Notes to Financial Account
38. Details of provisions and movements in each class of provisions.
|
(Rs. in Lakhs)
|
|
Particulars
|
Compensated Absences
|
|
Carrying amount as at April 1, 2017
|
80.68
|
|
Add: Provision during the year 2017-18
|
10.30
|
|
Add: Unwinding of discounts
|
-
|
|
Less: Amount utilized during the year 2017-18
|
4.78
|
|
Less: Amount reversed during the year 2017-18
|
-
|
|
Carrying amount as at March 31, 2018
|
86.20
|
| |
|
|
Add: Provision during the year 2018-19
|
3.72
|
|
Add: Unwinding of discounts
|
-
|
|
Less: Amount utilized during the year 2018-19
|
0.18
|
|
Less: Amount reversed during the year 2018-19
|
-
|
|
Carrying amount as at March 31, 2019
|
89.73
|
39. Corporate Social Responsibility (CSR)
(a) CSR amount required to be spent by the Company as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof during the year is Rs. 19.44 Lakhs (Previous Year Rs. 16.54 Lakhs)
(b) Expenditure related to Corporate Social Responsibility is Rs. 20.60 Lakhs (Previous Year Rs. 16.64 Lakhs)
Details of Amount spent towards CSR is given below:
|
(Rs. in Lakhs)
|
|
Particulars
|
2018-19
|
2017-18
|
|
Education
|
3.80
|
6.51
|
|
Health
|
0.36
|
1.32
|
|
Sports For Development
|
0.10
|
7.10
|
|
Arts, Culture and Heritage
|
13.44
|
0.20
|
|
Environment, animal welfare
|
2.90
|
1.50
|
|
Total
|
20.60
|
16.64
|
40. Fair Value of financial assets and liabilities
a) Set out below, is the fair value of the company's financial instruments that are recognized in the financial statements
(Rs. in Lakhs)
|
Sr. No.
|
Particulars
|
Fair Value
|
|
As at March 31, 2019
|
As at March 31, 2018
|
| |
Financial Assets
|
|
|
|
a)
|
Carried at amortized cost
|
|
|
| |
Non Current Loans-Security Deposits
|
144.60
|
140.55
|
| |
Trade receivable
|
4,368.56
|
4,104.01
|
| |
Current loans
|
-
|
562.87
|
| |
Other financial assets
|
8.68
|
11.41
|
| |
Cash and cash equivalent
|
137.67
|
192.95
|
| |
Other bank balances
|
47.91
|
69.90
|
| |
|
4,707.41
|
5,081.68
|
|
b)
|
Carried at FVTOCI
|
|
|
| |
Investments - Non Current
|
0.37
|
0.37
|
| |
|
0.37
|
0.37
|
| |
Financial Liabilities
|
|
|
|
a)
|
Carried at amortized cost
|
|
|
| |
Non Current Borrowings (Incl Current maturities)
|
-
|
13.22
|
| |
Current borrowings at fixed rate of interest
|
244.83
|
816.58
|
| |
Trade payable
|
1,099.79
|
1,041.98
|
| |
Other current financial liabilities (Current)
|
602.87
|
572.67
|
| |
|
1,947.50
|
2,444.46
|
The fair value of the financial assets and liabilities are included at the amount at which the instrument that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date.
The carrying amounts of financial assets and liabilities measured at amortised cost are a reasonable approximation of their fair values.
Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level is given in Note no 31.18 of Significant Accounting Policies.
b) Financial assets and liabilities for which fair value is disclosed
(Rs. in Lakhs)
|
Particulars
|
Level 1
|
Level 2
|
Level 3
|
|
Non current investments -Carried at FVTOCI
|
|
|
|
|
March 31, 2019
|
-
|
-
|
0.37
|
|
March 31, 2018
|
-
|
-
|
0.37
|
41 A. Financial risk management policy and objectives
Company's principal financial liabilities, comprise loans and borrowings, trade and other payables, and other financial liabilities. The main purpose of these financial liabilities is to finance company's operations. Company's principal financial assets include trade and other receivables, security deposits, investments, cash and cash equivalents and other bank balances that derive directly from its operations. Company is exposed to certain risks which includes market risk, credit risk and liquidity risk. Risk Management committee of the company oversees the management of these risks. This committee is accountable to audit committee of the board. This process provides assurance to the company's senior management that company's financial risk- taking activities are governed by the appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with company's policies and risk appetite. The policies for managing these risks are summarised below.
1) Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits, foreign exchange transactions and other financial instruments. The Company uses expected credit loss model for assessing and providing for credit risk.
a) Trade receivable
Customer credit risk is managed by each business unit subject to the company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating score card and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored. Trade receivables are non interest bearing and are generally on 30 days to 75 days credit terms. The company has no concentration of risk as customer base in widely distributed both economically and geographically.
i) Ageing analysis of trade receivable as on reporting date
(Rs. in Lakhs)
|
Particulars
|
Not Due
|
Less than 1 year
|
More than 1 year
|
Total
|
|
March 31, 2019
|
2,982.54
|
1,0858.61
|
297.41
|
4,368.56
|
|
March 31, 2018
|
3,664.13
|
419.71
|
20.17
|
4,104.01
|
ii) Movement of impairment Allowance (allowance for bad and doubtful debts)
|
Particulars
|
Total
|
|
Loss Allowance as at April 1 2017
|
-
|
|
Provided during the year
|
-
|
|
Amounts written off
|
-
|
|
Amount written back
|
-
|
|
Loss Allowance as at 31 March 2018
|
-
|
|
Provided during the year
|
-
|
|
Amounts written off
|
-
|
|
Amount written back
|
-
|
|
Loss Allowance as at 31 March 2019
|
-
|
b) Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the company's treasury department in accordance with company's policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Company monitors rating, credit spreads and financial strength of its counter parties. Based on ongoing assessment company adjust it's exposure to various counterparties. Company's maximum exposure to credit risk for the components of statement of financial position is the carrying amount.
2) Liquidity risk
Liquidity risk is the risk that the company may not be able to meet it's present and future cash flow and collateral obligations without incurring unacceptable losses. Company's objective is to, at all time maintain optimum levels of liquidity to meet it's cash and collateral requirements. Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including overdraft, debt from domestic banks at optimised cost.
The table summarises the maturity profile of company's financial liabilities based on contractual undiscounted payments
(Rs. in Lakhs)
|
Particulars
|
On demand
|
Less than 1 year
|
More than 1 year
|
Total
|
|
a) Trade Payables
|
|
|
|
|
|
March 31, 2019
|
-
|
1,099.79
|
|
1,099.79
|
|
March 31, 2018
|
-
|
1,041.98
|
-
|
1,041.98
|
|
b) Borrowings
|
|
|
|
|
|
March 31, 2019
|
244.83
|
_
|
|
244.83
|
|
March 31, 2018
|
816.58
|
13.22
|
-
|
829.80
|
|
c) Other Financial Liabilities
|
|
|
|
|
|
March 31, 2019
|
17.67
|
585.20
|
|
602.87
|
|
March 31, 2018
|
22.55
|
550.13
|
-
|
572.67
|
The company has access to following undrawn facilities at the end of the reporting period
|
Particulars
|
Floating Rate
|
|
Expiring within 1 Year
|
Expiring beyond 1 Year
|
|
March 31, 2019
|
MCLR 0.90
|
-
|
|
March 31, 2018
|
MCLR 0.90
|
-
|
3) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk interest rate risk, currency risk and other price risk such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and investments. Company's activities expose it to variety of financial risks, including effect of changes in foreign currency exchange rate and interest rate.
a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.The company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
b) Foreign Currency Exposure Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency).
41B. Impairment of financial assets: Expected credit loss Provision for expected credit loss
|
Internal rating
|
Category
|
Description of category
|
Basis of recording expected credit loss
|
|
Loans and deposits
|
Trade receivables
|
|
A
|
High quality asset, negligible credit risk
|
Assets where the counter party has strong capacity to meet obligations and where risk is negligible or nil.
|
12 months expected credit losses
|
Life- time expected credit losses -simplified approach
|
|
B
|
Standard asset, moderate credit risk
|
Assets where there is moderate risk of default and where there has been low frequency of defaults in past.
|
|
C
|
Low quality asset, High credit risk
|
Assets where there is high probability of default. In general, assets where contractual payments are more than year past due are categorised as low quality asset. Also includes where credit risk of counter party has increased significantly through payments may not be more than a year past due.
|
Life- time expected credit losses
|
|
D
|
Doubtful asset- credit impaired
|
Assets are written off, when there is no reasonable expectations of recovery. Where loans and receivables have been written off, the company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognised in profit or loss.
|
Asset is written off
|
As at 31st March 2019
1) Expected credit loss for loans, security deposits and investments
(Rs. in Lakhs)
|
Particulars
|
Asset group
|
Internal rating
|
Estimated gross carrying amount of default
|
Expected probability of default
|
Expected credit losses
|
Carrying amount net of impairment provision
|
|
Loss allowance measured at 12 months expected credit losses
|
Financial assets for which credit risk has not increased significantly from inception
|
Loans
Fixed Deposits
|
A A
|
144.60 32.66
|
|
|
144.60 32.60
|
|
Loss allowance measured at life time expected credit losses
|
Financial assets for which credit risk has increased significantly and not credit impaired
|
Nil
|
|
|
|
|
|
| |
Financial assets for which credit risk has increased significantly and credit impaired
|
Nil
|
|
|
|
|
|
2) Expected credit loss for trade receivables under simplified approach
(Rs. in Lakhs)
|
Particulars
|
Not due
|
Past due but not impaired
|
Total
|
|
Less than 1 year
|
More than 1 year
|
|
Gross carrying amount
|
2,982.54
|
1,088.61
|
297.41
|
4,368.56
|
|
Expected loss rate
|
-
|
-
|
-
|
-
|
|
Expected credit losses (Loss allowance provision
|
-
|
-
|
-
|
-
|
|
Carrying amount of trade receivable (Net of impairment)
|
2,982.54
|
1,088.61
|
297.41
|
4,368.56
|
As at 31st March 2018
1) Expected credit loss for loans, security deposits and investments
(Rs. in Lakhs)
|
Particulars
|
Asset group
|
Internal rating
|
Estimated gross carrying amount of default
|
Expected probability of default
|
Expected credit losses
|
Carrying amount net of impairment provision
|
|
Loss allowance measured at 12 months expected credit losses
|
Financial assets for which credit risk has not increased significantly from inception
|
Loans Fixed Deposits
|
A A
|
703.42
|
55.97 |
55.97 |
703.42
|
|
Loss allowance measured at life time expected credit losses
|
Financial assets for which credit risk has increased significantly and not credit impaired
|
Nil
|
|
|
|
|
|
| |
Financial assets for which credit risk has increased significantly and credit impaired
|
Nil
|
|
|
|
|
|
2) Expected credit loss for trade receivables under simplified approach
(Rs. in Lakhs)
|
Particulars
|
Not due
|
Past due but not impaired
|
Total
|
|
Less than 1 year
|
More than 1 year
|
|
Gross carrying amount
|
3,664.13
|
419.71
|
20.17
|
4,104.01
|
|
Expected loss rate
|
-
|
-
|
-
|
-
|
|
Expected credit losses (Loss allowance provision)
|
-
|
-
|
-
|
-
|
|
Carrying amount of trade receivable (Net of impairment)
|
3,664.13
|
419.71
|
20.17
|
4,104.01
|
42. Capital management
For the purpose of the company's capital management, capital includes issued equity capital , share premium and all other equity reserves. The primary objective of the company's capitaI management is to maximise the shareholders value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. Company monitors capital using a gearing ratio, which is, net debt divided by total capital plus net debt. Company's policy is to keep the gearing ratio between 20% and 40%. The company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents, excluding discontinued operations. However, recently company has focused on becoming zero debt company in order to minimise interest burden and maximum profits.
|
Particulars
|
As at March 31, 2019
|
As at March 31, 2018
|
|
Loans and borrowings (including Current maturities)
|
244.83
|
829.80
|
|
Less: Cash and Bank Balance
|
185.58
|
262.84
|
|
Net debt
|
59.25
|
566.96
|
|
Equity
|
7,771.61
|
7,147.59
|
|
Capital and net debt
|
7,830.86
|
7,714.55
|
|
Gearing %
|
0.76%
|
7.35%
|
43. Leases
Operating lease commitments — Company as lessor
The company has entered into operating leases for land and non-factory building, with lease terms of ten years. The company has the option to lease the assets for additional terms. The lease rent is increased by 10% after 3 years. Future minimum rentals payable under non-cancellable operating leases as at March 31,2019 are as follows:
|
Particulars
|
As at March 31, 2019
|
As at March 31, 2018
|
|
Within one year
|
4.24
|
1.56
|
|
After one year but not more than 5 years
|
18.00
|
-
|
|
More than five year
|
20.52
|
-
|
|
Total
|
42.76
|
1.56
|
44. Segment Reporting
Company operates in single segment as business of Pistons, Pins and Auto Shafts (Auto Components). The Executive Management Committee monitors the operating results of entire company as whole for the purpose of making decisions about resource allocation and performance assessment.
45. Previous Years figures are rearranged and regrouped wherever necessary
|
As per our report of even date
|
For and on behalf of the Board of Directors of
|
|
M/s. P. G. Bhagwat
|
Menon Pistons Limited
|
|
Chartered Accountants
|
|
|
FRN:101118W
|
|
|
Mr. Akshay B. Kotkar
|
Mr. Sachin Menon
|
Mr. R. D. Dixit
|
|
Partner
|
Chairman & Managing Director
|
Director
|
|
Membership No. 140581
|
DIN:00134488
|
DIN:00626827
|
| |
|
|
|
Place : Kolhapur
|
Mr. S.B.P. Kulkarni
|
Mr. Pramod Suryavanshi
|
|
Date : 10.05.2019
|
CFO & Associate Vice President
|
Company Secretary
|
|