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Notes to Accounts of Shivam Autotech Ltd.
Mar 31, 2025
h) Provisions, Contingent Liabilities and
Contingent Assets
A provision is recognized if, as a result of a past
event, the Company has a present legal or
constructive obligation that can be estimated
reliably, and it is probable that an outflow of
economic benefits will be required to settle
the obligation. If the effect of the time value of
money is material, provisions are determined
by discounting the expected future cash flows
at a pre-tax rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. Where discounting
is used, the increase in the provision due to the
passage of time is recognized as a finance cost.
Contingent Liability is disclosed after careful
evaluation of facts, uncertainties and possibility
of reimbursement, unless the possibility of an
outflow of resources embodying economic
benefits is remote. Contingent liabilities are not
recognized but are disclosed in notes. Contingent
assets are not disclosed in the financial statements
unless an inflow of economic benefits is probable.
Provisions, contingent liabilities, and contingent
assets are reviewed at each reporting date and
adjusted to reflect the current best estimates.
i) Revenue from Contract with Customers
Revenue from contracts with customers is
recognized when control of the goods or services
are transferred (performance obligation) to
the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.
Goods and Service Tax (''GST'') is not received by
the Company on its own account. Rather, it is tax
collected on value added to the commodity by the
seller on behalf of the government. Accordingly, it
is excluded from revenue.
i) Revenue from Sale of goods-
The Company classifies all other liabilities
as non-current. Deferred tax assets and
liabilities are classified as non-current assets
and liabilities. The operating cycle is the
time between the acquisition of assets for
processing and their realisation in cash and
cash equivalents. The Company has identified
twelve months as its operating cycle.
ii) Warranty obligations
The Company typically provides warranties
for general repairs of defects that existed at
the time of sale, as required by law. These
assurance-type warranties are accounted
for under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets.
iii) Trade Receivables
Trade receivables are amounts due from
customers for goods sold or services
performed in the ordinary course of business.
They are generally due for settlement within
one year and therefore are all classified as
current. Where the settlement is due after
one year, they are classified as non-current.
Trade receivables are recognised initially
at the amount of consideration that is
unconditional unless they contain significant
financing components, when they are
recognised at fair value. The Company holds
the trade receivables with the objective
to collect the contractual cash flows and
therefore measures them subsequently at
amortised cost using the effective interest
method.
iv) Contract Assets
A contract asset is the entity''s right to
consideration in exchange for goods or
services that the entity has transferred to
the customer. A contract asset becomes
a receivable when the entity''s right to
consideration is unconditional, in such cases
only the passage of time is required before
payment of the consideration is due. The
impairment of contract assets is measured,
presented and disclosed on the same basis
as trade receivables.
v) Contract Liability
A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an
amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or
services to the customer, a contract liability
is recognised when the payment is made
or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue
when the Company performs under the
contract.
J) Other Income
i) Interest
Interest is recognised using the effective
interest rate (EIR) method, as income for the
period in which it occurs. EIR is the rate that
exactly discounts the estimated future cash
payments or receipts over the expected life of
the financial instrument to the gross carrying
amount of the financial asset or to the
amortised cost of a financial liability. When
calculating the effectctive interest rate, the
Company estimates the expected cash flows
by considering all the contractual terms
of the financial instrument (for example,
security deposit, prepayment etc.) but does
not consider the expected credit losses.
ii) Duty drawback and export incentives
Income from export incentives is recognized
on an accrual basis.
iii) Insurance claim
Claims lodged with the insurance companies
are accounted on accrual basis to the extent
these are measurable and ultimate collection
is reasonably certain.
k) Employee Benefits
i) Short term employee benefits
Short-term employee benefits are expensed
as the related service is provided. A liability
is recognized for the amount expected
to be paid if the Company has a present
legal or constructive obligation to pay this
amount as a result of past service provided
by the employee and the obligation can be
estimated reliably.
ii) Defined contribution plans
Employees benefits in the form of the
Company''s contribution to Provident Fund,
Family Pension scheme and Employees State
Insurance are defined contribution schemes.
The Company recognizes contribution
payable to these schemes as an expense,
when an employee renders the related
service.
If the contribution payable exceeds
contribution already paid, the deficit payable
is recognized as a liability (accrued expense),
after deducting any contribution already
paid. If the contribution already paid exceeds
the contribution due for service before the
end of the reporting period. The Company
recognize that excess as an asset (prepaid
expense) to the extent that the prepayment
will lead to, for example, a reduction in future
payments or a cash refund.
iii) Defined benefit plans
Retirement benefits in the form of gratuity
are considered as defined benefit plans.
The Company''s net obligation in respect
of defined benefit plans is calculated by
estimating the amount of future benefit that
employees have earned in the current and
prior periods, discounting that amount and
deducting the fair value of any plan assets.
The company provides for its gratuity liability
based on actuarial valuation of the gratuity
liability as at the Balance Sheet date, based
on Projected Unit Credit Method, carried out
by an independent actuary. The Company
contributes to the gratuity fund, which
are recognized as plan assets. The defined
benefit obligation as reduced by fair value
of plan assets is recognized in the Balance
Sheet.
When the calculation results in a potential
asset for the company, the recognized asset
is limited to the present value of economic
benefits available in the form of any future
refunds from the plan or reductions in
future contributions to the plan. To calculate
the present value of economic benefits,
consideration is given to any applicable
minimum funding requirements.
Remeasurements comprising actuarial gains
and losses, changes in the fair value of plan
assets (excluding interest income), and
adjustments for the asset ceiling effect (if
applicable), are recognized immediately in
Other Comprehensive Income and are not
reclassified to profit or loss in subsequent
periods. Net interest expense (income) on
the net defined liability (assets) is computed
by applying the discount rate, used to
measure the net defined liability (asset), to
the net defined liability (asset) at the start of
the financial year after taking into account
any changes as a result of contribution
and benefit payments during the year. Net
interest expense and other expenses related
to defined benefit plans are recognized in
statement of profit or loss.
When the benefits of a plan are changed or
when a plan is curtailed, the resulting change
in benefit that relates to past service or the
gain or loss on curtailment is recognized
immediately in statement of profit or loss.
The company recognizes gains and losses
on the settlement of a defined benefit plan
when the settlement occurs.
iv) Other long-term employee benefits
Employee benefits in the form of long term
compensated absences are considered
as long term employee benefits. The
Company''s net obligation in respect of
long-term employee benefits is the amount
of future benefit that employees have
earned in return for their service in the
current and prior periods. That benefit is
discounted to determine its present value.
Remeasurements are recognized in profit or
loss in the period in which they arise.
The liability for long term compensated
absences are provided based on actuarial
valuation as at the Balance Sheet date, based
on Projected Unit Credit Method, carried out
by an independent actuary.
l) Valuation of inventories
i) Finished goods : are valued at lower of
cost or net realizable value. Scrap is valued
at net realizable value. cost includes direct
materials and labour and a proportion of
manufacturing overheads based on normal
operating capacity. cost of Finished goods
includes excise duty.
ii) Work in progress : is valued at raw material
cost including proportionate production
overheads.
iii) Stores, spares and raw materials : are
valued at lower of cost or net realizable value.
However materials & other items held for
use in the production of inventories are not
written below cost if the finished products in
which they will be incorporated are expected
to be sold at or above cost. cost of purchases
is assessed on first in first out (FIFO) method.
Costs of raw materials and stores include
all costs of purchase, conversion, and other
costs incurred in bringing the inventories to
their present location and condition.
iv) Net realizable value : is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and estimated
costs necessary to make the sale.
Inventory is assessed for impairment at
each reporting date, and provision is made
for slow-moving, obsolete, or damaged
inventory to reflect net realizable value.
m) Foreign Exchange Transactions / Translations /
Hedge Accounting
Standalone financial statements have been
presented in Indian Rupees (''), which is the
Company''s functional and presentation currency.
⢠Initial recognition
Foreign currency transactions are recorded
on initial recognition in the functional
currency, using the exchange rate at the date
of the transaction.
⢠Conversion
Foreign currency monetary items are
retranslated using the exchange rate
prevailing at the reporting date. Non¬
monetary items, which are measured in
terms of historical cost denominated in a
foreign currency, are reported using the
exchange rate at the date of the transaction.
Non-monetary items, which are measured
at fair value or other similar valuation
denominated in a foreign currency, are
translated using the exchange rate at the date
when such value was determined. Exchange
differences on monetary items related to
foreign operations are recognized in profit
or loss, except those that form part of the
net investment in a foreign operation, which
are recognized in Other Comprehensive
Income (OCI) and accumulated in a separate
component of equity until disposal.
⢠Exchange differences
The gain or loss arising on translation of
non-monetary items measured at fair value
is treated in line with the recognition of the
gain or loss on the change in fair value of the
item (i.e., translation differences on items
whose fair value gain or loss is recognized
in OCI or profit or loss are also recognized in
OCI or profit or loss, respectively).
n) Borrowing costs
Borrowing costs are interest and other ancillary
costs (including exchange differences relating to
foreign currency borrowings to the extent that
they are regarded as an adjustment to interest
costs) incurred in connection with the borrowing
of funds.
General and specific borrowing costs attributable
to acquisition and construction of any qualifying
asset (one that takes a substantial period of
time to get ready for its designated use or sale)
are capitalized until such time as the assets are
substantially ready for their intended use or sale,
and included as part of the cost of that asset. All
the other borrowing costs are recognized in the
Statement of Profit and Loss within Finance costs
of the period in which they are incurred.
Capitalization of borrowing costs commences
when expenditure for the qualifying asset is being
incurred, borrowing costs are being incurred, and
activities necessary to prepare the asset for its
intended use or sale are in progress. Capitalization
of borrowing costs is suspended during extended
periods in which active development of the
qualifying asset is interrupted. Capitalization
ceases when substantially all the activities
necessary to prepare the qualifying asset for its
intended use or sale are complete.
o) Income tax
Income tax expense comprises current and
deferred tax. It is recognized in profit or loss except
to the extent that it relates to items recognized
directly in equity or in Other Comprehensive
Income.
i) Current tax
Current tax comprises the expected tax
payable or receivable on the taxable income
or loss for the year after taking credit of the
benefits available under the Income Tax
Act and any adjustment to the tax payable
or receivable in respect of previous years.
It is measured using tax rates enacted or
substantively enacted at the reporting date.
Current tax assets and liabilities are offset
only if, the Company:
a) has a legally enforceable right to set off
the recognized amounts; and
b) intends either to settle on a net basis, or
to realize the asset and settle the liability
simultaneously.
ii) Deferred tax
Deferred tax is the tax expected to be payable
or recoverable on differences between the
carrying values of assets and liabilities in the
financial statements and the corresponding
tax bases used in the computation of taxable
profit and is accounted for using the balance
sheet liability method. Deferred tax liabilities
are generally recognized for all taxable
temporary differences. In contrast, deferred
tax assets are only recognized to the extent
that it is probable that future taxable profits
will be available against which the temporary
differences can be utilized.
The carrying value of deferred tax assets is
reviewed at the end of each reporting period
and reduced to the extent that it is no longer
probable that sufficient taxable profits will
be available to allow all or part of the asset to
be recovered.
Deferred tax is calculated at the tax rates that
are expected to apply in the period when the
liability is settled or the asset is realized based
on the tax rates and tax laws that have been
enacted or substantially enacted by the end
of the reporting period. The measurement of
deferred tax liabilities and assets reflects the
tax consequences that would follow from
the manner in which the Company expects,
at the end of the reporting period, to cover
or settle the carrying value of its assets and
liabilities.
Deferred tax assets and liabilities are offset
only if:
i) The entity has a legally enforceable
right to set off current tax assets against
current tax liabilities; and
ii) The deferred tax assets and the deferred
tax liabilities relate to income taxes
levied by the same taxation authority
on the same taxable entity.
Deferred tax assets include Minimum
Alternate Tax (MAT) paid in accordance
with the tax laws in India, which is likely
to give future economic benefits in the
form of availability of set off against
future income tax liability. MAT is
recognized as deferred tax assets in the
Balance Sheet when the asset can be
measured reliably and it is probable that
the future economic benefit associated
with the asset will be realized.
p) Segment Reporting
The Company''s operating businesses are
organized and managed separately according to
the nature of products manufactured and services
provided, with each segment representing
a strategic business unit that offers different
products. The analysis of geographical segments
is based on the areas in which major operating
divisions of the Company operate. The reportable
segments have been identified based on the
significant components of the enterprise for
which discrete financial information is available
and are reviewed by the Chief operating decision
maker (CODM) to assess the performance and
allocate resources to the operating segments.
Refer Note -39.
q) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank
and on hand and short-term deposits with original
maturities of three months or less that are readily
convertible to known amounts of cash and which
are subject to an insignificant risk of changes in
value.
Cash and cash equivalents also include balances
held as margin money or security against
borrowings only to the extent that they are
repayable on demand.
Bank overdrafts that are repayable on demand
and form an integral part of the Company''s cash
management are included as a component of
cash and cash equivalents for the purpose of the
Statement of Cash Flows.
r) Cash flow statement
Cash flows are reported using the indirect
method as explained in the Accounting Standard
on Statement of Cash Flows (Ind AS - 7), whereby
profit for the period 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 from operating, investing
and financing activities of the Company are
segregated and presented separately to provide
clear information on the Company''s sources and
uses of cash.
Cash flows from operating activities represent
the cash generated from the principal revenue-
producing activities of the Company. Investing
activities relate to the acquisition and disposal
of long-term assets and other investments not
included in cash equivalents. Financing activities
result in changes in the size and composition of
the contributed equity and borrowings of the
Company.
s) Dividend
The Company recognises a liability to pay
dividend to equity holders of the Company
when the distribution is authorised, and the
distribution is no longer at the discretion of the
Company. As per the corporate laws in India, a
distribution is authorised when it is approved
by the shareholders. A corresponding amount is
recognised directly in equity.
t) Ind AS - 116 Lease
Ind AS 116 requires lessees to determine the lease
term as the non-cancellable period of a lease
adjusted with any option to extend or terminate
the lease, if the use of such option is reasonably
certain. The Company makes an assessment on
the expected lease term on a lease-by-lease basis
and thereby assesses whether it is reasonably
certain that any options to extend or terminate
the contract will be exercised. In evaluating
the lease term, the Company considers factors
such as any significant leasehold improvements
undertaken over the lease term, costs relating to
the termination of the lease and the importance
of the underlying asset to Company''s operations
taking into account the location of the underlying
asset and the availability of suitable alternatives.
The lease term in future periods is reassessed to
ensure that the lease term reflects the current
economic circumstances. After considering
current and future economic conditions, the
company has concluded that no changes are
required to lease period relating to the existing
lease contracts.
The Company as a lessee
The Company''s lease asset classes primarily
consist of leases for buildings. The Company
assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control
the use of an identified asset for a period of time
in exchange for consideration. To assess whether a
contract conveys the right to control the use of an
identified asset, the Company assesses whether:
(i) the contract involves the use of an identified
asset (ii) the Company has substantially all of the
economic benefits from use of the asset through
the period of the lease and (iii) the Company has
the right to direct the use of the asset.
At the date of commencement of the lease,
The Company recognizes a right-of-use asset
and a corresponding lease liability at the lease
commencement date for all leases where it acts
as a lessee, except for short-term leases (lease
term less than 12 months) and leases of low-value
assets. Lease liabilities are measured at the present
value of lease payments, discounted using the
Company''s incremental borrowing rate where the
implicit rate is not readily determinable. For these
short-term and low value leases, the Company
recognizes the lease payments as an operating
expense on a straight-line basis over the term of
the lease.
Certain lease arrangements include the options
to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities
includes these options when it is reasonably
certain that they will be exercised.
The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date
of the lease plus any initial direct costs less any
lease incentives. They are subsequently measured
at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset. Right of use assets are evaluated
for recoverability whenever events or changes
in circumstances indicate that their carrying
amounts may not be recoverable. For the purpose
of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and
the value-in-use) is determined on an individual
asset basis unless the asset does not generate
cash flows that are largely independent of those
from other assets. In such cases, the recoverable
amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized
cost at the present value of the future lease
payments. The lease payments are discounted
using the interest rate implicit in the lease or, if
not readily determinable, using the incremental
borrowing rates in the country of domicile of
these leases. Lease liabilities are re-measured with
a corresponding adjustment to the related right of
use asset if the Company changes its assessment
if whether it will exercise an extension or a
termination option. Lease liability and ROU asset
have been separately presented in the Balance
Sheet and lease payments have been classified as
financing cash flows.
The Company as a lessor
Leases for which the Company is a lessor is
classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other
leases are classified as operating leases. When the
Company is an intermediate lessor, it accounts for
its interests in the head lease and the sublease
separately. The sublease is classified as a finance
or operating lease by reference to the right-of-use
asset arising from the head lease. For operating
leases, rental income is recognized on a straight
line basis over the term of the relevant lease.
u) Earning per share
Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable
to equity shareholders by the weighted average
number of equity shares outstanding during the
year.
For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential equity shares.
Potential equity shares are deemed to be dilutive
only if their conversion to equity shares would
decrease earnings per share or increase loss per
share from continuing operations.
v) Government grants
Government grants are recognized at fair value
when there is reasonable assurance that the
Company will comply with the conditions
attached to them and the grants will be received.
Grants related to assets are initially recorded as
deferred income and recognized in the statement
of profit and loss over the useful life of the
related asset, while revenue-related grants are
recognized in profit or loss on a systematic basis
in the periods in which the related expenses are
incurred. Government grants related to PPE are
treated as deferred income (included under non¬
current liabilities with current portion considered
under current liabilities) and are recognized and
credited in the Statement of Profit and Loss on a
systematic and rational basis over the estimated
useful life of the related asset and included under
"Other operating income". Government grants
related to revenue nature are recognized on a
systematic basis in the Statement of profit and
loss over the periods necessary to match them
with the related costs which they are intended
to compensate and are adjusted with the
related expenditure. If not related to a specific
expenditure, it is taken as income and presented
under "Other operating income"
w) Recent Pronouncements
Ministry of Corporate Affairs ("MCA") notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
During the year ended March 31, 2025, MCA has
notified Ind AS 117- Insurance Contracts and
amendments to IndAS 116-Leases, relating to sale
and lease back transactions, applicable from April
1, 2024. The Company has assessed that there is
no significant impact on its financial statements.
On May 9, 2025, MCA notified the amendments
to Ind AS 21- Effects of changes in Foreign
Exchange Rates. These amendments aim to
provide clearer guidance on assessing currency
exchangeability and estimating exchange rates
when currencies are not readily exchangeable.
The amendments are effective for annual periods
beginning on or after April 1, 2025. The company
is currently assessing the probable impact of
these amendments on its financial statements.
i) Terms & right attached to equity shares
a) The Company has only one class of equity shares having par value of Rs. 2/- per share. Each shareholder of
equity shares is entitled to one vote per share. The company declares dividends in Indian Rupees. During
the year ended March 31, 2025, the amount of dividend per share recognised as distributed to equity
shareholder was Rs NIL ( March 31, 2024 Rs.NIL).
b) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares
bought back during the period of five years immediately preceding the reporting date.-Nil.
c) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining
assets of the company after distribution of the preferencial amount,if any. The distribution will be in
proportion to the number of equity shares held by the shareholders.
d) The Board of Directors, at its meeting held on February 20, 2025, approved the allotment into 92,72,997
(Ninety-Two Lakhs Seventy-Two Thousand Nine Hundred Ninety-Seven) fully paid-up equity shares as per
the terms of conversion of Optionally Convertible Debentures into equity shares.
Interest on above demands is not computed and demanded by the department, therefore interest amount is not
included above except otherwise stated.
* The Traces demands have been extracted from the traces online portal and income tax demands have been extracted
from the income tax online portal.
Contingent liabilities and claims against the Company not acknowledged as debts related to various matters.
i) In respect of above matters, future cash outflows are determinable only on receipt of judgements / decisions
pending at various forums / authorities.
ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where
provisions are required and disclosed as contingent liabilities where applicable in its financial statements. The
Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial
position.
35 Segment Information
(i) General Disclosure
The Company is primarily in the business of manufacture and sale of components to automotive original
equipment manufacturers. Hence there is only one identified reportable segments as per Ind As 108 - Segment
reporting.
The above reportable segments have been identified based on the significant components of the enterprise for
which discrete financial information is available and are reviewed by the Chief operating decision maker (CODM)
to assess the performance and allocate resources to the operating segments.
36 Employee Benefits - Gratuity & Post employement benefits
The Company has classified the various benefits provided to employees as under:-
A. Defined Contribution Plan
The Company makes contribution to Statutory Provident Fund and Employee State Insurance in accordance
with Employees Provident Fund and Miscellaneous Provision Act, 1952 and Employee State Insurance Act, 1948
respectively .This is post-employment benefit and is in the nature of defined contribution plan.
B. Defined Benefit Plan
Gratuity (being partly administered by a Trust) is computed as 15 days salary, for every recognized retirement
/ termination / resignation. The Gratuity plan for the company is a defined benefit scheme where annual
contributions as per actuarial valuation are charged to the statement of profit and loss.
The Company also has a leave encashment scheme with defined benefits for its employees. The Company makes
provision for such liability in the books of accounts on the basis of year end actuarial valuation. No fund has been
created for this scheme.
For summarizing the components of net benefit expense recognized in the statement of profit and loss and the
funded status and amounts recognized in the balance sheet for the respective plans, the details are as under:
any business. The primary focus is to foresee the unpredictability of financial markets and seek to minimize potential
adverse effects on its financial performance. The Company''s senior management oversees the management of
these risks and devise approrpiate risk management framework for the Company. The senior management provides
assurance 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.
Below notes explain the sources of risks in which the Company is exposed to and how it manages the risks:
A Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. The Company is exposed to the risk of movements in interest rates, inventory price and
foreign currency exchange rates that affects its assets, liabilities and future transactions. The Company is exposed
to following key market risks:
a) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate
because of changes in market interest rates. The Company''s main interest rate risk arises from long-term
borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During March
31, 2025 and March 31, 2024, the Company''s borrowings at variable rate were mainly denominated in INR.
Interest rate risk exposure - The exposure of the Company''s borrowing to interest rate changes at the end
of the reporting period are as follows:
b) Price Risk
Fluctuation in commodity price in global market affects directly and indirectly the price of raw material
and components used by the Company in its various products segment. Substantial pricing pressure from
major OEMs to give price cuts and inability to pass on the increased cost to customers may also affect the
profitability of the Company.
Key Raw material - As per the agreement with the customers, any increase in the raw material prices is
passed on to the customer. But in some cases where the customer was already asking for reduction in
prices, the company has to absorb the price increase.
B Credit risk:
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables and advances to suppliers) and from its financing activities, including deposits and other
financial instruments
The Company has developed guidelines for the management of credit risk from trade receivables. The Company''s
primary customers are major Indian automobile manufacturers (OEMs) with good credit ratings. Non-OEM
clients are subjected to credit assessments as a precautionary measure, and the adherence of all clients to
payment due dates is monitored on an on-going basis. An impairment analysis is performed at each reporting
date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into
homogeneous groups and assessed for impairment collectively. The calculation is based on historical data. The
maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets
disclosed in Note 44. The Company does not hold collateral as security except in case of few customers. The
Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located
in several jurisdictions and industries and operate in largely independent markets.
Credit risk from balances with banks and other financial asset is managed in accordance with the Company''s
approved investment policy. Investments of surplus funds are made only with approved counterparties and
within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on regular basis and
the said limits gets revised as and when appropriate. The limits are set to minimise the concentration of risks and
therefore mitigate financial loss through counterparty''s potential failure to make payments. The Company has
deposited liquid funds at various banking institutions. Primary banking institutions are major Indian and foreign
banks. In long term credit ratings these banking institutions are considered to be investment gradeAlso, no
impairment loss has been recorded in respect of ixed deposits that are with recognised commercial banks and
are not past due.
C Liquidity risk:
The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage
the liquidity risk, cash flow forecasting is performed in the operating divisions of the Company and aggregated
by Company finance. The Company''s finance monitors rolling forecasts of the Company''s liquidity requirements
to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn
committed borrowing facilities / overdraft facilities at all times so that the Company does not breach borrowing
limits or covenants (where applicable) on any of its borrowing facilities.
A - Company has opted to fair value its mutual fund investment through profit & loss
B - Company has opted to fair value its quoted investments in equity share through OCI
C - As per Para D-15 of Appendix D of Ind AS 101, the first time adopter may chose to measure its investment in
subsidiaries, JVs and Associates at cost or at fair value. Company has opted to value its investments in subsidiaries, JVs
and Associates at cost.
D - Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted
average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to
each loan has also been considered for calculating effective interest rate.
* In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings and other financial
assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term
maturities of these instruments.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair values of the financial assets and financial
liabilities included above have been determined in accordance with generally accepted pricing models based on a
discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of
counterparties
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
2 Capital Management
"For the purpose of the Company''s capital management, equity includes issued equity capital and all other equity
reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less
current investments and cash and cash equivalents. The Company''s objectives when managing capital is to 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 manages its capital structure and makes adjustments in light of changes in economic & financial
conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of
equity, internal accruals, long term borrowings and sho C30rt term borrowings. The Company monitors capital using
a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. During the year the Company has breached with these covenants. During the year lenders has imposed
the penalties towards non-fulfillment of the covenants as per the loan agreements and the same has duly been
accounted in financial statements wherever charged by the lenders.
43 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the
Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for
the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders, which are
under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject
rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes
effective and the related rules to determine the financial impact are published.
# Ratio deteriorate due to increase in operational expenses mainly consumption of raw material & stores spares.
## Ratio deteriorate due to decrease in operational profit caused mainly higher consumption of raw material & stores
spares.
45 Events occurring After the Balance Sheet date
No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization
of financial statements.
46 The Company is in the process of obtaining confirmations and reconciliation with its trade receivables, trade payables
and other dues receivables. The confirmations to the extent received have been reconciled and adjustments, if any,
have been made. The others are pending for confirmations, reconciliations and adjustments, if any. However, the
management does not expect any significant variations in the existing status.
47 Corporate Social Responsibility not applicable to the company due to loss incurred in last three years.
48 Previous year figures have been regrouped / reclassified wherever necessary to correspond with current year
classification/ disclosure.
49 i) The Company do not have any benami property, and no proceeding has been initiated against the Company for
holding any benami property.
ii) The Company do not have any transactions with companies struck off.
iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
iv) The Company have not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the company (ultimate beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vi) The Company have 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 Group shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the funding party (ultimate beneficiaries) or
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
vii) The Company have not 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
viii) The Company have not declared willful defaulter by any banks or any other financial institution at any time
during the financial year.
ix) All immovable properties are held in the name of the Company.
As per our report of even date attached
For NSBP & Co. For & on behalf of the Board of Directors of
Chartered Accountants Shivam Autotech Limited
Firm Regn. No. 001075N
Sd/- Sd/- Sd/-
Sanjay Kumar Agrawal Neeraj Munjal Charu Munjal
Partner Managing Director Whole Time Director
Membership Number: 089090 DIN : 00037792 DIN: 03094545
Sd/- Sd/-
Devendra Kumar Goyal Shakti Kant Mahana
Place : New Delhi Chief financial Officer Company Secretary
Dated: May 12, 2025 PAN No. AGNPG1981F M No A69273
Place : Gurugram
Dated: May 12, 2025
Mar 31, 2024
Significant management judgement is considered in determining deferred tax assets and liabilities and recoverability of deferred tax assets and Minimum Alternate Tax (MAT) entitlement of Rs.3106.81 Lakhs. The recoverability of deferred tax assets and Minimum Alternate Tax (MAT) entitlement is based on estimate of the taxable income for the period over which deferred tax assets and Minimum Alternate Tax (MAT) entitlement will be recovered. The Company has unabsorbed business depreciation and MAT credit which according to the management will be used to set off taxable profit arising in subsequent years from operation. However, As a matter of prudence, Deferred Tax Assets have been created till March 31, 2021 and no deferred tax has been created thereafter.
10.1 Quantitative variance were observed between physical and book records due to non-updation of Bill of Material (BOM) and expansion of the customer base. These Variance have been considered as consumption of material for the preparation of the financial statements.
10.2 Inventory Physical verification and inventory consumption
The Company has a regular programme of physical verification for its inventory and fixed assets. Further, during the year, physical verification of significant part of the inventory and fixed assets has been carried out by the management and discrepancies noticed on such verification have been appropriately adjusted in the financial statements.
i) Terms & right attached to equity shares
a) The Company has only one class of equity shares having par value of Rs. 2/- per share. Each shareholder of equity shares is entitled to one vote per share. The company declares dividends in Indian Rupees. During the year ended March 31, 2024, the amount of dividend per share recognised as distributed to equity shareholder was Rs NIL ( March 31, 2023 Rs.NIL).
b) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.-Nil.
c) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of the preferencial amount,if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
d) "The Board of Directors in its meeting held on August 14, 2023 considered and approved the issue of Optionally Convertible Debentures on a Private Placement. Further, pursuant to the provisions of Sections 23, 42, 62(1) (c) and all other applicable provisions, and other applicable provisions, if any, of the Companies Act, 2013 (the "Act") and in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (including any statutory modification(s) of re-enactments thereof for the time being in force on the terms and conditions as may be determined by the Board, a total amount of up to Rs. 2500.00 Lakhs (Rupees Twenty-Five Crores) by way of offer, issue and allot, on a preferential basis, by way of private placement up to 250 (Two Hundred Fifty) Secured Optionally Convertible Debentures ("OCDs") having face value of Rs. 10,00,000/- (Rupees Ten Lakhs only) each to India Credit Opportunities Fund II, a category II alternate investment fund, with its investment manager being Modulus Alternatives Investment Managers Limited (formerly known as Centrum Alternative Investment Managers Limited). The Investor has right entitled to exercise the conversion rights associated with OCDs at any time until the expiry of 18 (eighteen) months from the date of allotment of the OCDs in 1 (one) or more tranches but no later than 15 days prior to the expiry of 18 (eighteen) months from the date of allotment of the OCDs.
There are no differences in the figures reported in the quaterly returns/statement filed with the banks vis-a-vis the books of accounts. For the determination of Drawing power, the Company follow thw guidelines of the RBI prescribed for the commodities covered under selective credit control.
* There are no outstanding amounts payable beyond the agreed period to micro, small and medium enterprise as required by MSMED Act, 2006 to the extent interest liability on outstanding amount provided in financial statement as on the balance sheet date to the extent such enterprises have been identified based on information available with the Company. In view of this there is no overdue interest payable except already provided in financial statement.(Refer note 33)
|
31 |
Contingent Liabilities (not provided for) in respect of: |
|||
|
S.N. |
Particulars |
As at March 31, 2024 |
As at March 31, 2023 |
|
|
a) |
Letter of credit opened by banks |
413.38 |
401.54 |
|
|
b) |
PF Liability where the cases are pending at various stages of appeal with the authorities |
70.00 |
70.00 |
|
|
c) |
Bank Guarantees |
14.16 |
14.16 |
|
|
d) |
Sales tax / vat/ gst demand |
189.52 |
582.12 |
|
|
e) |
Traces demands * |
39.10 |
9.51 |
|
Interest on above demands is not computed and demanded by the department, therefore interest amount is not included above except otherwise stated.
* The Traces demands have been extracted from the traces online portal and income tax demands have been extracted from the income tax online portal.
Contingent liabilities and claims against the Company not acknowledged as debts related to various matters.
i) In respect of above matters, future cash outflows are determinable only on receipt of judgements / decisions pending at various forums / authorities.
ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
|
32 |
Commitments: |
|||
|
S.N. |
Particulars |
Year ended March 31, 2024 |
Year ended March 31, 2023 |
|
|
a) |
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) |
86.73 |
202.62 |
|
35 Segment Information (i) General Disclosure
The Company is primarily in the business of manufacture and sale of components to automotive original equipment manufacturers. Hence there is only one identified reportable segments as per Ind As 108 - Segment reporting.
The above reportable segments have been identified based on the significant components of the enterprise for which discrete financial information is available and are reviewed by the Chief operating decision maker (CODM) to assess the performance and allocate resources to the operating segments.
36 Employee Benefits - Gratuity & Post employement benefits
The Company has classified the various benefits provided to employees as under:-A. Defined Contribution Plan
The Company makes contribution to Statutory Provident Fund and Employee State Insurance in accordance with Employees Provident Fund and Miscellaneous Provision Act, 1952 and Employee State Insurance Act, 1948 respectively. This is post-employment benefit and is in the nature of defined contribution plan.
Gratuity (being partly administered by a Trust) is computed as 15 days salary, for every recognized retirement / termination / resignation. The Gratuity plan for the company is a defined benefit scheme where annual contributions as per actuarial valuation are charged to the statement of profit and loss.
The Company also has a leave encashment scheme with defined benefits for its employees. The Company makes provision for such liability in the books of accounts on the basis of year end actuarial valuation. No fund has been created for this scheme.
Based on the recommendation of the Nomination and Remuneration Committee, all decisions relating to the remuneration of the directors are taken by the Board of Directors of the Company, in accordance with shareholder''s approval, wherever necessary.
The sales to and purchases from related parties are made in the normal course of business and on terms equivalent to those that prevail in arm''s length transactions.
Gratuity and leave liability is determined for all the employees on an overall basis, based on the actuarial valuation done by an independent actuary. The specific amount of gratuity and leave liability for KMP cannot be ascertained separately, except for the amount actually paid.
The above transactions for sale and purchase of goods and services are inclusive of GST, wherever applicable.
Financial risk management objectives and policies:
The Company, as an internationally active supplier for the automobile industry expose its business and products to various market risks, credit risk and liquidity risk. The Company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company''s senior management oversees the management of these risks and devise approrpiate risk management framework for the Company. The senior management provides assurance 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. Below notes explain the sources of risks in which the Company is exposed to and how it manages the risks:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed to the risk of movements in interest rates, inventory price and foreign currency exchange rates that affects its assets, liabilities and future transactions. The Company is exposed to following key market risks:
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The Company''s main interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During March 31,2024 and March 31,2023, the Company''s borrowings at variable rate were mainly denominated in INR.
Fluctuation in commodity price in global market affects directly and indirectly the price of raw material and components used by the Company in its various products segment. Substantial pricing pressure from major OEMs to give price cuts and inability to pass on the increased cost to customers may also affect the profitability of the Company.
Key Raw material - As per the agreement with the customers, any increase in the raw material prices is passed on to the customer. But in some cases where the customer was already asking for reduction in prices, the company has to absorb the price increase.
c) Foreign Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an foreign exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s export revenue and import of raw materials and other consumables.
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits and other financial instruments.
The Company has developed guidelines for the management of credit risk from trade receivables. The Company''s primary customers are major Indian automobile manufacturers (OEMs) with good credit ratings. Non-OEM clients are subjected to credit assessments as a precautionary measure, and the adherence of all clients to payment due dates is monitored on an on-going basis. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into
homogeneous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 44. The Company does not hold collateral as security except in case of few customers. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
Credit risk from balances with banks and other financial asset is managed in accordance with the Company''s approved investment policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on regular basis and the said limits gets revised as and when appropriate. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments. The Company has deposited liquid funds at various banking institutions. Primary banking institutions are major Indian and foreign banks. In long term credit ratings these banking institutions are considered to be investment gradeAlso, no impairment loss has been recorded in respect of ixed deposits that are with recognised commercial banks and are not past due.
C Liquidity risk:
The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage the liquidity risk, cash flow forecasting is performed in the operating divisions of the Company and aggregated by Company finance. The Company''s finance monitors rolling forecasts of the Company''s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities / overdraft facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
41 Financial Instrument - Disclosure
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.
A - Company has opted to fair value its mutual fund investment through profit & loss B - Company has opted to fair value its quoted investments in equity share through OCI
C - As per Para D-15 of Appendix D of Ind AS 101, the first time adopter may chose to measure its investment in subsidiaries, JVs and Associates at cost or at fair value. Company has opted to value its investments in subsidiaries, JVs and Associates at cost.
D - Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.
* In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings and other financial assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term maturities of these instruments..
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair values of the financial assets and financial liabilities included above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
For the purpose of the Company''s capital management, equity includes issued equity capital and all other equity reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less current investments and cash and cash equivalents. The Company''s objectives when managing capital is to 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 manages its capital structure and makes adjustments in light of changes in economic & financial conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short term borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. During the year the Company has breached with these covenants. During the year lenders has imposed the penalties towards non-fulfillment of the covenants as per the loan agreements and the same has duly been accounted in financial statements wherever charged by the lenders.
43 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders, which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
45 Events occurring After the Balance Sheet date
No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization of financial statements.
46 The Company is in the process of obtaining confirmations and reconciliation with its trade receivables, trade payables and other dues receivables. The confirmations to the extent received have been reconciled and adjustments, if any, have been made. The others are pending for confirmations, reconciliations and adjustments, if any. However, the management does not expect any significant variations in the existing status.
47 Corporate Social Responsibility not applicable to the company due to loss incurred in last three years.
48 Previous year figures have been regrouped / reclassified wherever necessary to correspond with current year classification/ disclosure.
49 i) The Company do not have any benami property, and no proceeding has been initiated against the Company for
holding any benami property.
ii) The Company do not have any transactions with companies struck off.
iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company have not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vi) The Company have 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 Group shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries..
vii) The Company have not 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.
viii) The Company have not declared willful defaulter by any banks or any other financial institution at any time during the financial year.
ix) All immovable properties are held in the name of the Company.
Mar 31, 2023
(i) Impairment Review
Assets are tested for impairment whenever there are any internal or external indicators of impairment. Impairment test is performed at the level of each Cash Generating Unit (''CGU'') or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets.The measurement of the cash generating units''value in use is determined based on financial plans that have been used by management for internal purposes.The planning horizon reflects the assumptions for short to- mid-term market conditions. Key assumptions used in value-in-use calculations are:
(ii) Operating margins (Earnings before interest and taxes), (ii) Discount Rate, (iii) Growth Rates and (iv) Capital Expenditure
(iii) All Immovable Properties are held in the name of the Company.
(iv) During the previous year the management has reassess the life of the furance from 15 to 25 Years based on the technical evaluation and due to the same the depreciation for the previous year is reduced by Rs. 55.90 Lakhs
Significant management judgement is considered in determining deferred tax assets and liabilities and recoverability of deferred tax assets and Minimum Alternate Tax (MAT) entitlement of Rs.3483.31 Lakhs. The recoverability of deferred tax assets and Minimum Alternate Tax (MAT) entitlement is based on estimate of the taxable income for the period over which deferred tax assets and Minimum Alternate Tax (MAT) entitlement will be recovered. The Company has unabsorbed business depreciation and MAT credit which according to the management will be used to set off taxable profit arising in subsequent years from operation. However, As a matter of prudence, Deferred Tax Assets have been created till March 31, 2021 and no deferred tax has been created thereafter.
10.1 Due to non-updation of Bill of Material (BOM) and expansion of the customer base, quantitative variance were observed between physical and book records. These Variance have been considered as consumption of material for the preparation of the financial statements.
10.2 Inventory Physical verification and inventory consumption
The Company has a regular programme of physical verification for its inventory and fixed assets.Further, during the year, physical verification of significan part of the inventory and fixed assets has been carried out by the management and discrepancies noticed on such verification have been appropriately adjusted in the financial statements.
Terms & right attached to equity shares
a) The Company has only one class of equity shares having par value of Rs. 2/- per share. Each shareholder of equity shares is entitled to one vote per share. The company declares dividends in Indian Rupees. During the year ended 31st March 2023, the amount of dividend per share recognised as distributed to equity shareholder was Rs NIL (31st March 2022 Rs.NIL).
b) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.-Nil.
c) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of the preferencial amount,if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
d) The Board of Directors in its meeting held on December 10, 2021 considered and approved the Issue Price, Ratio and Record date for further issue of Equity shares to the existing shareholders of the Company on Right basis. Further, Pursuant to the provisions of section 62(1)(a), and other applicable provisions, if any, of the Companies Act, 2013 (the "Act") and in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (including any statutory modification(s) of re-enactments thereof for the time being in force 2,22,22,222 Equity shares of face value of Rs.2/- each issued at price of Rs.18/- per Equity share (including security premium of Rs.16/- per share) of the Company be and hereby allotted to the eligible shareholders of the Company in the Board Meeting held on February 07, 2022 and in pursuance to the Basis of Allotment approved by BSE Limited, the designated stock exchange on February 04, 2022.These share have been listed on BSE Limited and National Stock Exchange of India.
|
31 |
Contingent Liabilities (not provided for) in respect of: |
|||
|
S.N. |
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
|
|
a) |
Letter of credit opened by banks |
401.54 |
447.96 |
|
|
b) |
PF Liability where the cases are pending at various stages of appeal with the authorities |
70.00 |
70.00 |
|
|
c) |
Bank Guarantees |
14.16 |
14.16 |
|
|
d) |
Sales tax / vat/ gst demand |
582.12 |
284.71 |
|
|
e) |
Traces demands * |
9.51 |
18.17 |
|
Interest on above demands is not computed and demanded by the department, therefore interest amount is not
included above except otherwise stated.
* The Traces demands have been extracted from the traces online portal.
Contingent liabilities and claims against the Company not acknowledged as debts related to various matters
(Refer Note (a) below)
i) In respect of above matters, future cash outflows are determinable only on receipt of judgements / decisions pending at various forums / authorities.
ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
|
32 |
Commitments: |
|||
|
S.N. |
Particulars |
Year ended March 31, 2023 |
Year ended March 31, 2022 |
|
|
a) |
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) |
202.62 |
143.31 |
|
|
b) |
Estimated amount of contracts remaining to be executed on other than capital account and not provided for (net of advances) |
- |
- |
|
35 Segment Information (i) General Disclosure
The Company is primarily in the business of manufacture and sale of components to automotive original equipment manufacturers. Hence there is only one identified reportable segments as per Ind As 108 - Segment reporting.
The above reportable segments have been identified based on the significant components of the enterprise for which discrete financial information is available and are reviewed by the Chief operating decision maker (CODM) to assess the performance and allocate resources to the operating segments.
36 Employee Benefits - Gratuity & Post employement benefits
The Company has classified the various benefits provided to employees as under:-A. Defined Contribution Plan
The Company makes contribution to Statutory Provident Fund and Employee State Insurance in accordance with Employees Provident Fund and Miscellaneous Provision Act, 1952 and Employee State Insurance Act, 1948 respectively .This is post-employment benefit and is in the nature of defined contribution plan.
Gratuity (being partly administered by a Trust) is computed as 15 days salary, for every recognized retirement/ termination / resignation. The Gratuity plan for the company is a defined benefit scheme where annual contributions as per actuarial valuation are charged to the statement of profit and loss.
The Company also has a leave encashment scheme with defined benefits for its employees. The Company makes provision for such liability in the books of accounts on the basis of year end actuarial valuation. No fund has been created for this scheme.
For summarizing the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans, the details are as under
The Company is primarily in the business of manufacture and sale of components to automotive original equipment manufacturers. Hence there is only one identified reportable segments as per Ind As 108 - Segment eporting.
Based on the recommendation of the Nomination and Remuneration Committee, all decisions relating to the remuneration of the directors are taken by the Board of Directors of the Company, in accordance with shareholder''s approval, wherever necessary.
The sales to and purchases from related parties are made in the normal course of business and on terms equivalent to those that prevail in arm''s length transactions.
Gratuity and leave liability is determined for all the employees on an overall basis, based on the actuarial valuation done by an independent actuary. The specific amount of gratuity and leave liability for KMP cannot be ascertained separately, except for the amount actually paid.
The above transactions for sale and purchase of goods and services are inclusive of GST, wherever applicable.
Financial risk management objectives and policies:
The Company, as an internationally active supplier for the automobile industry expose its business and products to various market risks, credit risk and liquidity risk. The Company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company''s senior management oversees the management of these risks and devise approrpiate risk management framework for the Company. The senior management provides assurance 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.
Below notes explain the sources of risks in which the Company is exposed to and how it manages the risks:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed to the risk of movements in interest rates, inventory price and foreign currency exchange rates that affects its assets, liabilities and future transactions. The Company is exposed to following key market risks:
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The Company''s main interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During March 31, 2023 and March 31, 2022, the Company''s borrowings at variable rate were mainly denominated in INR.
Fluctuation in commodity price in global market affects directly and indirectly the price of raw material and components used by the Company in its various products segment. Substantial pricing pressure from major OEMs to give price cuts and inability to pass on the increased cost to customers may also affect the profitability of the Company.
Key Raw material - As per the agreement with the customers, any increase in the raw material prices is passed on to the customer. But in some cases where the customer was already asking for reduction in prices, the company has to absorb the price increase.
c) Foreign Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an foreign exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s export revenue and import of raw materials and other consumables.
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits and other financial instruments.
The Company has developed guidelines for the management of credit risk from trade receivables. The Company''s primary customers are major Indian automobile manufacturers (OEMs) with good credit ratings. Non-OEM clients are subjected to credit assessments as a precautionary measure, and the adherence of all clients to payment due dates is monitored on an on-going basis. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 44. The Company does not hold collateral as security except in case of few customers. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
Credit risk from balances with banks and other financial asset is managed in accordance with the Company''s approved investment policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on regular basis and the said limits gets revised as and when appropriate. The limits are set to minimise the concentration of risks and
therefore mitigate financial loss through counterparty''s potential failure to make payments. The Company has deposited liquid funds at various banking institutions. Primary banking institutions are major Indian and foreign banks. In long term credit ratings these banking institutions are considered to be investment gradeAlso, no impairment loss has been recorded in respect of ixed deposits that are with recognised commercial banks and are not past due.
C Liquidity risk:
The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage the liquidity risk, cash flow forecasting is performed in the operating divisions of the Company and aggregated by Company finance. The Company''s finance monitors rolling forecasts of the Company''s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities / overdraft facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
41 Financial Instrument - Disclosure
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.
A - Company has opted to fair value its mutual fund investment through profit & loss B - Company has opted to fair value its quoted investments in equity share through OCI
C - As per Para D-15 of Appendix D of Ind AS 101, the first time adopter may chose to measure its investment in subsidiaries, JVs and Associates at cost or at fair value. Company has opted to value its investments in subsidiaries, JVs and Associates at cost.
D - Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.
* In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings and other financial assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term maturities of these instruments.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair values of the financial assets and financial liabilities included above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
"For the purpose of the Company''s capital management, equity includes issued equity capital and all other equity reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less current investments and cash and cash equivalents. The Company''s objectives when managing capital is to 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 manages its capital structure and makes adjustments in light of changes in economic & financial conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short term borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. During the year the Company has breached with these covenants.During the year lenders has imposed the penalties towards non-fulfillment of the covenants as per the loan agreements and the same has duly been accounted in financial statements wherever charged by the lenders.
No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2022 and 31st March, 2023.
43 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders, which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
# Ratio deteriorate due to increase in operational expenses mainly consumption of raw material & stores spares.
## Ratio deteriorate due to decrease in operational profit caused mainly higher consumption of raw material & stores spares.
45 Events occurring After the Balance Sheet date
No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization of financial statements
46 The Company is in the process of obtaining confirmations and reconciliation with its trade receivables, trade payables and other dues receivables. The confirmations to the extent received have been reconciled and adjustments, if any, have been made. The others are pending for confirmations, reconciliations and adjustments, if any. However, the management does not expect any significant variations in the existing status.
47 Corporate Social Responsibility not applicable to the company due to loss incurred in last three years.
48 Previous year figures have been regrouped / reclassified wherever necessary to correspond with current year classification/ disclosure.
49 i) The Company do not have any benami property, and no proceeding has been initiated against the Company for
holding any benami property.
ii) The Company do not have any transactions with companies struck off.
iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company have not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vi) The Company have 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 Group shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
vii) The Company have not 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
viii) The Company have not declared willful defaulter by any banks or any other financial institution at any time during the financial year.
ix) All immovable properties are held in the name of the Company.
Mar 31, 2018
1 Corporate Information
Shivam Autotech Limited (the âCompanyâ) was established in the year 1999, and was initially known as Munjal Auto Components till July, 2005. The Company got converted to a separate Public Limited Company w.e.f. 29th July, 2005. In pursuant to the scheme of Demerger & arrangement, the Gurgaon Unit was transferred to Shivam Autotech Limited on 1st August, 2005. The Company has been engaged in the manufacturing of Near-Net- Shaped, auto transmission components mainly for Original Equipment Manufacturers (OEMs). The product range includes various types of transmission gears, transmission shafts, spline shafts, plunger, power train components, and employing cold/ warm/hot forging techniques. The Company has five state-of-the-art manufacturing facilities, located at Binola, Manesar, Haridwar, Bengaluru & Rohtak. The Company is listed on the National Stock Exchange and the BSE Ltd. These financial statements are presented in Indian Rupees (Rs.).
2 Basis of preparation
a) Statement of compliance
Ministry of Corporate Affairs notified roadmap to implement Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules 2015 as amended by the Companies (Indian Accounting Standards) (Amendments) Rules, 2016. As per the said roadmap, the Company is required to apply Ind AS starting from the financial year beginning on or after April 1, 2016. Accordingly, the financial statements of the Company have been prepared in accordance with Ind AS. For all the periods up to and including the year ended March 31, 2017, the Company has prepared its financial statements in accordance with the Accounting Standards notified under the Section 133 of the Companies Act, 2013 read together with Companies (Accounts) Rules, 2014 (Indian GAAP) as amended. These financial statements for the year ended March 31, 2018 are the first financial statements which the company has prepared in accordance with Ind AS.
An explanation of how the transition to Ind AS has effected the previously reported financial position and financial performance of the Company is provided in note no 51.
b) Basis of measurement
The financial statements have been prepared accrual basis on historical cost convention, except as stated otherwise. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.â
c) Functional and presentation currency
The financial statements are presented in Indian National Rupee (âINRâ), which is the Companyâs functional currency. All amounts have been rounded to the nearest lakhs, unless otherwise indicated.
d) Current or Non current classification
All Assets and Liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of services provided and time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and noncurrent classification of assets and liabilities.
e) Use of judgments and estimates
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent liabilities and contingent assets at the date of financial statements, income and expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively.
Application of accounting policies that require critical accounting estimates and assumption judgments having the most significant effect on the amounts recognized in the financial statements are:
- Measurement of defined benefit obligations:
- Recognition of deferred tax assets & MAT credit entitlement;
- Useful life and residual value of Property, plant and equipment and intangible assets;
- Impairment test of financial and non-financial assets;
- Recognition and measurement of provisions and contingencies;
- Fair value measurement of financial instruments;
Terms & right attached to equity shares
a) The Company has only one class of equity shares having par value of Rs. 2/- per share. Each shareholder equity shares is entitled to one vote per share. The company declares dividends in Indian Rupees. During the year ended March 31, 2018, the amount of dividend per share recognised as distributed to equity shareholder was Rs. NIL ( March 31, 2017 Rs. NIL)
b) Aggregate number of bonus share issued, shares issued for consideration other than cash and shares brought back during the period of five year immediately preceding the reporting date are as under:
i) The company has issued 5,00,00,000 fully paid up equity shares of face: value: of Rs. 2/- each, in financial year 2015-2016 pursuant to bonus approved by the shareholders through postal ballot.
ii) The company has neither issued any share for consideration other than cash nor bought back any shares during five years immediately preceding the date at which the Balance Sheet is prepared.
c) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of the preferential amount, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
* There are no Micro and Small Enterprises, to whom the Company owes dues as at 31st March 2018. (Previous Year- NIL). The information required to be disclosed under âMicro, Small and Medium Enterprises Development Act, 2006â has been determined to the extent such parties have been identified on the basis of information available with the company. Further, during the year Company has not paid any interest to any such parties.
3 Segment Information
(i) General Disclosure
The Company is primarily in the business of manufacture and sale of components to automotive original equipment manufacturers. Hence there is only one identified reportable segments as per Ind As 108 - Segment eporting.
The above reportable segments have been identified based on the significant components of the enterprise for which discrete financial information is available and are reviewed by the Chief operating decision maker (CODM) to assess the performance and allocate resources to the operating segments.
(ii) Entity wide disclosure required by IND AS 108 are made as follows: a) Revenues from sale of products to external customers
b Segment Assets
Total of non-current assets other than FInancial instruments, investment in subsidiaries, joint ventures and associate and deferred tax assets broken down by location of the assets, is shown below
4 Employee Benefits - Gratuity & Post employement benefits
The Company has classified the various benefits provided to employees as under:-
A. Defined Contribution Plan
The Company makes contribution to statutory Provident Fund and Employee State Insurance in accordance with Employees Provident Fund and Miscellaneous Provision Act, 1952 and Employee State Insurance Act, 1948 respectively. This is post-employment benefit and is in the nature of defined contribution plan.
B. Defined Benefit Plan
Gratuity (being partly administered by a Trust) is computed as 15 days salary, for every recognized retirement/ termination / resignation.The Gratuity plan for the company is a defined benefit scheme where annual contributions as per actuarial valuation are charged to the Statement of profit and loss.
The Company also has a leave encashment scheme with defined benefits for its employees. The Company makes provision for such liability in the books of accounts on the basis of year end actuarial valuation. No fund has been created for this scheme.
For summarizing the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans, the details are as under
The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The above information is certified by Actuary.
5 Related Party Transaction
a) List of Related Parties
(i) Key Managerial Personnel
Mr. Neeraj Munjal, Managing Director Dr. Anil Kumar Gupta, Technical Director Mrs. Charu Munjal, Whole Time Director Mr. Davendra Ujlayan, VP- Finance Ms. Shivani Kakkar, Company Secretary Dr. Vinayshil Gautam- Independent Director Mr. Sunil Kant Munjal- Independent Director Mr Bhagwan Dass Narang-Independent Director Mr. Surrinder Lal Kapur-Independent Director
(ii) Holding Company
Dayanand Munjal Investments Private Limited
(iii) Enterprises over which key management personnel and their relatives are able to exercise significant influence
Munjal Showa Limited Pushti Metal Industries LLP Earthly Possessions
Based on the recommendation of the Nomination, Remuneration and Compensation Committee, all decisions relating to the remuneration of the directors are taken by the Board of Directors of the Company, in accordance with shareholderâs approval, wherever necessary.
The sales to and purchases from related parties are made in the normal course of business and on terms equivalent to those that prevail in armâs length transactions.
6 Operating Lease(Ind AS 17)
(a) Operating lease arrangements
Office premises are taken on operating lease. There is no escalation clause in the lease agreement
(b) Future minimum rentals payables under non-cancellable operating lease:
Operating lease payment recognised in the Statement of Profit and Loss amounting to Rs. 176.21 lakhs (March 31, 2017 Rs.182.35 lakhs)
7 Capital - Work - In - Process
The Company had incurred some expenditure related to acquisition/construction of fixed assets and therefore accounted for the same under Capital work in progress. Details of the expenses capitalised and carried forward as capital work in progress are given below:
8 Impairment Review
Assets are tested for impairment whenever there are any internal or external indicators of impairment. Impairment test is performed at the level of each Cash Generating Unit (âCGUâ) or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets. The measurement of the cash generating unitsâ value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid-term market conditions.
Key assumptions used in value-in-use calculations are:-
(i) Operating margins (Earnings before interest and taxes), (ii) Discount Rate, (iii) Growth Rates and (iv) Capital Expenditure
9 Events occurring After the Balance Sheet date
No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization of financial statements
10 Financial Risk Management
Financial risk management objectives and policies:
The Company, as an internationally active supplier for the automobile industry expose its business and products to various market risks, credit risk and liquidity risk. The Company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Companyâs senior management oversees the management of these risks and devise approrpiate risk management framework for the Company. The senior management provides assurance 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.
Below notes explain the sources of risks in which the Company is exposed to and how it manages the risks:
A Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company is exposed to the risk of movements in interest rates, inventory price and foreign currency exchange rates that affects its assets, liabilities and future transactions. The Company is exposed to following key market risks:
a) Interest rate risk
Interest rate risk is the risk that the fair value of future cash follows of the financial instruments will luctuate because of changes in market interest rates. The Companyâs main interest rate risk arises from long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. During March 31,2018 and March 31, 2017, the Companyâs borrowings at variable rate were mainly denominated in INR.
Interest rate risk exposure - The exposure of the Companyâs borrowing to interest rate changes at the end of the reporting period are as follows:
An analysis by maturities is provided in Note (C) Maturities of financial liabilities below.
Sensitivity analysis - For Floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.
b) Price Risk
Fluctuation in commodity price in global market affects directly and indirectly the price of raw material and components used by the Company in its various products segment. Substantial pricing pressure from major OEMs to give price cuts and inability to pass on the increased cost to customers may also affect the profitability of the Company.
Key Raw material - As per the agreement with the customers, any increase in the raw materials prices is passed on to the customer. But in some cases where the customer was already asking for reduction in prices, the company has to absorb the price increase.
c) Foreign Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an foreign exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs export revenue and import of raw materials and other consumables.
The unhedged foreign currency exposure is as follows:
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant.
B Credit risk:
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits and other financial instruments.
The Company has developed guidelines for the management of credit risk from trade receivables. The Companyâs primary customers are major Indian automobile manufacturers (OEMs) with good credit ratings. Non-OEM clients are subjected to credit assessments as a precautionary measure, and the adherence of all clients to payment due dates is monitored on an on-going basis. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 49. The Company does not hold collateral as security except in case of few customers. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.
Credit risk from balances with banks and other financial asset is managed in accordance with the Companyâs approved investment policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on regular basis and the said limits gets revised as and when appropriate. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments. The Company has deposited liquid funds at various banking institutions. Primary banking institutions are major Indian and foreign banks. In long term credit ratings these banking institutions are considered to be investment gradeAlso, no impairment loss has been recorded in respect of ixed deposits that are with recognised commercial banks and are not past due.
C Liquidity risk:
The liquidity risk encompasses any risk that the Company cannot fully meet its financial obligations. To manage the liquidity risk, cash flow forecasting is performed in the operating divisions of the Company and aggregated by Company finance. The Companyâs finance monitors rolling forecasts of the Companyâs liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities / overdraft facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
Table hereunder provides the current ratios of the Company as at the year end
11 Financial Instrument - Disclosure
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.
A - Company has opted to fair value its mutual fund investment through profit & loss B - Company has opted to fair value its quoted investments in equity share through OCI
C - As per Para D-15 of Appendix D of Ind AS 101, the first time adopter may chose to measure its investment in subsidiaries, JVs and Associates at cost or at fair value. Company has opted to value its investments in subsidiaries, JVs and Associates at cost.
D - Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.
* In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings and other financial assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term maturities of these instruments.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The fair values of the financial assets and financial liabilities included above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
12 Capital Management
For the purpose of the Companyâs capital management, equity includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less current investments and cash and cash equivalents. The Companyâs objectives when managing capital is to 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 manages its capital structure and makes adjustments in light of changes in economic & financial conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short term borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.
No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2017 and 31st March, 2018.
(i) Debt is defined as long-term and short-term borrowings.
Recently the company has set up new plants for business expansion
13 Transition to Ind As
First-time adoption of Ind AS
These financial statements, for the year ended March 31, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1 April 2016, being the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.
This note explains the principal adjustments made by the Company and an explanation on how the transition from the previous GAAP to Ind AS has affected its financial statements, including the Balance Sheet as at 1st April, 2016 and the financial statements for the year ended 31st March, 2017.
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from the previous GAAP to Ind - AS:
a. Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying gross & net value as it is for all of its property, plant and equipment as recognised in the financial statements as on the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost on the date of transition.
The Company has elected to continue with the carrying gross & net value as it is for all classes of its property, plant and equipment and intangible assets, including capital wok-in-progress, recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
Material items such as spare parts,stand by equipment and service equipments are classified as property, plant and equipment when they meet the identification of property, plant and equipment. as specified in Ind AS 16-Property Plant and Equipment.
b Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing on the date of transition to Ind AS, except where the effect is expected to be not material.
c Investment in subsidiary, associate, joint venture
Ind AS 27 requires an entity to account for its investments in subsidiaries and associates either at cost or in accordance with Ind AS 109. Ind AS 101 provides an option to measure such investments as at the date of transition to Ind AS either at cost determined in accordance with Ind AS 27 or deemed cost, where deemed cost shall be its fair value as at date of transition to Ind AS or previous GAAP carrying amount as at that date.
d. Designation of previously recognised financial instruments
Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances on the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.
e Estimates
An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.
f De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).
g Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
h Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.
i Government Grant
Ind As 101 requires a first time adopter to recognise the requirements in Ind AS 109, Financial Instruments, and Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to Ind AS and shall not recognise the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Consequentially the comapny has recognised and measured government grant on a government loan at a below-market rate of interest prospectively.
Footnotes to the reconciliation of equity as at 1st April, 2016 and 31st March, 2017 and Statement of Profit and Loss for the year ended 31st March, 2017 :
Financial Assets & Liabilities
The previous yearâs including figures as on the date of transition have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year including figures as at the date of transition are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.
Other comprehensive income
Under the previous GAAP, the Company did not present total comprehensive income and other comprehensive income. Hence, it has reconciled the previous GAAP profit to profit as per Ind AS. Further, the previous GAAP profit is reconciled to other comprehensive income and total comprehensive income as per Ind AS.
Deemed Cost of Property, plant and equipment & Intangible Assets
Under Ind AS, the Company has elected to opt for cost model with respect to property, plant and equipments, capital work in progress and intangible asset. There are no decommissioning liabilities of the Company. Material items such as spare parts,stand by equipment and service equipments are classified as property plant and equipment when they meet the identification of PPE as specified in Ind AS 16- Property Plant and Equipment.
Borrowings
Ind AS requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under the previous GAAP, transaction costs incurred in connection with borrowings were accounted upfront and charged to Statement of Profit and Loss for the period in which such transaction costs was incurred. Accordingly, borrowings as at the transition date have been reduced by Rs 63.02 lakhs with a corresponding adjustment to retained earnings, net of tax.
Trade Receivables
Under Indian GAAP, the Company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Company has expected credit losses in its trade receivable aging more thn six months @ 1%.
Defined benefit obligation
âBoth under Indian GAAP and Ind AS, the company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus, the employee benefit cost is reduced by Rs 25.20 lakhs on account to re-measurement loss for the FY 2016-17 and remeasurement loss on defined benefit plan has been recognized in the OCI, net of tax as at 31st March 2017.
Long term financial asset at amortised cost
Under Indian GAAP, long-term financial assets such as interest free deposit were recognised at the contractual amount and were not discounted. Under Ind AS, where the effect of time value of money is material, the amount of asset should be recognised at the present value of amount expected to be realised. These assets are subsequently measured at amortised cost method.
Deferred tax Liability (net)
Previous GAAP required deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the year. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which were not required under the previous GAAP. Moreover, carryforward of unused tax credits are to be treated as deferred tax assets which was earlier considered as Other non-current non-financial assets. In addition, the various transitional adjustments lead to temporary differences and consequently deferred tax adjustments have been recognized in correlation to the underlying transaction in retained earnings. The net impact on deferred tax liabilities has increased by Rs. 31.95 lakhs and by Rs. 31.45 lakhs as at the date of transition and for the year ended on 31st March 2017 respectively.
Revenue
Under the previous GAAP, revenue from sale of goods was presented as net of excise duty on sales. However, under Ind AS, revenue from sale of goods includes excise duty and such excise duty is separately presented as an expense on the face of the Statement of Profit and Loss. Thus, under Ind AS, sale of goods for the year ended 31st March, 2017 has increased by Rs 2960.54 lakhs.
Proposed Dividend
Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs 481.83 lakhs as at April 01, 2016 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
Retained earnings
Retained earnings as at the transition date has been adjusted consequent to the above Ind AS transitional adjustments.
Mar 31, 2016
Rights, restrictions and preferences attached to each class of Shares
The Company has only one class of equity shares having par value of Rs. 2/- per share. Each shareholder of equity shares is entitled to one vote per share. The Company declares dividends in Indian Rupees. The dividend proposed by the board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.
Amount of per share dividend recognized as distributions to equity shareholders is Rs. 0.40 (previous year Rs. 1.20).
The Company has issued 5,00,00,000 fully paid up shares of face value of Rs 2/- each during the year, pursuant to bonus issue approved by the Shareholders in Annual General Meeting.
During the last five years, the company has not bought back any shares.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of the preferential amount, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature of Security and Terms of Repayment
Details of Securities
(i) Term Loan from IDBI Bank Ltd having outstanding balance of Rs. 1014.42 lacs (previous year Rs. 198.00 lacs) is secured by exclusive charge on the specific machinery created under expansion project of Binola & Haridwar plant along with other lenders.
(ii) Term loan from Axis Bank having outstanding balance of Rs. 77.73 lacs (previous year Rs. 233.73 lacs) are secured by exclusive charge on specific movable machineries of Binola Plant respectively with other lenders.
(iii) Term loan availed from Karnataka Bank having outstanding balance of Rs. 1500.00 lacs (previous year Rs. 2000.00 lacs) is secured against Hypothecation of specific movable Machineries located at Binola & Manesar Plant along with other lenders.
(iv) Term loans availed for Haridwar Plant from Punjab National Bank having outstanding balance of Rs. 847.92 lacs (previous year Rs. 1,986.67 lacs) is having pari passu charge over the entire Fixed assets of Haridwar plant both present and future.
(v) Term Loan availed from Yes Bank Ltd having outstanding balance of Rs.5,000.00 lacs (previous year Rs 5,000.00 lacs) is having first pari passu on entire fixed assets of Rohtak & Banglore Plant, respectively with other lenders.
(vi) Term Loan availed from Kotak Mahindra Bank Ltd having outstanding balance of Rs. 4,000.00 lacs (previous year Rs 961.74 lacs) is having first pari passu on entire fixed assets of Rohtak & Banglore Plant, respectively with other lenders.
(vii) Term Loan availed from ICICI Bank Ltd having outstanding balance of Rs. 3,000.00 lacs (previous year Rs Nil) is having first pari passu on entire fixed assets of Haridwar plant upto 1.25 times cover of loan amount.
(viii) Term Loan availed from IDFC Bank Ltd having outstanding balance of Rs. 2,648.52 lacs (previous year Rs Nil) is having first pari passu on entire fixed assets of Rohtak & Bengaluru Plant, respectively with other lenders.
(ix) The interest rate for the above Term Loan varies from 9.68% to 12.00 % (previous year 11.00% to 12.50 %).
Details of Securities
(i) Cash credit from IDBI Bank having outstanding balance of Rs. 292.59 Lacs (previous year Rs. 1400.00 lacs) and Axis Bank having outstanding balance Rs. 12.66 (PY Rs. Nil ) at Binola is secured by first Pari Passu charge on current assets of the Company.
(ii) Cash credit from Karnataka Bank having outstanding balance of Rs. 1206.75 Lacs (previous year Rs. 625.87 Lacs) at Binola is secured as first charge on entire current assets of the Binola plant alongwith other lenders (Both Present and future and second charge on the machineries proposed to be purchased out of Term Loan of Rs. 10 Crores for Binola Plant).
(iiI) Cash credit from Punjab National Bank having outstanding balance of Rs. 1976.58 lacs (previous year Rs. 1491.64 lacs) and IDBI Bank Ltd. having an outstanding balance of Rs. 1029.45 Lacs (previous year Rs.1110.12 lacs) is secured by first pari passu charge on the current assets of Haridwar Plant along with the other working capital bankers.
(iv) Cash credit from Kotak Mahindra Bank Limited having outstanding balance or Rs 180.67 lacs (previous year Rs. 2075.33 lacs) is secured by first pari passu charges on the current asset of Binola plant along with the other working capital bankers.
(v) Cash credit from ICICI Bank Limited having outstanding balance of Rs 839.33 lacs (previous year Rs. Nil lacs) is secured on First pari passu charge over fixed assets at Haridwar Plant.
(vi) Cash credit from HDFC Bank Limited having outstanding balance of Rs 2520.01 lacs (previous year Rs. Nil) is secured by first pari passu charges on the current asset of Binola & Haridwar plants along with the other working capital bankers.
(vii) Cash credit from IDFC Bank Limited having outstanding balance or Rs 2436.91 lacs (previous year Rs. Nil) is secured by first pari passu charges on the current asset of Haridwar plant along with the other working capital bankers.
(viii) The interest rate for the above cash credit varies from 9.45% to 11.90% (previous year 11.50% to 12.75%).
1. There are no present obligations requiring provision in accordance with the guiding principles as enunciated in Accounting Standard AS 29-âProvisions, Contingent Liabilities and Contingent Assets â as it is not probable that an outflow of resources embodying economic benefits will be required.
2. In the opinion of Board, current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they stated and provision for all known liabilities has been made and considered adequate.
3. Expenditure on insurance includes Rs. 6.31 Lacs (Previous Year Rs. 6.31lacs) being the premium paid under Keyman Insurance Schemes to cover risks on life of Key Management personnel. 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.
4. Employee Benefits in accordance with Accounting Standard (AS-15)
The Company has classified the various benefits provided to employees as under:-
(i) Defined contribution plans
a. Provident fund
(ii) Defined benefits plans
a. Contribution to Gratuity fund
b. Compensated absences - Earned leave
In accordance with Accounting Standard 15, actuarial valuation was done in respect of the aforesaid defined plans based on the following assumptions: -
Economic Assumptions
The discount rate and salary increases assumed are key financial assumptions and are considered together; it is the difference or âgapâ between these rates which is more important than the individual rates in isolation.
Salary Escalation Rate
The salary escalation rate usually consists of at least three components, viz. Regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Companyâs philosophy towards employee remuneration are also taken into account. Again a long- term view as to the trend in salary increase rates is taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.
B. Provident Fund and Employees State Insurance
The Company makes contribution to statutory provident fund and Employee State Insurance in accordance with Employees Provident Fund and Miscellaneous Provision Act, 1952 and Employee State Insurance Act, 1948 respectively .This is post-employment benefit and is in the nature of defined contribution plan. Contribution made by the Company during the year is Rs. 225.77 lacs. (Previous year Rs. 209.32 lacs)
5. As the Companyâs business activity falls within a single primary business segment viz. Motorcycles Parts, the disclosure requirements of Accounting Standard (AS-17) âSegment Reportingâ notified by Companies (Accounting Standards) Rules, 2013, (as amended) are not applicable.
6. In the opinion of the management there is no reduction in the value of any asset, hence no provision is required in terms of Accounting Standard 28 âImpairment of Assetâ.
7. During the year, the company has incurred an amount of Rs. 11.59 lacs (previous year 13.83 lacs) toward Corporate Social Responsibility expenditure.
8. Previous year figures have been regrouped/rearranged, wherever considered necessary to confirm to this yearâs classification.
Mar 31, 2015
1. Rights, restrictions and preferences attached to each class of Shares
The Company has only one class of equity shares having par value of
Rs.2/- per share. Each shareholder of equity shares is entitled to one
vote per share. The Company declares dividends in Indian Rupees. The
dividend proposed by the board of Directors is subject to the approval
of the shareholders in the ensuing annual general meeting.
Amount of per share dividend recognized as distributions to equity
shareholders is Rs. 1.20 (previous year Rs. 0.90).
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the company
after distribution of the preferential amount, if any. The distribution
will be in proportion to the number of equity shares held by the
shareholders.
The Company has not issued any bonus shares during last five years.
(i) Term Loan from IDBI Bank Ltd having outstanding balance of Rs.
198.00 lacs (previous year Rs. NIL) is secured by exclusive charge on
the fixed assets created under expansion project of binola plant.
(ii) Term loan from Axis Bank having outstanding balance of Rs. 233.73
lacs (previous year Rs. 724.73 lacs) are secured by exclusive charge on
specific movable machineries of Binola Plant.
(iii) Term loan availed from Karnataka Bank having outstanding balance
of Rs. 2,000.00 lacs (previous year Rs. 635.79) is secured against
Hypothecatin of Machineries located at Binola & Manesar Plant.
(iv) Term loans availed for Haridwar Plant from Punjab National Bank
having outstanding balance of Rs. 847.92 lacs (previous year Rs.
1,986.67 lacs) is having pari pasu charge over the entire Fixed assets
of Haridwar plant both present and future.
(i) Cash credit from IDBI Bank having outstanding balance of Rs.
1400.00 Lacs (previous year Rs. 40.50 lacs) and Axis Bank having
outstanding balance Rs. Nil (PY Rs. 277.95 lacs) at Binola is secured
by first Pari Pasu charge on current assets of the Company.
(ii) Cash credit from Karnataka Bank having outstanding balance of Rs.
625.87 Lacs (previous year Rs. 526.55 Lacs) at Binola is secured as
first charge on entire current assets of the company (Both Present and
future and second charge on the machineries proposed to be purchased
out of Term Loan of Rs. 10 Crores for Binola Plant.
(iiI) Cash credit from Punjab National Bank having outstanding balance
of Rs. 1491.64 lacs (previous year Rs. 2392.21 lacs) and IDBI Bank Ltd.
having an outstanding balance of Rs. 1110.12 Lacs (previous year
Rs.174.02 lacs) is secured by first pari passu charge on the current
assets of Haridwar Plant along with the other working capital bankers.
(iv) Cash credit from Ing Vysya Bank Limited having outstanding balance
or Rs 2075.33 lacs (previous year Rs. 2497.76 lacs) is secured by
first pari passu charges on the current asset of binola plant along
with the other working capital bankers.
(v) The interest rate for the above cash credit varies from 11.50% to
12.75% (previous year 12% to 14%).
2. Background
SHIVAM AUTOTECH LIMITED (the 'Company') was established in the year
1999, and was initially known as Munjal Auto Components till July,
2005. The Company got converted to a separate Public Limited Company
w.e.f. 29th July, 2005. In pursuant to the scheme of Demerger
arrangement, the Gurgaon Unit was transferred to Shivam Autotech
Limited on 1st August, 2005.The Company has been engaged in the
manufacturing of Near-Net- Shaped, auto transmission components mainly
for Original Equipment Manufacturers (OEMs). The product range includes
various types of transmission gears, transmission shafts, spline
shafts, plunger, power train components, and employing cold/warm/hot
forging techniques. The Company has two state-of-the-art manufacturing
facilities, located at Gurgaon & Haridwar. The Company's new plant in
Haridwar was commissioned in April, 2009 and is equipped with modern
and state of art facilities. The main advantage of cold/ warm forging
technology, which is being used to manufacture near net shaped
components, are high production rates, better dimensional accuracies,
excellent surface finish, substantial savings in material with
minimized machining and having superior mechanical and metallurgical
properties. The Company is listed on the National Stock Exchange and
Bombay Stock Exchange of India. These financial statements are
presented in Indian Rupees (Rs).
3. Contingent liabilities and commitments outstanding:
I Contingent Liabilities not provided for in respect of:-
As at 31 As at 31
March 2015 March 2014
Description Rs . Lacs Rs . Lacs
a) Letter of credit opened by banks 1370.83 1063.67
b) Disputed Excise Duty and Other demands 8.95 18.12
c) Income tax demands where the cases are
pending at various 6.45 7.37
stages of appeal with the authorities
Based on legal opinion taken by the Company, discussions with the
solicitors etc, the Company believes that there is a fair chance of
decisions in favour of the Company in respect of the items listed
above and hence no provision is considered necessary against the
same
II Commitments
Estimated amount of contracts remaining
to be executed on 4739.15 2052.22
capital account and not provided for
(net of advances)
III Other Commitments - -
4. There are no present obligations requiring provision in accordance
with the guiding principles as enunciated in Accounting Standard AS
29-"Provisions, Contingent Liabilities and Contingent Assets " as it is
not probable that an outflow of resources embodying economic benefits
will be required.
5. In the opinion of Board, current assets, loans and advances have a
value on realisation in the ordinary course of business at least equal
to the amount at which they stated and provision for all known
liabilities has been made and considered adequate.
6. Expenditure on insurance includes Rs. 6.31 Lacs (Previous Year Rs.
6.31lacs) being the premium paid under Keyman Insurance Schemes to
cover risks on life of Key Management personnel. 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.
7. Employee Benefits in accordance with Accounting Standard (AS-15)
The Company has classified the various benefits provided to employees
as under:-
(i) Defined contribution plans
a. Provident fund
(ii) Defined benefits plans
a. Contribution to Gratuity fund
b. Compensated absences - Earned leave
In accordance with Accounting Standard 15, actuarial valuation was done
in respect of the aforesaid defined plans based on the following
assumptions: -
8.Economic Assumptions
The discount rate and salary increases assumed are key financial
assumptions and are considered together; it is the difference or 'gap'
between these rates which is more important than the individual rates
in isolation.
9.Salary Escalation Rate
The salary escalation rate usually consists of at least three
components, viz. Regular increments, price inflation and promotional
increases. In addition to this any commitments by the management
regarding future salary increases and the Company's philosophy towards
employee remuneration are also taken into account. Again a long- term
view as to the trend in salary increase rates is taken rather than be
guided by the escalation rates experienced in the immediate past, if
they have been influenced by unusual factors.
10. Provident Fund and Employees State Insurance
The Company makes contribution to statutory provident fund and Employee
State Insurance in accordance with Employees Provident Fund and
Miscellaneous Provision Act, 1952 and Employee State Insurance Act,
1948 respectively .This is post-employment benefit and is in the nature
of defined contribution plan. Contribution made by the Company during
the year is Rs.209.32 Lacs. (Previous year Rs. 187.93 lacs)
11. As the Company's business activity falls within a single primary
business segment viz. Motorcycles Parts, the disclosure requirements of
Accounting Standard (AS-17) "Segment Reporting" notified by Companies
(Accounting Standards) Rules, 2013, (as amended) are not applicable.
12. Related Party Disclosures (**):-
a) Key Managerial Personnel
Mr. Neeraj Munjal, Managing Director Dr. Anil Kumar Gupta, Technical
Director Mrs. Charu Munjal, Whole Time Director Mr. Davendra Ujlayan,
VP- Finance Ms. Shivani Kakkar, Company Secretary
b) Holding Company
Dayanand Munjal Investments Private Limited
c) Enterprises over which key management personnel and their relatives
are able to exercise significant influence
Munjal Showa Limited Pushti Metal Industries LLP Earthly Possessions
Semac Consultants Pvt. Ltd.
14. During the year ended March 31,2015, pursuant to the provisions of
the Companies Act, 2013 and requirements of notification G.S.R. 627 (E
) dated August 29,2014, , the company has reviewed and reassessed the
estimated useful lives and residual value of its fixed assets and
adopted useful lives of the assets as per Schedule II to the Companies
Act,2013 except for certain items of fixed assets, which is based on
the technical evaluation. Accordingly, the unamortized carrying value
is being depreciated over the revised remaining useful lives.
Consequently, the depreciation charge for the year ended March 31,2015
is lower by Rs. 343.29 lacs. Depreciation of Rs. 51.95 lacs (net of
deferred tax of Rs. 21.27 lacs) has been debited to the opening
reserves, in accordance with the transitional provision to schedule II
of the Companies Act, 2013.
15. In the opinion of the management there is no reduction in the
value of any asset, hence no provision is required in term of
accountancy standard 28 "Impairment of Asset".
16. Previous year figaures have been regrouped where necessary to
confirm to this year's classification.
Mar 31, 2014
1. Background
SHIVAM AUTOTECH LIMITED (the ''Company'') was established in the year
1999, and was initially known as Munjal Auto Components till July,
2005. The Company got converted to a separate Public Limited Company
w.e.f. 29th July, 2005. In pursuant to the scheme of Demerger
arrangement, the Gurgaon Unit was transferred to Shivam Autotech
Limited on 1st August, 2005.The Company has been engaged in the
manufacturing of Near-Net- Shaped, auto transmission components mainly
for Original Equipment Manufacturers (OEMs). The product range includes
various types of transmission gears, transmission shafts, spline
shafts, plunger, power train components, and employing cold/warm/hot
forging techniques. The Company has two state-of-the-art manufacturing
facilities, located at Gurgaon & Haridwar. The Company''s new plant in
Haridwar was commissioned in April, 2009 and is equipped with modern
and state of art facilities. The main advantage of cold/ warm forging
technology, which is being used to manufacture near net shaped
components, are high production rates, better dimensional accuracies,
excellent surface finish, substantial savings in material with
minimized machining and having superior mechanical and metallurgical
properties. The Company is listed on the National Stock Exchange and
BSE Limited.
2. Details of Securities
(i) Cash credit from IDBI Bank having outstanding balance of Rs. 40.50
Lacs (P Y Rs. 875.73 lacs) and Axis Bank having outstanding balance
Rs.277.95 Lacs (P Y Rs. 660.83 lacs) at Binola is secured by first Pari
Pasu charge on current assets of the company.
(ii) Cash credit from Karnataka Bank having outstanding balance of Rs.
526.55 Lacs (previous year NIL) at Binola is secured as first charge on
entire current assets of the company (Both Present and future and
second charge on the machineries proposed to be purchased out of Term
Loan of Rs. 10 Crores for Binola Plant.
(iii) Cash credit from Punjab National Bank having outstanding balance
of Rs. 2392.21 lacs (P Y Rs. 2422.68 lacs) and IDBI Bank Ltd. having an
outstanding balance of Rs. 174.02 Lacs (P Y Rs.154.84 lacs) is secured
by first pari passu charge on the current assets of Haridwar Plant
along with the other working capital bankers.
(iv) Cash credit from Ing Vysya Bank Limited having outstanding balance
or Rs 2497.76 lacs (P Y Rs. 871.15 lacs) is secured by first pari passu
charges on the current asset of binola plant along with the other
working capital bankers.
(v) The interest rate for the above cash credit varies from 11.5% to
12.75% (P Y 12% to 14%).
3. Contingent liabilities and commitments outstanding:
As on As on
31st March 2014 31st March 2013
Contingent Liabilities Rs. in Lacs Rs. in Lacs
not provided for in
respect of:-
Description
a) Letter of credit opened 1,063.67 1038.16
by banks
b) Disputed Excise Duty 18.12 111.91
and Other demands
c) Income tax demands 7.37 6.45
where the cases are
pending at various
stages of appeal
with the authorities
Based on legal opinion taken by the Company, discussions with the
solicitors etc, the Company believes that there is a fair chance of
decisions in favour of the Company in respect of the items listed above
and hence no provision is considered necessary against the same.
II Commitments
Estimated amount of contracts
remaining to be executed on
capital account and not
provided for (net of advances) 2,052.22 69.34
III Other Commitments - -
4. There are no present obligations requiring provision in accordance
with the guiding principles as enunciated in Accounting Standard AS
29-"Provisions, Contingent Liabilities and Contingent Assets " as it is
not probable that an outflow of resources embodying economic benefits
will be required.
5. In the opinion of Board, current assets, loans and advances have a
value on realisation in the ordinary course of business at least equal
to the amount at which they stated and provision for all known
liabilities has been made and considered adequate.
6. Expenditure on insurance includes Rs. 6.31 Lacs (Previous Year Rs.
6.30 lacs) being the premium paid under Keyman Insurance Schemes to
cover risks on life of Key Management personnel. 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.
7. Employee Benefits in accordance with Accounting Standard (AS-15)
A. Gratuity and Leave Encashment
Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The Scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The following tables summaries the components of net benefit expense
recognized in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet for the respective plans.
8. As the Company''s business activity falls within a single primary
business segment viz. Motorcycles Parts, the disclosure requirements of
Accounting Standard (AS-17) "Segment Reporting" notified by Companies
(Accounting Standards) Rules, 2006, (as amended) are not applicable.
Mar 31, 2013
OVERVIEW:-
SHIVAM AUTOTECH LIMITED (SAL) was established in the year 1999, and was
initially known as Munjal Auto Components till July, 2005. The Company
got converted to a separate Public Limited Company w.e.f. 29th July,
2005. In pursuant to the scheme of Demerger arrangement, the Gurgaon
Unit was transferred to Shivam Autotech Ltd. on 1st August, 2005. The
Company has been engaged in the manufacturing of Near-Net- Shaped, auto
transmission components mainly for Original Equipments Manufacturers
(OEMs). The product range includes various types of transmission gears,
transmission shafts, spline shafts, plunger, power train components,
employing cold/warm/hot forging techniques.The Company has two
state-of-the-art manufacturing facilities, located at Gurgaon &
Haridwar. The company''s new plant in Haridwar was commissioned in
April, 2009 and is equipped with modern and state of art facilities.The
main advantage of cold/ warm forging technology, which is being used to
manufacture near net shaped components, are high production rates,
better dimensional accuracies, excellent surface finish, substantial
savings in material with minimized machining and having superior
mechanical and metallurgical properties.It is listed on the National
Stock Exchange of India and Bombay Stock Exchange in India.
1 CONTINGENT LIABILITIES AND COMMITMENTS:
I Contingent Liabilities not provided for in respect of:-
(Rs. In lacs)
Description Current Year Previous Year
2012-13 2011-12
a) Letter of Credit opened by banks 1,038.16 1,454.88
b) Disputed Excise Duty and Other demands 111.91 106.71
c) Income tax demands where the cases
are pending at various stages of
appeal with the authorities 6.45 6.45
Based on legal opinion taken by the Company, discussions with the
solicitors etc, the Company believes that there is a fair chance of
decisions in respect of the items listed above and hence no provision
is considered necessary against the same.
II Commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) 69.34 768.71
III Other Commitments
2 There are no present obligations requiring provision in accordance
with the guiding principles as enunciated in Accounting Standard AS
29-"Provisions, Contingent Liabilities and Contingent Assets " as it is
not probable that an outflow of resources embodying economic benefits
will be required.
3 In the opinion of Board, Current Assets, Loans and Advances have a
value on realisation in the ordinary course oif business at least equal
to the amount at which they stated and provision for all known
liabilities has been made and considered adequate.
4 Expenditure on insurance includes Rs. 6.30 Lacs (Previous Year Rs.
6.30 lacs) being the premium paid under Keyman Insurance Schemes to
cover risks on life of Key Management personnel. 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.
4 Employee Benefits'', in accordance with Accounting Standard (AS-15)
A Gratuity and Leave Encashment Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The Scheme is funded with an insurance company in the form of a
qualifying insurance policy. The following tables summaries the
components of net benefit expense recognized in the statement of profit
and loss and the funded status and amounts recognized in the balance
sheet for the respective plans.
B Provident Fund and Employees State Insurance
The Company makes contribution to statutory provident fund and Employee
State Insurance in accordance with Employees Provident Fund and
Miscellaneous Provision Act, 1952 and Employee State Insurance Act,
1948 respectively This is post employment benefit and is in the nature
of defined contribution plan. Contribution made by the Company during
the year is Rs.173.55 Lacs. (Previous year Rs. 163.30 lacs)
5 a) Provision for current income tax has been considering various
benefits and allowances available to the Company under the provisions
of the Income Tax Act, 1961. b) Movement of deferred tax provision
/adjustment in accordance with Accounting Standard (AS-22)''Accounting
for Taxes on Income'' is as under:
6 As the Company''s business activity falls within a single primary
business segment viz. Motorcycles Parts, the disclosure requirements of
Accounting Standard (AS-17) "Segment Reporting" notified by Companies
(Accounting Standards) Rules, 2006, (as amended) are not applicable.
7 Disclosures as required by Accounting Standard (ASÂ18) ''Related
Party Disclosures**:- a) Key Managerial Personnel
Mr. Neeraj Munjal, Managing Director Dr. Anil Kumar Gupta, Director -
Technical
b) Holding Company
Dayanand Munjal Investments Private Limited
c) Enterprises over which key management personnel and their relatives
are able to exercise significant influence
Munjal Showa Limited
d) The following transactions were carried out with the related parties
in the ordinary course of business:
Mar 31, 2012
OVERVIEW:-
SHIVAM AUTOTECH LIMITED (SAL) was established in the year 1999, and was
initially known as Munjal Auto Components till July, 2005. The company
got later converted to a separate Public Limited Company w.e.f. 29th
July, 2005. In pursuant to the scheme of Demerger arrangement, the
Gurgaon Unit was transferred to Shivam Autotech Ltd. on 1st August,
2005.The Company has been engaged in the manufacturing of Near-Net-
Shaped, auto transmis- sion components mainly for Original Equipments
Manufacturers (OEMs). The product range includes various types of
transmission gears, transmission shafts, spline shafts, plunger, power
train components, employing cold/warm/hot forging techniques.The
Company has two state-of-the-art manufacturing facilities, located at
Gurgaon & Haridwar. The company's new plant in Haridwar was
commissioned in April, 2009 and is equipped with modern and state of
art facilities.The main advantage of cold/ warm forging technology,
which is being used to manufacture near net shaped components, are high
production rates, better dimensional accuracies, excellent surface
finish, substantial savings in material with minimized machining and
having superior mechanical and metallurgical properties.It is listed on
the National Stock Exchange of India and Bombay Stock Exchange in
india.
2 Contingent Liabilities (not provided for) in respect of:-
(Rs. In lacs)
Description 2011-12 2010-11
a) Letter of Credit opened by banks 1,454.88 1,095.91
b) Claims against the Company not
acknowledged as debts 129.77 113.25
3 Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances): Rs.768.71 Lacs
(Previous year Rs.2854.80 Lacs)
4 There are no present obligations requiring provision in accordance
with the guiding principles as enunciated in Accounting Standard AS
29-"Provisions, Contingent Liabilities and Contingent Assets " as it is
not probable that an outflow of resources embodying economic benefits
will be required.
5 Company has availed sales tax incentive amounting to Rs.644.86 Lacs
(Previous Year Rs.605.39 lacs) by the end of 31st March, 2012 in the
form of deferment, in accordance with the scheme of the Govt. of
Haryana for development of Industries. Considering the nature of
incentive and legal opinion taken by the Company, the amount is treated
as Capital Receipt and disclosed as such in the Balance Sheet.
6 Expenditure on insurance includes Rs.6.30 Lacs (Previous Year
Rs.6.30 lacs) being the premium paid under Keyman Insurance Schemes to
cover risks on life of Key Management personnel. 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.
7 Micro Small & Medium Enterprises Development Act,2006
The Company has so far not received information from vendors regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 and hence disclosure relating to amounts unpaid as at the
year -end together with interest paid /payable under this Act has not
been given.
8 AS 15 Employees Benefits Gratuity and Other Post Employment Benefit
Plans Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of servicegets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The Scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The following tables summaries the components of net benefit expense
recognized in the statement of profit and loss account and the funded
status and amounts recognized in the balance sheet for the respective
plans.
9 In the opinion of the Board and to the best of their knowledge and
belief, the value on realisation of loans, advances and current assets
in the ordinary course of business will not be less than the amount at
which they are stated in the Balance Sheet.
10 As the Company's business activity falls within a single primary
business segment viz. Motorcycles Parts, the disclosure requirements of
Accounting Standard (AS-17) "Segment Reporting" notified by Companies
(Accounting Standards) Rules, 2006, (as amended) are not applicable.
11 Disclosures as required by Accounting Standard (ASÃ18) 'Related
Party Disclosures:- a) Key Managerial Personnel
Mr. Neeraj Munjal, Managing Director
Dr. Anil Kumar Gupta, Director-Technical (w.e.f. 20.12.2011)
b) Holding company
Dayanand Munjal Investments Pvt Ltd
c) Enterprises over which key management personnel and their relatives
are able to exercise significant influence
Munjal Showa Limited
Hero MotoCorp Ltd. (Till 31.03.2012)
Hero Corporate Services Limited (Till 31.03.2012)
Arow Infrastructure Limited (Till 31.03.2012)
12 RECLASSIFICATION / PRIOR YEAR COMPARATIVES
The financial statements for the year ended 31st March, 2011 had been
prepared as per the then applicable; pre revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended 31st March, 2012 are prepared as per revised Schedule VI.
Accordingly, the previous year figures have also been reclassified to
conform to this year classification.
Mar 31, 2011
1 Contingent Liabilities (not provided for) in respect of:-
(Rs. In lacs)
Particulars 2010-11 2009-10
a) Unexpired Letter of Credit 1,095.91 1,938.29
b) Claims against the Company not
acknowledged as debts 113.25 102.20
Based on legal opinion taken by the Company, discussions with the
solicitors etc, the Company believes that there is a fair chance of
decisions in respect of the items listed above and hence no provision
is considered necessary against the same.
2 There are no present obligations requiring provision in accordance
with the guiding principles as enunciated in Accounting Standard AS
29-"Provisions, Contingent Liabilities and Contingent Assets " as it is
not probable that an outflow of resources embodying economic benefits
will be required.
3 Company has availed sales tax incentive amounting to Rs. 605.39 lacs
(Previous Year Rs. 546.04 lacs) by the end of 31st March, 2011 in the
form of deferment, to be converted later into Capital Subsidy, in
accordance with the scheme of the Govt. of Haryana for development of
Industries. Considering the nature of incentive and legal opinion taken
by the Company, the amount is treated as Capital Receipt and disclosed
as such in the Balance Sheet.
4 Expenditure on insurance includes Rs.6.30 lacs (Previous Year Rs.6.30
lacs) being the premium paid under Keyman Insurance Schemes to cover
risks on life of Key Management personnel. 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.
5 Micro Small & Medium Enterprises Development Act,2006
The Company has so far not received information from vendors regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 and hence disclosure relating to amounts unpaid as at the
year -end together with interest paid /payable under this Act has not
been given.
6 AS 15 Employees Benefits
Gratuity and Other Post Employment Benefit Plans
Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The Scheme is funded with an insurance company in the form of a
qualifying insurance policy.
Provident Fund and Employhees State insurance
The Company makes contribution to statutory provident fund and Employee
State Insurance in accordance with Employees Provident Fund and
Miscellaneous Provision Act, 1952 and Employee State Insurance Act,
1948 respectively .This is post employment benefit and is in the nature
of defined contribution plan. Contribution made by the Company during
the year is Rs.140.82 lacs. (Previous year Rs. 111.96 lacs)
7 Deferred Tax Liabilities on taking into account the impact of timing
differences between financial statements and estimated taxable income.
A. Deferred Tax Liabilities
Tax Effect of excess Net Block of Fixed assets as per the books of
account over written down value as per the income tax computation
B. Deferred Tax Assets
Retirement benefits * Brought forward Losses
Net Deferred Tax Liabilities (A-B)
* Net of deferred tax charge on transitional provision of revised AS-15
on Employee Benefits adjusted in opening reserves.
8 As the Company's business activity falls within a single primary
business segment viz. Motorcycles Parts, the disclosure requirements of
Accounting Standard (AS-17) "Segment Reporting" notified by Companies
(Accounting Standards) Rules, 2006, (as amended) are not applicable.
9 Related parties disclosure:
a) Key Managerial Personnel
Mr. Neeraj Munjal, Managing Director
b) Enterprises which are able to exercise significant influence over
the company Dayanand Munjal Investments Pvt Ltd Hero Cycles Limited
(Till 31.03.2010)
c) Enterprises over which key management personnel and their relatives
are able to exercise significant influence
Hero Honda Motors Limited
Hero Corporate Services Limited
Munjal Showa Limited
Arow Infrastructure Limited
Rockman Industries Limited (Till 31.03.2010)
Puja Investments Private Limited (Till 31.03.2010)
Anadi Investments Private Limited (Till 31.03.2010)
Hero Investments Private Limited (Till 31.03.2010)
Munjal Auto Industries Ltd. (Till 31.03.2010)
Satyam Auto Components Limited (Till 31.03.2010)
Highway Industries Limited (Till 31.03.2010)
Dayanand Munjal Investments Limited (Till 31.03.2010)
Bahadur Chand Investments Private Limited (Till 31.03.2010)
Thakurdevi Investments Private Limited (Till 31.03.2010)
Bhagyoday Investments Private Limited (Till 31.03.2010)
Munjal Investments Private Limited (Till 31.03.2010)
Highway Industries Limited (Till 31.03.2010)
Munjal Acme Packaging Systems Ltd. (Till 31.03.2010)
Sunbeam Auto Ltd. (Till 31.03.2010)
10 In the opinion of the Board and to the best of their knowledge and
belief, the value on realisation of loans, advances and current assets
in the ordinary course of business will not be less than the amount at
which they are stated in the Balance Sheet.
11 Previous year figures have been regrouped/ rearranged wherever
considered necessary to facilitate comparison with current year figures
III. 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 on annualised basis and is as certified
by the management and relied upon by the auditors being a technical
matter . The installed capacity is calculated on triple shift basis.
(ii) Actual production of Forging Components and Gear blanks Machining
depends on exact specification of the product. The quantities are
indicative of production ,with specifications, which are considered
representative of estimated average product mix.
Mar 31, 2010
1 Details ofContingent Liabilties
(Rs. In lacs)
2009-10 2008-09
a) Unexpired Letter of Credit 1,938.29 516.96
b) Claims notacknowledgedasdebtsbythe company 102.20 93.03
2 Estimated amount of contracts remaining to be executed on Capital
Account and not provided for (Net of advances) - Rs. 412.31 lacs
(Previous Year Rs. 883.38 lacs)
3 There are nopresent obligations requiring provisionin accordance with
the guiding principles as enunciated in Accounting Standard "AS 29" as
itis not probable that anoutflowof resources embodying economic
benefits willbe required.
4 Company has availed sales tax incentive amounting to Rs. 546.04 Lacs
(Previous Year 501.05 lacs) by the end of 31st March, 2010in the formof
deferment, inaccordance with the scheme of the Govt.ofHaryana for
development ofIndustries. Considering the nature of incentive and legal
opinion taken by the company, the amount is treated as Capital Receipt
and disclosed as such in theBalance Sheet.
5 Expenditure on insurance includes Rs.6.30 Lacs (Previous Year Rs.6.30
lacs) being the premium paid under Keyman Insurance Schemes to cover
risks on life of Key Management personnel. 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 accountedinthe yearinwhich they
becomedue.
6 As the Companys business activity falls withina single primary
business segment viz. Motorcycles Parts, the disclosure requirements of
Accounting Standard (AS-17) "Segment Reporting" issued by the Institute
of Chartered Accountants of India, are not applicable.
7 Related parties disclosure:
a) Key Managerial Personnel
Mr. Neeraj Munjal, Managing Director
b) Enterprises which are able to exercise significant influence over
the company
Hero Cycles Limited
c) Enterprisesoverwhichkeymanagementpersonneland
their relatives are abletoexercise significant influence
Hero Honda Motors Limited Rockman Industries Limited
Puja Investments Private Limited
Anadi Investments Private Limited
Hero Investments Private Limited
Hero Corporate Services Limited
Munjal Auto Industries Ltd.
Satyam Auto Components Limited
Highway Industries Limited
Dayanand Munjal Investments Limited
Bahadur Chand Investments Private Limited
Thakurdevi Investments Pivate Limitred
Bhagyoday Investments Private Limited
Munjal Investments Private Limited
Highway Industries Limited
Munjal Acme Packaging Systems Ltd.
Arrow Infrastructure Ltd.
Sunbeam Auto Ltd.
8 Previous year figures have been regrouped/ rearranged wherever
applicable, to facilitate comparsion.
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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