As the Company's business activity falls within a single primary
business segment viz. Automobile Parts and single geographical segment,
the disclosure requirements of Accounting Standard (AS-17) "Segment
Reporting", issued by the Institute of Chartered Accountants of India
are not applicable.
D The Company as well as various industrial units in Waghodia have
disputed their liability to pay octroi duty and hence the company
deposited the amount of Rs. 15.45 lacs under protest which is held in a
separate bank account in the name of Sarpanch, the Waghodia Gram
Panchayat and the Company as the second party under a Court directive.
By virtue of a subsequent notification of the State Government of
Gujarat, the company, like other industrial units in the notified area
of Waghodia, is not required to pay the octroi Duty from 19th July,
1997. The company believes it has no liability for octroi duty even for
the earlier period. Association for Industrial Units in Waghodia has
filed a suit for recovery of amounts paid under protest, which is still
pending for final decision. Therefore, the said amount of Rs.15.45 Lacs
(Previous Year Rs.15.45 lacs) is included in Balance Sheet under the
head "Loans & Advances" and no provision is made for liability of
octroi in this respect. In the absence of clarity regarding rights of
respective parties, interest credited by the bank amounting to Rs.13.44
Lacs (Previous Year: Rs.12.37 Lacs) on the aforesaid amount till 31st
March 2012 is not accounted for.
E Company has paid excise duty of Rs.23.61 lacs (previous year Rs.23.61
lacs) which is claimed by the company to be refundable and shown under
loans and advances. The company has filed an appeal and the matter is
pending with the Custom, Excise & Service tax Appellate Tribunal.
F Figures of the previous year have been regrouped and / or recast,
wherever considered necessary to conform to to the grouping of the
current year.
G The Company has amounts dues to Micro, Small and Medium Enterprises
under Micro, Small and Medium Enterprises Development Act, 2006 as at
31st March, 2012
H The Company has taken premises under operating lease. These lease
agreements are normally for a period of less than one year. These are
generally not "non-cancellable" and are renewable by mutually
agreed terms. Rental expenses towards cancellable operating leases
charged to profit and loss account amounts to Rs.1,15,10,784/-
(previous year Rs.1,11,06,265/-)
Mar 31, 2011
1. In respect of an interest-free LEEP loan availed by the Company at
the time of the setting up a project at Waghodia, Gujarat by the
Company, GIIC (A Government of Gujarat undertaking that had disbursed
the said LEEP loan on its behalf) had raised a claim of interest
amounting to Rs.17 lacs payable since 1997. GIIC has claimed that there
was a delay in repayment of first 2 installments of the said LEEP loan
repaid by the company in earlier years. The Company disputed this.
Negotiation in the matter is continuing.
Meanwhile, after adding interest @ 24% on the aforesaid disputed amount
of interest; GIIC has raised its claim further to Rs. 194 Lacs up to
31.12.05 (Previous Year: Rs. 194.00 Lacs). No provision is made in
books of accounts for the above interest claim as the Company expects
that such a claim of GIIC is not tenable.
2. As the Company's business activity falls within a single primary
business segment viz. Automobile Parts and single geographical segment,
the disclosure requirements of Accounting Standard (AS-17) ÃSegment
ReportingÃ, issued by the Institute of Chartered Accountants of India
are not applicable.
3. The Company as well as various industrial units in Waghodia have
disputed their liability to pay octroi duty and hence the company
deposited the amount of Rs. 15.45 lacs under protest which is held in a
separate bank account in the name of Sarpanch, the Waghodia Gram
Panchayat and the Company as the second party under a Court directive.
By virtue of a subsequent notification of the State Government of
Gujarat, the Company, like other industrial units in the notified area
of Waghodia, is not required to pay the octroi Duty from 19th July,
1997. The Company believes it has no liability for octroi duty even for
the earlier period. Association for Industrial Units in Waghodia has
filed a suit for recovery of amounts paid under protest, which is still
pending for final decision. Therefore, the said amount of Rs.15.45 Lacs
(Previous Year Rs.15.45 lacs) is included in Balance Sheet under the
head ÃLoans & Advancesà and no provision is made for liability of
octroi in this respect. In the absence of clarity regarding rights of
respective parties, interest credited by the bank amounting to Rs.12.37
Lacs (Previous Year: Rs.11.42 Lacs) on the aforesaid amount till 31st
March 2011 is not accounted for.
4. Company has paid excise duty of Rs.23.61 lacs (previous year
Rs.23.61 lacs) which is claimed by the Company to be refundable and
shown under loans and advances. The Company has filed an appeal and the
matter is pending with the Custom, Excise & Service tax Appellate
Tribunal.
5. Figures of the previous year have been regrouped and/or recast,
wherever considered necessary to conform to the groupings of the
current year.
6. The Company has taken premises under operating leases. These lease
agreements are normally for a period of less than one year. These are
generally not Ãnon-cancellableà and are renewable by mutual consent on
mutually agreed terms. Rental expenses towards cancellable operating
leases charged to profit & loss account amounts to Rs.1,11,06,265/-
(previous year Rs.1,04,98,982/-)
In determination of remuneration, certain perquisites have been valued
in accordance with the provisions of Income Tax Rules, 1962 applicable
when these were taxable. Expenses towards gratuity and leave encashment
provisions are determined acturially on an overall Company basis at the
end of the each year and accordingly, have not been considered in the
above.
II Additional Information pursuant to the provisions of 3, 4C and 4D
of Part II of Schedule VI of the Companies Act, 1956 :
(I) The installed capacity is as certified by the management and relied
upon by the auditors being a technical matter. The installed capacity
is calculated on triple shifts basis.
(ii) Actual production of various items depends on exact specifications
of the products. The quantities are indicative of production with
specifications, which are considered representative of estimated
average product mix.
Mar 31, 2010
1. In respect of an interest-free LEEP loan availed by the company at
the time of the setting up a project at Waghodia, Gujarat by the
company, GIIC (A Government of Gujarat undertaking that had disbursed
the said LEEP loan on its behalf) had raised a claim of interest
amounting to Rs.17 lac payable since 1997. GIIC has claimed that there
was a delay in repayment of first 2 installments of the said LEEP loan
repaid by the company in earlier years. The Company disputed this.
Negotiation in the matter is continuing. Meanwhile, after adding
interest @ 24% on the aforesaid disputed amount of interest; GIIC has
raised its claim further to Rs. 194 Lac up to 31.12.05 (Previous Year:
Rs. 194.00 Lac). No provision is made in books of accounts for the
above interest claim as the Company expects that such a claim of GIIC
is not tenable.
2. As the Companys business activity falls within a single primary
business segment viz. Motorcycles Parts and single geographical
segment, the disclosure requirements of Accounting Standard (AS-17)
"Segment Reporting", issued by the Institute of Chartered Accountants
of India are not applicable.
3. The Company as well as various industrial units in Waghodia have
disputed their liability to pay octroi duty and hence the company
deposited the amount of Rs. 15.45 lac under protest which is held in a
separate bank account in the name of Sarpanch, the Waghodia Gram
Panchayat and the Company as the second party under a Court directive.
By virtue of a subsequent notification of the State Government of
Gujarat, the company, like other industrial units in the notified area
of Waghodia, is not required to pay the octroi Duty from 19th
July,1997. The company believes it has no liability for octroi duty
even for the earlier period. Association for Industrial Units in
Waghodia has filed a suit for recovery of amounts paid under protest,
which is still pending for final decision. Therefore, the said amount
of Rs.15.45 Lac (Previous Year Rs.15.45 lac) is included in Balance
Sheet under the head "Loans & Advances" and no provision is made for
liability of octroi in this respect. In the absence of clarity
regarding rights of respective parties, interest credited by the bank
amounting to Rs.11.42 Lac (Previous Year: Rs.10.50 Lac) on the
aforesaid amount till 31st March 2010 is not accounted for.
4. Company has paid excise duty of Rs.23.61 lacs (previous year
Rs.23.61 lacs) which is claimed by the company to be refundable and
shown under loans and advances. The company has filed an appeal and the
matter is pending with the Custom, Excise & Service tax Appellate
Tribunal.
5. Expenditure on insurance includes Rs. NIL Lacs (previous year
Rs.17.91 Lacs) being premiums paid under Key man Insurance scheme to
cover risks on life of Key Management personnel (Total premium paid Rs.
112.68 lacs until 31.03.2010). Benefits to the Company under the said
scheme depend on various factors including resignation/survival of the
said personnel or premature surrender of the policy. Such benefits will
be accounted in the year in which they become due.
6. Figures of the previous year have been regrouped and/or recast,
wherever considered necessary to conform to the groupings of the
current year.
7. The company has taken premises under cancellable operating leases.
These lease agreements are normally for a period of less than one year.
Minimum future lease payments, payable as on March 31, 2010, are nil.
Rental expenses towards cancellable operating leases charged to profit
& loss account amounts to Rs.1,04,98,982/- (previous year
Rs.1,08,37,176/-)
8. Depreciation for the year ended 31st March, 2009 included a sum of
Rs.1,23,17,835/- on account of change in estimate of useful life of
vehicles.
9 Related Party Disclosure
a) Key Management Personnel
Mr. Satyanand Munjal Chairman
Mr. Sudhir Munjal Managing Director
Mrs. Anju Munjal Whole-time Director
b) Enterprises which are able to exercise significant influence over
the Company
Hero Cycles Limited
c) Enterprises over which key management personnel and their relatives
are able to exercise significant influence
Hero Honda Motors Limited
Rockman Cycle Industries Limited
Highway Cycles Industries Limited
Chopra Industries Private Limited
Majestic Auto Limited
Hero Corporate Services Limited
Satyam Auto Components Limited
Amarsons
Shivam Autotech Limited
Bhagyoday Investments Pvt. Ltd.
Munjal Investments Pvt. Ltd.
Puja Investments Pvt. Ltd.
Anadi Investments Pvt. Ltd.
Dayanand Munjal Investments Pvt. Ltd.
Hero Investments Pvt. Ltd.
Bahadur Chand Investments Pvt. Ltd.
Thakurdevi Investments Pvt. Ltd.
Munjal Acme Packaging Systems Ltd.
10 Disclosure pursuant to Accounting Standard - 15 (Revised) Employee
Benefits
ii Defined Benefit Plans
The employees gratuity fund scheme managed by a Trust is a defined
benefit plan. The present value of the obligation is determined based
on actuarial valuation using Projected unit credit method, which
recognises each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to biuld
up final obligation. The obligation for leave encashment is recognized
in the same manner as gratuity. The related details are as under;
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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