Mar 31, 2019
1 Corporate information
Enkei Wheels (India) Limited (âthe Companyâ) is public limited company incorporated and domiciled in India and has its works and registered office in Pune. It also has warehouses in the states of Haryana and Gujarat. The Company is listed on the Bombay Stock Exchange Limited.
The Company manufactures aluminium alloy casting wheels (ââproductsââ), which are being used in automotive segment of the industry in India.
2 Basis of Preparation, Measurement And Significant Accounting Policies
2.1 Basis of preparation of financial statements and measurement
a) These financial statements have been prepared on accrual and going concern basis and are presented in Indian Rupees (INR), the functional currency of the Company.
b) These financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value.
c) These financial statements have been prepared in accordance with the Indian Accounting Standards (Tnd ASâ) as notified by the Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 (âthe Actâ) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
d) All assets and liabilities have been classified as current or non-current as per the Companyâs operating cycle and other criteria set out in Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation 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) The accounting policies adopted by the Company in the preparation of financial statements are consistent with those of the earlier years presented, except otherwise stated.
f) These financial statements are approved for issue by the Companyâs Board of Directors as per its resolution dated May 28, 2019.
2.2 Key Accounting Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires the Companyâs management to make judgments, estimates and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, disclosures relating to contingent liabilities and assets as at the date of the financial statements and the reported amounts of revenues and expenses during the period . Examples of such estimates inter alia, include determination of the useful lives of property, plant and equipment, employee benefits, allowance for doubtful receivables, provision for income taxes and deferred taxes. Accountng estimates could change from period to period. Actual results may differ as a result of changes in the estimates. Revisions to /Changes in accounting estimates are recognised prospectively.
Critical Accounting Estimates used in measurement of the following
(a) Employee benefits -Defined benefit obligations -Note 2.4 (ix) (b)
(b) Provisions and contingent liabilities - Note 2.4 (xv)
(c) Deferred tax assets - Note 2.4 (xiii) (d)
(d) Impairment of Property, Plant & Equipment - Note 2.4 (xiv)
2.3 Recent Accounting Developments
1) Ind AS 116, Leases
On March 30, 2019, the Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases standard, Ind AS 17, Leases, and related interpretations. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires the lessee to recognize assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the Statement of Profit and Loss. The standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17.
âThe effective date for the adoption of Ind AS 116 is annual periods beginning on or after April 1, 2019. The standard permits two possible methods of transition:
- Full retrospective - Retrospectively to each prior period presented applying Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors
- Modified retrospective - Retrospectively, with the cumulative effect of initially applying the standard recognized at the date of initial applicationâ
âUnder modified retrospective approach, the lessee records the lease liability as the present value of the remaining lease payments, discounted at the incremental borrowing rate and the right of use asset either as:
- Its carrying amount as if the standard had been applied since the commencement date, but discounted at the lesseeâs incremental borrowing rate at the date of initial application, or
- An amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments related to that lease recognized under Ind AS 17 immediately before the date of initial application.â
Certain practical expedients are available under both the methods.
On completion of evaluation of the effect of adoption of Ind AS 116, the Company is proposing to use the âModified Retrospective Approachâ for transitioning to Ind AS 116, and take the cumulative adjustment to retained earnings, on the date of initial application (April 1, 2019). Accordingly, comparatives for the year ended March 31, 2019 will not be retrospectively adjusted. The Company has elected certain available practical expedients on transition.
âThe effect of adoption as on transition date would majorly result in an increase in right of use asset approximately by Rs. 1,300 crore, net investment in sub-lease approximately by Rs. 550 Crore and an increase in lease liability approximately by Rs. 2,000 crore.â
2) Ind AS 12, Appendix C, Uncertainty over Income Tax Treatments
On March 30, 2019, the Ministry of Corporate Affairs has notified Ind AS 12, Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies have used or plan to use in their income tax filing which has to be considered to compute the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.
âThe standard permits two possible methods of transition:
- Full retrospective approach - Under this approach, Appendix C will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors, without using hindsight, and
- Retrospectively with cumulative effect of initially applying Appendix C recognized by adjusting equity on initial application, without adjusting comparativesâ
âThe effective date for adoption of Ind AS 12 Append ix C is annual periods beginning on or after April 1, 2019. The Company will adopt the standard on April 1, 2019 and has decided to adjust the cumulative effect in equity on the date of initial application i.e. April 1, 2019 without adjusting comparatives. The effect on adoption of Ind AS 12 Appendix C would be insignificant in the standalone financial statements.â
3) Amendment to Ind AS 12, Income taxes
On March 30, 2019, the Ministry of Corporate Affairs issued amendments to the guidance in Ind AS 12, Income Taxes, in connection with accounting for dividend distribution taxes.
The amendment clarifies that an entity shall recognize the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events. Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company is currently evaluating the effect of this amendment on the standalone financial statements.
4) Amendment to Ind AS 19, plan amendment, curtailment or settlement
On March 30, 2019, the Ministry of Corporate Affairs issued amendments to Ind AS 19, Employee Benefits, in connection with accounting for plan amendments, curtailments and settlements.
âThe amendments require an entity :
- To use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and
- To recognize in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognized because of the impact of the asset ceiling.â
âEffective date for application of this amendment is annual period beginning on or after April 1, 2019.
The Company does not have any impact on account of this amendment.â
Note : 5 Additional information to the financial statements
a Share Capital
During the year, the Company has allotted 8,11,000 equity shares issued on preferential basis to its promoter & holding Company ENKEI CORPORATION, Japan after receiving the requisite approvals from the regulatory authorities.
b Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
c Disclosure under regulation 34 (3) of SEBI (Listing Obligations & Disclosure requirement) Regulations, 2015
Amount of loan and advances in nature of loans outstanding from subsidiaries:
d Details of the year-end foreign currency exposures that have been hedged
The company has entered into foreign exchange forward contracts to partly hedge its risks associated with the foreign currency fluctuations relating to firm commitments. Forward Exchange Contracts entered into by the Company and remained outstanding at the year end are:
n Details of employee benefits as required by Ind-AS 19 - âEmployee benefits are as underâ:
1 Defined contribution plan - Provident fund The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised the following amounts in its Statement of Profit and Loss.
2 Defined benefit plan
i) The defined benefit plan comprises gratuity and compensated absences which are funded.
ii) Actuarial gains and losses in respect of defined benefit plans are recognized in the Other Comprehensive Income (OCI). The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Gratuity is a benefit to an employee in India based on 15 days last drawn salary for each completed year of service with a vesting period of five years.
These defined benefit plans expose the Company to actuarial risks, such as longevity risk and interest rate risk.
a. The discount rate is based on prevailing yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligation.
b. Salary Escalation Rate: The estimates of future salary increases takes into account the inflation, seniority, promotion and other relevant factors.
Sensitivity Analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.
a. The discount rate is based on prevailing yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligation.
b. Salary Escalation Rate: The estimates of future salary increases takes into account the inflation, seniority, promotion and other relevant factors.
Sensitivity Analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.
p Disclosure in respect of Leases pursuant to Indian Accounting Standard (Ind AS-17) âLeasesââ,
i) where the Company is a lessee:
Operating Leases
The Company has operating leases in respect of its plants, premises, computers, etc. Further, lease rentals payable in respect of the same which are non-cancellable are as follows.
Segment information
q âThe Company has single operating segment, that of manufacturing of automotive wheels. Accordingly, disclosure requirements as per Indian Accounting Standard (Ind AS) 108 -âOperating Segmentâ are not applicable to the Company.
ii) Fair value hierarchy
Financial assets and liabilities include cash and cash equivalents, other balances with banks, trade receivables, deposits, other financial assets, trade payables and other financial liabilities whose fair values approximate their carrying amounts largely due to the short-term nature of such assets and liabilities.
The following table presents fair value hierarchy of assets and liabilities measured at fair value as on March 31, 2019:
Valuation technique and significant unobservable inputs:
Level 2:
(i) Derivative financial liabilities / assets are valued based on inputs that are directly or indirectly observable in the market. Financial Instruments measured/carried at amortised cost:
The management believes that the fair value of financial assets and financial liabilities, both current and non-current, measured at amortised cost is not materially different from carrying amount.
iii) Financial risk management
The Companyâs activities exposes it various financial risks, such as market risk (including currency risk, interest rate risk and price risk), credit risks and liquidity risks. The Companyâs overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Companyâs financial performance. The Companyâs management have overall responsibility for the establishment and oversight of the Companyâs risk management framework. Derivatives are used for hedging of foreign currency liabilities and not as a trading or speculative purposes.
The Company has exposure to the following risks arising from financial instruments:
a. Credit risk
Credit risk is the risk of financial losses to the Company if a customer or counterparty to financial instruments fails to discharge its contractual obligations. It arises primarily from the Companyâs receivables from customers, bank balances and cash deposits. To manage this, the Company periodically assesses the balances of its trade receivables. As per Ind-AS 109 : Financial Instruments, the Company uses expected credit loss model to assess the impairment loss, if any.
The carrying amount of trade and other receivables and other financial assets represents the maximum credit exposure.
i. Trade receivables
The management has established the policies under which customer accounts are regularly reviewed and monitored. The Company has a dedicated sales team which is responsible for reviewing, monitoring customer accounts and collecting dues from them within the credit period. Anyhow, almost all its customer base are OEMs and the Company does not have make follow ups for the collections.
ii. Financial instruments and Cash deposits
Credit risk from bank balances bank deposits, derivative financial instruments is considered immaterial in view of the creditworthiness of the banks the Company works with. Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with Companyâs policy. The company monitors rating, credit spreads and financial strength of its counter parties. Based on ongoing assessment Company adjust itâs exposure to various counterparties.
b. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both, in normal and exceptional conditions. In this respect, the Companyâ strategy, articulated by its Treasury Department, is to maintain the necessary financing flexibility through the availability of committed credit lines.
The Company has a view of maintaining liquidity and to take minimum possible risk for which company monitors its cash and bank balances periodically in view of its short term obligations associated with its financial liabilities.
The liquidity position at each reporting date is given below:
c. Market risk
âMarket risk is a risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. Market risk comprises three types of risks, interest rate risk, currency risk and other price risk such as equity price risk. Financial instruments affected by market risk include borrowings, trade and other payables, foreign exchange forward contracts, security deposit, trade and other receivables and deposits with banks.â
i. Foreign currency risk
Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate. Company transacts business in its functional currency (INR) and in other foreign currencies such as USD and JPY. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities, where purchases (about 80 % of total purchases) is denominated in a foreign currency. The Company manages its foreign currency risk by hedging some part of its foreign currency liabilities loan using foreign currency forward contracts . The Company negotiates the terms of those foreign currency forward contracts to match the terms of the hedged exposure.
The details of foreign currency exposures that have not been hedged by derivative instruments at the Balance Sheet date are provided in Note 36 (d) of the financial statements. The same is reproduced here.
ii. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. the interest rate profile At the reporting date, the Companyâs interest bearing financial instruments are follows:
The sensitivity analysis below has been determined based on exposure to interest rate. For floating rate liabilities, analysis is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for the whole year. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:
Capital management
âFor the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. The Company maintains healthy capital gearing ratio by keeping debts to the minimum possible and infusion of funds from shareholders by the preferential allotments.
No changes were made in the objectives, policies or processes for managing capital during the year ended March 31 2019 and March 31 2018.â
Mar 31, 2018
1 Corporate information
Enkei Wheels (India) Limited (âthe Companyâ) is public limited company incorporated and domiciled in India and has its works and registered office are in Pune. The Company is listed on the Bombay Stock Exchange Limited.
The Company manufactures aluminium alloy casting wheels (ââproductsââ), which are being used in automotive segment of the industry in India.
a) Rights of the Equity Share holders
The Company has one class of equity shares of face value of Rs. 5/-each. Each shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the equity shareholders will be entitled to receive any of the remaining assets of the Company in proportion to their shareholding after distribution of all preferential amounts.
2. Additional information to the financial statements
a. Share Capital
During the year, the Company has allotted 5,35,000 equity shares issued on preferential basis to its promoter & holding Company ENKEI CORPORATION, Japan after receiving the requisite approvals from the regulatory authorities.
b. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
c. Details of the year-end foreign currency exposures that have been hedged
The company has entered into foreign exchange forward contracts to partly hedge its risks associated with the foreign currency fluctuations relating to firm commitments. Forward Exchange Contracts entered into by the Company and remained outstanding at the year end are :
d. Employee benefit plans
The Company has adopted Accounting Standard 15 âEmployee Benefitsâ. The disclosures required by the Standard are given below:
Defined contribution plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 10,243,641/- (Year ended March 31, 2017 Rs. 9,732,174/-) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
Defined benefit plans
The Company offers the following employee benefit schemes to its employees:
i. Gratuity
ii. Leave Entitlements
Disclosures of Defined Benefit Plans in respect of Gratuity and Leave Entitlements, as per actuarial valuations by an independent valuer. The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:
The estimates of future salary increase, considered in actuarial valuation, take into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The above information is certified by the actuary.
e. Disclosure in respect of Leases pursuant to Accounting Standard (AS-19) ââLeasesââ.
f) where the Company is a lessee : Operating Leases
The Company has operating leases in respect of its plants, premises, computers, etc. Further, lease rentals payable in respect of the same which are non-cancellable are as follows.
Other Notes
a. The Company has single operating segment, that of automotive wheels. Accordingly, disclosure & requirements as per Indian Accounting Standard (Ind As) 108 - âOperating segmentâ are not applicable to the company.
g Reconciliation of total liabilities,total assets,total comprehensive income and cash flows as reported as per Ind AS,in this statement with as reported in previous years as per previous Indian GAAP
h. In the opinion of the board, current assets have a value on realisation, in the ordinary course of the Companyâs business, equal to the amount at which these are stated.
i. Figures of the previous year have been regrouped, reclassified & restated wherever necessary to correspond with the current year classification /disclosure.
Mar 31, 2017
1. Rights of the Equity Share holders
The Company has one class of equity shares of face value of Rs.5/-each. Each shareholder is eligible for one vote per share held. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
2. Employee benefit plans
The Company has adopted Accounting Standard 15 Employee Benefits . The disclosures required by the Standard are given below:
Defined contribution plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.9,732,174/- (Year ended 31 March, 2016 Rs.10,498,657/-) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
Defined Benefit plans
The Company offers the following employee benefit schemes to its employees :
3.. Gratuity
4. Leave Entitlements
5. The Company is engaged in the manufacturing of aluminum alloy casting wheels which constitutes a single business segment. Accordingly, primary and secondary reporting disclosures for business/geographical segment as envisaged in Accounting Standard 17 notified under the Companies (Accounting Standards) Rules, 2006, which continue to apply under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 are not applicable to the Company.
6. In the opinion of the board, current assets have a value on realization, in the ordinary course of the Company''s business, equal to the amount at which these are stated.
7. Figures of the previous year have been regrouped, reclassified & restated wherever necessary to correspond with the current year classification /disclosure.
Mar 31, 2016
Defined benefit plans
For defined benefit plans, such as gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss of the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested or otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets.
Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the period when the employees render the service. These benefits include compensated absences such as paid annual leave, bonus, and performance incentives.
Long-term employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as a liability determined by actuarial valuation, at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled.
1. Borrowing costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs incurred and which are not identified to the particular qualifying assets is charged to the revenue. Qualifying assets are those that necessarily take a substantial period of time to get ready for their indented use. A longer period than period of twelve months has been considered as a substantial period of time in exceptional and unforeseen circumstances.
2. Leases
a. Operating Leases : Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating leases. Lease payments under operating leases are recognized as an expense and are charged to the Statement of Profit and Loss on a straight line basis over the lease term.
b. Finance Leases : Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease whichever is lower. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to the Statement of Profit and Loss.
3. Taxes on income
a. Tax expense comprises of current income tax and deferred tax.
b. Current tax is the amount of tax due & payable on the taxable income as determined in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will utilize the credit in near future. Accordingly, MAT is recognized as an asset in the Balance Sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will flow to the Company.
c. Deferred tax expense (or credit) is recognized subject to the consideration of prudence, on timing differences between accounting income and taxable income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws than have been enacted or substantially enacted by the balance sheet date.
d. Deferred tax assets in respect of unabsorbed depreciation, carry forward of losses etc. are recognized, but only to the extent of Deferred tax liabilities, if it has legally enforceable right and those relate to taxes on income levied by the same governing taxation laws.
e. During the year, the Company has also provided Deferred tax liability (net) in respect of Foreign Currency Monetary Item Translation Difference (FCMITD) for the year. This is a change in accounting policy, as till the last financial year, the Company has not provided deferred tax, either expense or credit on account of FCMITD. Had the Company not provided deferred tax expense on account of FCMITD, its loss after tax would have been lower by Rs. 3,05,12,120/
4. Impairment of assets
a. The management of the Company periodically assesses using external and internal sources, whether there is an indication that an asset may be impaired. An asset is treated as impaired when the carrying amount of the asset exceeds it recoverable value. An impairment loss, if any is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
b. Assets/facilities retired from active use and held for re-work/disposal are classified separately as ''Assets held for Disposal''. In such situations, impairment loss is charged to the statement of Profit and Loss, in the year in which the loss is crystallized and quantified with ease.
5. Provisions, contingencies and commitments
a. Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.
b. Contingent Liabilities are not recognized but are disclosed in the financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.
(c) Rights of the Equity Share holders
The Company has one class of equity shares of face value of Rs. 5/- each. Each shareholder is eligible for one vote per share held. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
There is no default, continuing or otherwise in repayment of loans and interest as on the balance sheet date.
NOTE : 6. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS
a Share Capital
During the year, the Company has allotted 7,06,500 equity shares issued on preferential basis to its promoter & holding Company ENKEI CORPORATION, Japan after receiving the requisite approvals from the regulatory authorities.
d Details of the year-end foreign currency exposures that have been hedged
The company has entered into foreign exchange forward contracts to partly hedge its risks associated with the foreign currency fluctuations relating to firm commitments. Forward Exchange Contracts entered into by the Company and remained outstanding at the year end are :
m Employee benefit plans
The Company has adopted Accounting Standard 15 âEmployee Benefits". The disclosures required by the Standard are given below :
Defined contribution plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 10,498,657/- (Year ended 31 March, 2015 Rs. 9,762,779/-) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
Defined Benefit plans
The Company offers the following employee benefit schemes to its employees :
i. Gratuity
ii. Leave Entitlements
The estimates of future salary increase, considered in actuarial valuation, take into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The above information is certified by the actuary.
Note: Related parties have been identified by the Company''s Management.
Note: Figures in CY relates to the year 2015-16 and PY relates to the year 2014-15
o Disclosure in respect of Leases pursuant to Accounting Standard (AS-19) '''' Leases''''.
i) where the Company is a lessee :
Finance Leases
The Company has acquired a vehicle (motor car) on finance lease. The lease covers a period, which is fixed and non-cancellable. The minimum lease rentals and the present value of minimum lease payments in respect of assets acquired under finance leases are as follows.
Operating Leases
The Company has operating leases in respect of its plants, premises, computers, etc. Further, lease rentals payable in respect of the same which are non-cancellable are as follows.
Other Notes :
p The Company is engaged in the manufacturing of aluminum alloy casting wheels which constitutes a single business segment. Accordingly, primary and secondary reporting disclosures for business/geographical segment as envisaged in Accounting Standard -17 notified under the Companies (Accounting Standards) Rules, 2006, which continue to apply under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 are not applicable to the Company.
q In the opinion of the board, current assets have a value on realization, in the ordinary course of the Company''s business, equal to the amount at which these are stated.
r Figures of the previous year have been regrouped, reclassified & restated wherever necessary to correspond with the current year classification /disclosure.
Mar 31, 2015
1 Corporate information
Enkei Wheels (India) Limited ("the Company") is listed on the Bombay
Stock Exchange. It is engaged in the manufacturing of aluminium alloy
casting wheels ("products") mainly used in automotive segment of the
industry in India. At times, the Company has also traded in the
products mainly to supplement its manufacturing capacities.
(a) Rights of the Equity Share holders
The Company has one class of equity shares of face value of ' 5/-each.
Each shareholder is eligible for one vote per share held. In the event
of liquidation the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
NOTE 2 NOTES FORMING PART OF FINANCIAL STATEMNETS :
Note 2 Additional information to the financial statements a Share
Capital
During the year, the Company has alloted 6,71,000 equity shares issued
on preferential basis to its promoter & holding company ENKEI
Corporation, Japan after receiving the requisite approvals from the
regulatory authorities.
Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
c Disclosure as per Clause 32 of the Listing Agreements with the Stock
Exchanges
Loans and advances in the nature of loans given to subsidiaries,
associates and others and investment in shares of the Company by such
parties:
Note: Figures in bracket relate to the previous year ended 31st March
2014.
d Details of the year-end foreign currency exposures that have been
hedged
The company has entered into foreign exchange forward contracts to
partly hedge its risks associated with the foreign currency
fluctuations relating to firm commitments. Forward Exchange Contracts
entered into by the Company but remained outstanding at the year end
are :
(Amt. in Rs)
As at As at
31st March, 31st March,
2015 2014
Contingent liabilities and commitments
(to the extent not provided for)
(i) Contingent liabilities
(a) Claims against the Company /disputed
liabilities not acknowledged as debts* 55,850,000 5,000,000
(b) Guarantees and Letters of Credits issued
by the banks 2,000,000 1,580,452
(c) Other money for which the company is
contingently liable - Differential Tax
Liability - C Forms not received 822,086,643 343,754,772
Note 3 Disclosures under Accounting Standards (contd.) m Employee benefit
plans The Company has adopted Accounting Standard 15 "Employee Benefits
The disclosures required by the Standard are given below:
Defined contribution plans
The Company makes Provident Fund contributions to defined contribution
plans for qualifying employees. Under the Schemes, the Company is
required to contribute a specified percentage of the payroll costs to
fund the benefits. The Company recognised Rs. 8,925,540/- (Year ended 31
March, 2014 Rs. 7,454,411/-) for Provident Fund contributions in the
Statement of Profit and Loss. The contributions payable to these plans
by the Company are at rates specified in the rules of the schemes.
Defined Benefit plans
The Company offers the following employee benefit schemes to its
employees:
i. Gratuity
ii. Leave Entitlements
Disclosures of Defined Benefit Plans in respect of Gratuity and Leave
Entitlements, as per actuarial valuations by an independent valuer. The
following table sets out the funded status of the defined benefit
schemes and the amount recognised in the financial statements:
Mar 31, 2014
1 Corporate information
Enkei Wheels (India) Limited (the Company) is listed on the Bombay
Stock Exchange. It is engaged in the manufacturing of aluminium alloy
casting wheels (products) mainly used in automotive segment of the
industry in India. At times, the Company has also traded in the
products mainly to supplement its manufacturing capacities.
1.(a) Rights of the Equity Share holders
Each shareholder is eligible for one vote per share held. In the event
of liquidation the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
Note : The balances reported above are subject to confirmation
/reconciliation from the customers. The Company has initiated steps in
this regard. However, all receivables are goods and realisable in the
ordinary course of its business.
Note :Bank Balances do not include any margin monies. There are no
deposits which have an original maturity or maturity of more than 12
months from the balance sheet date.
* The figures are in respect of main raw material, i.e. alluminium
ingots. The figures of consumption have been arrived by dedcuting the
closing stock from the quantity/value of opening stock as inceased by
the purchases during the year.
NOTE 2 NOTES FORMING PART OF FINANCIAL STATEMNETS :
a Share Application Money Pending for Allotment
The Company has received share application money of Rs. 33,550,000/- on
2nd Dec 2013 towards proposed issue of 6,71,000 equity share on
preferential basis to the Eneki Corporation, Japan.
The members of the Company have approved the proposed issue in their
Extra oridinary General Meeting held on 13th Dec 2013. However, the
requisite approval from the regulatory authorities for the same has
been pending on the balance sheet date. As a result, the share could
not be allotted to the applicant, which is none other than its Holding
and Promoter Company. The application mony received has been shown in
the Balance sheet as "Share application money pending allotment."
Dues to Micro and Small Enterprises have been determined to the extent
such parties have been identified on the basis of information available
with the Company. This has been relied upon by the auditors.
Note: Figures in bracket relate to the previous year ended 31st March
2012.
l Contingent liabilities and commitments (to the extent not provided
for)
(i) Contingent liabilities
(a) Claims against the Company not
acknowledged as debt 5,000,000 -
(b) Guarantees 500,000 -
(c) Letters of Credits issued by the
bank for imports 1,080,452 -
(d) Differential Tax Liability - C
Forms not received 343,754,772 327,959,232
(ii) Commitments
(a) Estimated amount of contracts
remaining to be executed
on capital account and not
provided for - Tangible Assets 12,466,328 111,329,243
(b) Other Commitments - -
n Employee benefit plans
The Company has adopted Accounting Standard 15 "Employee Benefits". The
disclosures required by the Standard are given below:
Defined contribution plans
The Company makes Provident Fund contributions to defined contribution
plans for qualifying employees. Under the Schemes, the Company is
required to contribute a specified percentage of the payroll costs to
fund the benefits. The Company recognised Rs. 7,454,411/- (Year ended
31 March, 2013 Rs. 6,097,720/-) for Provident Fund contributions in the
Statement of Profit and Loss. The contributions payable to these plans
by the Company are at rates specified in the rules of the schemes.
Defined Benefit plans
The Company offers the following employee benefit schemes to its
employees:
i. Gratuity
ii. Leave Entitlements
The estimates of future salary increase, considered in actuarial
valuation, take into account of inflation, seniority, promotion and
other relevant factors, such as supply and demand in the employment
market. The above information is certified by the actuary.
p Disclosure in respect of Leases pursuant to Accounting Standard
(AS-19) "Leases".
i) where the Company is a lessee :
Finance Leases
The Company has acquired a vehicle (motor car) on finance lease. The
lease covers a period, which is fixed and non- cancellable. The minimum
lease rentals and the present value of minimum lease payments in
respect of assets acquired under finance leases are as follows.
Operating Leases
The Company has operating leases in respect of its plants, premises,
computers, etc. Further, lease rentals payable in respect of the same
which are non-cancellable are as follows.
q Figures of the previous year have been regrouped & reclassified
wherever necessary to correspond with the current year classification/
disclousre.
Mar 31, 2013
1 Corporate information
Enkei Wheels (India) Limited (the Company) is listed on the Bombay
Stock Exchange. It is engaged in the manufacturing and selling of
aluminium alloy casting wheels (products) mainly used in automotive
segment of the industry in India. At times, the Company has also traded
in the products mainly to supplement its manufacturing capacities.
a Compulsorily Convertible Preference Shares
The Board of Directors in its meeting held on 5th Feb''2013 approved the
conversion of 39,51,250 Compulsorily Convert- ible Preference Shares of
Face value of Rs. 10/- each earlier issued on preferential basis.
Accordingly,5,21,860 equity shares of Face value of Rs. 5/- each at a
premium of Rs. 70/- each have been alloted to the promoter company, viz.
Enkei Corporation, Japan. The said allotment is in compliance with
clause 40A of the Listing Agreement.
b Employee benefit plans
The Company has adopted Accounting Standard 15 "Employee Benefits". The
disclosures required by the Standard are given below:
Defined contribution plans
The Company makes Provident Fund contributions to defined contribution
plans for qualifying employees. Under the Schemes, the Company is
required to contribute a specified percentage of the payroll costs to
fund the benefits. The Company recognised Rs. 6,097,720/- (Year ended 31
March, 2012 Rs. 5,035,767/-) for Provident Fund contributions in the
Statement of Profit and Loss. The contributions payable to these plans
by the Company are at rates specified in the rules of the schemes.
c Disclosure in respect of Leases pursuant to Accounting Standard
(AS-19) " Leases".
i) where the Company is a lessee : Finance leases
The Company has acquired a vehicle (motor car) on finance lease. The
lease covers a period of 36 months, which is fixed and non-cancellable.
The minimum lease rentals and the present value of minimum lease
payments in respect of assets acquired under finance leases are as
follows.
d Figures of the previous year have been regrouped & reclassified
wherever necessary.
Mar 31, 2012
1 Corporate information
Enkei Wheels (India) Limited (the Company) is listed on the Bombay
Stock Exchange. It is engaged in the manufacturing and selling of
aluminium alloy casting wheels (products) mainly used in automotive
segment of the industry in India. At times, the Company has also traded
in the products mainly to supplement its manufacturing capacities.
*0f total number of equity shares issued, 11,000,000 (PY 11,000,000)
equity shares were issued pursuant to the scheme of arrangement
(de-merger) of wheel division of Enkei Castalloy Limited (Now, Alicon
Castalloy Limited) into the Company without payment being received in
cash.
Rights of the Preference Share Holders:
(i) The right to a Cumulative Preferential dividend at such rate as may
be prescribed by the terms of issue of such shares, on the share
capital for the time being paid-up thereon, free of Company's
income-tax, but subject to deduction of taxes at source at the rate or
rates prescribed from time to time.
(ii) The right in the event of winding up to payment of such capital
and arrears of dividend, whether earned, accrued, declared or not, down
to the commencement of the winding up, in priority to the Equity Shares
but shall not confer any further right to participate in profits or
assets.
(iii) The Preference Shares shall not confer on the holders thereof the
right to either in person or by proxy at any General Meeting of the
Company the extent and in the manner provided by Section 87 (2) of the
Act.
* Restriction of Preference Share Holders
Convertible Preference Shares will be locked in for entire tenure of 18
months from date of allotment and will not be listed. Equity shares
issued pursuant to conversion of preference shares will be locked in
for a period of 3 years from the date of allotment of convertible
preference shares and will be listed on the stock exchange wherever
equity shares are listed.
Allotment of equity shares on conversion of preference shares
The Board of Directors in its meeting held on 13th February 2012
approved the conversion of 9,251,250 Compulsorily Convertible
Preference Shares of Face value of Rs. 10/- each earlier issued on
preferential basis. Accordingly, 1,233,500 equity shares of Face value
of Rs. 5/- each at a premium of Rs. 70/- each have been alloted to the
promoter company, viz. Enkei Corporation, Japan. The said allotment is
in compliance with clause 40A of the Listing Agreement. Balance
3,913,950 Compulsorily Convertible Preference Shares will be dealt with
as advised by the Reserve Bank of India, where necessary papers are
being filed.
Rights of the Equity Share holders
Each shareholder is eligible for one vote per share held. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting, except in case of
interim dividend. In the event of liquidation, the equity shareholders
are eligible to receive the remaining assets of the company after
distribution of all preferential amounts, in proportion to their
shareholding.
1.1 Compulsorily Convertible Preference Shares
The Board of Directors in its meeting held on 13th February 2012
approved the conversion of 9,251,250 Compulsorily Convertible
Preference Shares of Face value of Rs. 10/- each earlier issued on
preferential basis. Accordingly, 1,233,500 equity shares of Face value
of Rs. 5/- each at a premium of Rs. 70/- each have been alloted to the
promoter company, viz. Enkei Corporation, Japan. The said allotment is
in compliance with clause 40 A of the Listing Agreement. Balance
3,913,950 Compulsorily Convertible Preference Shares will be dealt with
as advised by the Reserve Bank of India, where necessary papers are
being filed.
1.2 Contingent liabilities and commitments (to the extent not
provided for) (Rs.)
For the
year ended For the
year ended
(I) Contingent liabilities 31" March
2012 31" March
2011
a Claims against the company not
acknowledged as debt Nil Nil
b Guarantees Nil Nil
c Letters of credits issued by
the bank for imports Nil 12,259,968
d Differential tax liability
- C Forms not received 643,196,878 361,914,270
(ii) Commitments
a Estimated amount of contracts
remaining to be executed on capital
account and not provided for-
Tangible Assets 54,052,738 7,529,033
b Other Commitments Nil Nil
Note
2 Employee benefit plans
The company has adopted Accounting Standard 15 "Employee Benefits". The
disclosures required by the Standard are given below:
2.1 Defined contribution plans
The company makes provident fund contributions to defined contribution
plans for qualifying employees. Under the schemes, the company is
required to contribute a specified percentage of the payroll costs to
fund the benefits. The company recognised Rs.5,035,767/- (Year ended
31st March 2011 Rs.3,929,324/-) for provident fund contributions in the
Statement of Profit and Loss. The contributions payable to these plans
by the company are at rates specified in the rules of the schemes.
2.2 Defined benefit plans
The company offers the following employee benefit schemes to its
employees:
i. Gratuity
ii. Leave Entitlements
Disclosures of defined benefit plans in respect of gratuity and leave
entitlements, as per actuarial valuations by an independent valuer.
The following table sets out the funded status of the defined benefit
schemes and the amount recognised in the financial statements:
Mar 31, 2010
1. Enkei Wheels (India) Ltd. was incorporated on 30.03.2009 under the
Companies Act, 1956. The entire share capital of the Company was held
by Enkei Castalloy Ltd. However, since there was no single business
activity during the year ended 31.03.2009, the accounts were not
prepared and filed. Hence, the present accounts are for the period
beginning with 30.03.2009 and ending with 31.03.2010. This being the
first accounting period of the Company, figures of the previous
year/period are not applicable. On the same footing, the requirement of
preparation of cash flow statement is not applicable to the Company.
2. Pursuant to the Scheme of Arrangement (de-merger) sanctioned by the
Hon'ble High Court of Bombay, the Wheel Division of Enkei Castalloy
Limited (ECL/ Demerged Company) was de-merged into Enkei Wheels (India)
Limited ('EWIL/ Resulting Company') with effect from end of the day of
31st March 2010.
The Scheme had provided that 'though it shall become effective from the
Effective Date, i.e. the date on which the certified copy of the order
of High Court of Bombay under sections 391 and 394 of the Companies
Act, 1956, sanctioning the scheme is filed with the Registrar of
Companies, Pune and which is end of the day of 31st March 2010, the
provisions of the Scheme shall be applicable and come into operation
from the Appointed Date, which means the 1st day of April 2009 or such
other date as may be approved by the High Court of Bombay'.
Now, since the High Court of Bombay has sanctioned the Scheme of
de-merger and the Appointed Date being as defined in the Scheme, all
assets and liabilities in respect of the Wheel Division of ECL/Demerged
Company, as appearing in the books of ECL/ Demerged Company as on 1st
April 2009, i.e. the Appointed Date as defined in the Scheme, were
transferred to and vested with EWIL/Resulting Company'.
In the light of the above and the clause 4 of the Scheme which provides
that 'upon the coming into effect of this Scheme and on and from the
Appointed Date entire business of the 'Wheel Division' of ECL/ Demerged
Company shall, without any further act, instrument or deed, subject to
other provisions of the Scheme and pursuant to sections 391 & 394(2)
and other relevant provisions of the Act, be transferred to and vested
in or be deemed to have been demerged from ECL/ Demerged Company and be
transferred to and vested in EWIL/Resulting Company, as a going
concern." the old shareholding of ECL/ Demerged Company in
EWIL/Resulting Company stood automatically cancelled and EWIL/
Resulting Company have ceased to be a wholly owned subsidiary of
ECL/Demerged Company as an integral part of the Scheme, pending the
allotment of shares by EWIL/ Resulting Company to the existing
shareholders of ECL/Demerged Company and completion of all necessary
legal formalities including payment of stamp duty, incidental to the
demerger by EWIL/ Resulting Company. Pending adjudication of stamp duty
on immovable properties received from ECL/ Demerged Company on
demerger, EWIL/ Resulting Company has not provided for the necessary
expense in the accounts.
As a result of all the above, accounting entries pursuant to PART-IV of
the Scheme have been made in the books of the EWIL/Resulting Company
retrospectively from the Appointed Date, i.e. 1stApril 2009 and which
are summarised below.
a) Book value of Assets net of Liabilities transferred from ECL/
Demerged Company recorded on 01.04.2009..............Rs. 9,08,92,308/-
b) Credit to Share Capital Account.............................Rs.
5,50,00,000/-
(aggregate face value of Equity Shares issued to the shareholders of
ECL/ Demerged Company pursuant to clause 12.1.1 of Part II of the
Scheme, pending receipt of statutory approvals and completion of
legalities as of the Balance sheet Date.)
c) Credit to Securities Premium Account......................Rs.
3,58,92,308/-
(Excess of book value of Assets net of Liabilities received from ECL/
Demerged Company over face value of Equity Shares - (a-b))
3. In pursuance of Part IV of the Scheme, post demerger and as
identified by the Board of directors, EWIL/ Resulting Company has
valued its immovable properties at their fair value based on the
valuation report from an independent registered valued and the excess
of such value over the book value has been credited to 'Business
Reconstruction Reserve.'
4. Segment Reporting
The Company has single business segment viz. that of automotive
castings of Alloy Wheels. Accordingly, disclosure requirements as per
Accounting Standard 17 "Segment Reporting" specified in the Companies
(Accounting Standard) Rules 2006 are not applicable to the Company.
5. Excise Duty
Excise Duty being recovered from the customers through sales invoices
raised on them during the year, have been reported separately as a
deduction from 'Income from Operations' in the Profit and Loss
account".
6. Fixed Assets
Book values of Fixed Assets as recorded in the books of the Company on
01.04.2009 are the same received from demerged company. However, legal
formalities including payment of stamp duty, offering those to the
banks/institutions for fresh charges, registrations etc. are pending.
7. Borrowing Cost
Of total borrowing cost of Rs.5.17 lakhs incurred during the year has
been debited to Capital Work in progress.
8. Bank Balances
Maximum Balance outstanding in current accounts with the scheduled and
foreign banks is as under:
9. Confirmation under Micro, Small and Medium Enterprises Act, 2006
During the year, the Company initiated the process of obtaining the
confirmation from its suppliers as regard to their status under Micro,
Small and Medium Enterprises Act, 2006 (Act), but was able to obtain
only for some enterprises. On the basis of information available, the
principal amount remaining unpaid to Micro and Small Enterprises
covered under the Act as at the end of the year have been shown and
classified separately under schedule 10 for Current Liabilities.
10. Year-end balances the receivables, advances and payables are
subject to confirmation and reconciliations. However, post demerger and
in accordance with Part IV of the Scheme, old debtors of Rs.223.93
lakhs and old supplier advances of Rs.139.06 lakhs, have been
identified by the board as irrecoverable and thus have been written off
to 'Business Reconstruction Reserve'.
The closing balances in respect of all current assets, loans and
advances are stated at values realisable in the ordinary course of
business and all known liabilities are adequately provided for in the
opinion of the board.