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Notes to Accounts of Munjal Auto Industries Ltd.

Mar 31, 2015

1 Company Overview

Munjal Auto Industries Limited is a manufacturing company engaged in manufacture of Exhaust systems, Wheels, Rims, Fuel tanks and other components for Auto Industries.

2 Rights, preferences and restrictions attached to shares

The Company has only one class of shares referred to as equity shares having a par value of Rs.2/- (Previous year Rs.2/-). Each holder of Equity Shares is entitled to one vote per share.

3 ADDITIONAL INFORMATIONS

A Addition to Fixed Assets and Capital work in progress during the year included Rs.89,26,780/- (previous year Rs.1,18,92,521/-) being borrowing cost capitalised in accordance with Accounting Standard (AS-16) on borrowing cost asspecified in the Companies (Accounting Standard) Rules, 2006.

B The Company as well as various industrial units in Waghodia have disputed their liability to pay octroi duty and hence the company deposited the amount of Rs. 15.45 lac under protest which is held in a separate bank account in the name of Sarpanch, the Waghodia Gram Panchayat and the Company as the second party under a Court directive. By virtue of a subsequent notification of the State Government of Gujarat, the company, like other industrial units in the notified area of Waghodia, is not required to pay the octroi Duty from 19th July, 1997. The company believes it has no liability for octroi duty even for the earlier period. Association for Industrial Units in Waghodia has filed a suit for recovery of amounts paid under protest, which is still pending for final decision. Therefore, the said amount of Rs.15.45 Lac (Previous Year Rs.15.45 lac) is included in Balance Sheet under the head "Loans & Advances" and no provision is made for liability of octroi in this respect. In the absence of clarity regarding rights of respective parties, interest credited by the bank amounting to Rs. 17.07 Lac (Previous Year: Rs.15.83 Lac) on the aforesaid amount till 31st March 2015 is not accounted for.

C Details of Contingent Liabilities

I Unexpired Bank Guarantee (Net of Margin Money) 3,308,000 6,188,000

II Unexpired Letter of Credit (Net of Margin Money) 1,608,285 60,100,000

III Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (Net of Advances) 50,965,144 73,514,001

IV Estimated amount on Account of pending cases under the Labour Laws 5,496,489 9,553,531

V Income Tax Matters in dispute 4,764,957 8,400,087

VI Sales Tax Matters in dispute 3,188,704 3,188,704

VII Excise Matters 23,696,013 5,901,332

D The Company has taken premises under operating lease. These lease agreements are normally for a period of less than one year. These are generally not "non-cancellable" and are renewable by mutually agreed terms. Rental expenses towards cancellable operating leases charged to profit and loss account amounts to Rs.1,28,82,696/- (previous year Rs.1,28,61,012/-)

E Segment Reporting

As the Company''s business activity falls within a single primary business segment viz. Automobile Parts and single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable.

F Related Party Disclosure

a) Key Management Personnel

Mr. Sudhir Kumar Munjal Chairman & Managing Director

Mrs. Anju Munjal Whole Time Director

Mr. Anuj Munjal Whole Time Director

b) Enterprise which has ability to control the Company

Thakurdevi Investments Pvt. Ltd. Holding Company

G Pursuant to the enactment of the Companies Act, 2013 (The "Act''), the company has applied and estimated useful life as specified in schedule II. Accordingly the carrying value is being depreciated over the revised / remaining useful life. The written down value after retaining the residual value of fixed assets whose life have been expired as on 1st April, 2014 have been recognised net of tax in the opening retained earnings.

H Figures of the previous year have been regrouped and / or recast, wherever considered necessary to oonform to the grouping of the current year.


Mar 31, 2014

1. Additional Informations

A Addition to Fixed Assets and Capital work in progress during the year included Rs.1,18,92,521/- (previous year Rs.19,07,935/-) being borrowing cost capitalised in accordance with Accounting standard (As 16) on borrowing cost as specified in the Companies (Accounting Standard) Rules, 2006.

B Company has paid excise duty of Rs.23.61 lacs (previous year Rs.23.61 lacs) which is claimed by the company to be refundable and shown under loans and advances. The company has filed an appeal and the matter is pending with the Custom, Excise & Service tax Appellate Tribunal.

C The Company as well as various industrial units in Waghodia have disputed their liability to pay octroi duty and hence the Company deposited the amount of Rs. 15.45 lac under protest which is held in a separate bank account in the name of Sarpanch, the Waghodia Gram Panchayat and the Company as the second party under a Court directive. By virtue of a subsequent notification of the State Government of Gujarat, the company, like other industrial units in the notified area of Waghodia, is not required to pay the octroi Duty from 19th July,1997. The company believes it has no liability for octroi duty even for the earlier period. Association for Industrial Units in Waghodia has filed a suit for recovery of amounts paid under protest, which is still pending for final decision. Therefore, the said amount of Rs.15.45 Lac (Previous Year Rs.15.45 lac) is included in Balance Sheet under the head and no provision is made for liability of octroi in this respect. In the absence of clarity regarding rights of respective parties, interest "Loans & Advances" credited by the bank amounting to Rs.15.83 Lac (Previous Year: Rs.14.61 Lac) on the aforesaid amount till 31st March 2014 is not accounted for.

D In respect of an interest-free LEEP loan availed at the time of the setting up a project at Waghodia, Gujarat by the Company, GIIC (A Government of Gujarat undertaking that had disbursed the said LEEP loan on its behalf) had raised a claim of interest amounting to Rs.17 lac payable since 1997. GIIC has claimed that there was a delay in repayment of first 2 installments of the said LEEP loan repaid by the company in earlier years. The Company disputed this. Negotiation in the matter is continuing. Meanwhile, after adding interest @ 24% on the aforesaid disputed amount of interest; GIIC has raised its claim further to Rs. 194 Lac up to 31.12.05 (Previous Year: Rs. 194 Lac). No provision is made in books of accounts for the above interest claim as the Company expects that such a claim of GIIC is not tenable.

E These lease agreements are normally for a period of less than one year. These are generally not “non-cancellable” and are renewable by mutually agreed terms. Rental expenses towards cancellable operating leases charged to profit and loss account amounts to Rs.1,28,61,012/- (previous year Rs.1,28,61,012/-)

F Other Income includes Rs.Nil (Previous year Rs. 1,83,00,000 represents amount received by the company on maturity of Key Man Insurance policy). As the Company’s business activity falls within a single primary business segment viz. Automobile Parts and single geographical

G Segment Reporting

segment, the disclosure requirements of Accounting Standard (AS-17) “Segment Reporting”, issued by the Institute of Chartered Accountants of India are not applicable.

H Figurs of the previous year have been regrouped and / or recast, wherever considered necessary to conform to to the grouping of the current year.`


Mar 31, 2013

Company Overview

Munjal Auto Industries Limited is a manufacturing company engaged in manufacture of Exhaust systems, Wheels, Rims, Fuel tanks and other components for Auto Industries.

1.1 Additional Informations

A Addition to Fixed Assets and Capital work in progress during the year included Rs.19,07,935.00 (previous year Rs.Nil) being borrowing cost capitalised in accordance with Accounting standard (As 16) on borrowing cost as specified in the Companies (Accounting Standard) Rules, 2006.

B Company has paid excise duty of Rs.23.61 lacs (previous year Rs.23.61 lacs) which is claimed by the company to be refundable and shown under loans and advances. The company has filed an appeal and the matter is pending with the Custom, Excise & Service tax Appellate Tribunal.

C The Company as well as various industrial units in Waghodia have disputed their liability to pay octroi duty and hence the company deposited the amount of Rs. 15.45 lac under protest which is held in a separate bank account in the name of Sarpanch, the Waghodia Gram Panchayat and the Company as the second party under a Court directive. By virtue of a subsequent notification of the State Government of Gujarat, the company, like other industrial units in the notified area of Waghodia, is not required to pay the octroi Duty from 19th July,1997. The company believes it has no liability for octroi duty even for the earlier period. Association for Industrial Units in Waghodia has filed a suit for recovery of amounts paid under protest, which is still pending for final decision. Therefore, the said amount of Rs.15.45 Lac (Previous Year Rs.15.45 lac) is included in Balance Sheet under the head "Loans & Advances" and no provision is made for liability of octroi in this respect. In the absence of clarity regarding rights of respective parties, interest credited by the bank amounting to Rs.14.61 Lac (Previous Year: Rs.13.44 Lac) on the aforesaid amount till 31st March 2012 is not accounted for.

D In respect of an interest-free LEEP loan availed by the Company at the time of the setting up a project at Waghodia, Gujarat by the company, GIIC (A Government of Gujarat undertaking that had disbursed the said LEEP loan on its behalf) had raised a claim of interest amounting to Rs.17 lac payable since 1997. GIIC has claimed that there was a delay in repayment of first 2 installments of the said LEEP loan repaid by the company in earlier years. The Company disputed this. Negotiation in the matter is continuing. Meanwhile, after adding interest @ 24% on the aforesaid disputed amount of interest; GIIC has raised its claim further to Rs. 194 Lac up to 31.12.05 (Previous Year: Rs. 194.00 Lac). No provision is made in books of accounts for the above interest claim as the Company expects that such a claim of GIIC is not tenable.

E The Company has taken premises under operating lease. These lease agreements are normally for a period of less than one year. These are generally not "non-cancellable" and are renewable by mutually agreed terms. Rental expenses towards cancellable operating leases charged to profit and loss account amounts to Rs.1,28,61,012/- (previous year Rs.1,15,10,784/-)

F Other Income includes Rs.1,83,00,000 (Prevoius year Rs. Nil) represents amount received by the company on maturity of Key Man Insurance policy.

G Segment Reporting

As the Company''s business activity falls within a single primary business segment viz. Automobile Parts and single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable.

H Related Party Disclosure

a) Key Management Personnel

Mr. Sudhir Munjal Managing Director

Mrs. Anju Munjal Whole Time Director

Mr. Anuj Munjal Whole Time Director

b) Enterprise which has ability to control the Company

Thakurdevi Investments Pvt. Ltd. Holding Company

I Figures of the previous year have been regrouped and / or recast, wherever considered necessary to conform to to the grouping of the current year.


Mar 31, 2012

Amount due within one year are included in other current liabilities. Terms of repayment of remaining amount are as under : Term Loan of Rs. 11.94 Crores repayable in remaining 13 equal quarterly installments.

Term Loan of Rs.9.92 Crores repayable in remaining 19 equal quarterly installments.

Above two loans are secured by way of mortgage/charge created on immovable fixed assets of the Company's undertaking at Bawal, District - Rewari, Haryana.

Term Loan of Rs.14.20 Crores is repayable in remaining 18 equal quarterly installments. This loan is secured by way of mortgage/ charge created plant and machinery acquired out of the sanctioned term loan for Waghodia (Fuel Tank) project, District- Waghodia, Gujarat.

Term Loan of Rs.12.75 Crores is repayable in remaining 10 equal quarterly installment. This loan is secured by way of mortgage/ charge created on immovable fixed assets of the Company's undertaking at Haridwar, District - Haridwar, Uttarakhand.

A Details of Contingent Liabilities For the year For the year

ended Mar, ended Mar,

31, 2012 31, 2011

I Unexpired Letters of Credit

(Net of Margin Money) - 22,336,338

II Unexpired Bank Guarantee

(Net of Margin Money) 1,496,000 1,496,000

III Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (Net of Advances) 6,962,343 80,255,538

IV Estimated amount on Account of pending cases under the Labour Laws 10,554,853 2,589,816

V Income Tax Matters in dispute 8,467,627 4,144,819

VI Sales Tax Matters in dispute 5,789,729 5,789,729

VII Excise Matters 5,901,332 5,901,332

B In respect of an interest-free LEEP loan availed by the company at the time of the setting up a project at Waghodia, Gujarat by the company, GIIC (A Government of Gujarat undertaking that had disbursed the said LEEP loan on its behalf) had raised a claim of interest amounting to Rs.17 lac payable since 1997. GIIC has claimed that there was a delay in repayment of first 2 installments of the said LEEP loan repaid by the company in earlier years. The Company disputed this. Negotiation in the matter is continuing. Meanwhile, after adding interest @ 24% on the aforesaid disputed amount of interest; GIIC has raised its claim further to Rs. 194 Lacs up to 31.12.05 (Previous Year: Rs. 194.00 Lacs). No provision is made in books of accounts for the above interest claim as the Company expects that such a claim of GIIC is not tenable.

I Related Party Disclosure

a) Key Management Personnel

Mr. Satyanand Munjal Chairman

Mr. Sudhir Munjal Managing Director

Mrs. Anju Munjal Whole Time Director

Mr. Anuj Munjal Whole Time Director

b) Enterprise which has ability to control the Company

Thakurdevi Investments Private Limited Holding Company

c) Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence Chopra Industries Private Limited

Chopra Autotech Private Limited

Amar Autotech Private Limited (Formerly known as Amar Sons)

ii Defined Benefit Plans

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of the obligation is determined based on actuarial valuation using Projected unit credit method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to biuld up final obligation. The obligation for leave encashment is recognized in the same manner as gratuity. The related details are as under:

C Segment Reporting

As the Company's business activity falls within a single primary business segment viz. Automobile Parts and single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable.

D The Company as well as various industrial units in Waghodia have disputed their liability to pay octroi duty and hence the company deposited the amount of Rs. 15.45 lacs under protest which is held in a separate bank account in the name of Sarpanch, the Waghodia Gram Panchayat and the Company as the second party under a Court directive. By virtue of a subsequent notification of the State Government of Gujarat, the company, like other industrial units in the notified area of Waghodia, is not required to pay the octroi Duty from 19th July, 1997. The company believes it has no liability for octroi duty even for the earlier period. Association for Industrial Units in Waghodia has filed a suit for recovery of amounts paid under protest, which is still pending for final decision. Therefore, the said amount of Rs.15.45 Lacs (Previous Year Rs.15.45 lacs) is included in Balance Sheet under the head "Loans & Advances" and no provision is made for liability of octroi in this respect. In the absence of clarity regarding rights of respective parties, interest credited by the bank amounting to Rs.13.44 Lacs (Previous Year: Rs.12.37 Lacs) on the aforesaid amount till 31st March 2012 is not accounted for.

E Company has paid excise duty of Rs.23.61 lacs (previous year Rs.23.61 lacs) which is claimed by the company to be refundable and shown under loans and advances. The company has filed an appeal and the matter is pending with the Custom, Excise & Service tax Appellate Tribunal.

F Figures of the previous year have been regrouped and / or recast, wherever considered necessary to conform to to the grouping of the current year.

G The Company has amounts dues to Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 as at 31st March, 2012

H The Company has taken premises under operating lease. These lease agreements are normally for a period of less than one year. These are generally not "non-cancellable" and are renewable by mutually agreed terms. Rental expenses towards cancellable operating leases charged to profit and loss account amounts to Rs.1,15,10,784/- (previous year Rs.1,11,06,265/-)


Mar 31, 2010

1. In respect of an interest-free LEEP loan availed by the company at the time of the setting up a project at Waghodia, Gujarat by the company, GIIC (A Government of Gujarat undertaking that had disbursed the said LEEP loan on its behalf) had raised a claim of interest amounting to Rs.17 lac payable since 1997. GIIC has claimed that there was a delay in repayment of first 2 installments of the said LEEP loan repaid by the company in earlier years. The Company disputed this. Negotiation in the matter is continuing. Meanwhile, after adding interest @ 24% on the aforesaid disputed amount of interest; GIIC has raised its claim further to Rs. 194 Lac up to 31.12.05 (Previous Year: Rs. 194.00 Lac). No provision is made in books of accounts for the above interest claim as the Company expects that such a claim of GIIC is not tenable.

2. As the Companys business activity falls within a single primary business segment viz. Motorcycles Parts and single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", issued by the Institute of Chartered Accountants of India are not applicable.

3. The Company as well as various industrial units in Waghodia have disputed their liability to pay octroi duty and hence the company deposited the amount of Rs. 15.45 lac under protest which is held in a separate bank account in the name of Sarpanch, the Waghodia Gram Panchayat and the Company as the second party under a Court directive. By virtue of a subsequent notification of the State Government of Gujarat, the company, like other industrial units in the notified area of Waghodia, is not required to pay the octroi Duty from 19th July,1997. The company believes it has no liability for octroi duty even for the earlier period. Association for Industrial Units in Waghodia has filed a suit for recovery of amounts paid under protest, which is still pending for final decision. Therefore, the said amount of Rs.15.45 Lac (Previous Year Rs.15.45 lac) is included in Balance Sheet under the head "Loans & Advances" and no provision is made for liability of octroi in this respect. In the absence of clarity regarding rights of respective parties, interest credited by the bank amounting to Rs.11.42 Lac (Previous Year: Rs.10.50 Lac) on the aforesaid amount till 31st March 2010 is not accounted for.

4. Company has paid excise duty of Rs.23.61 lacs (previous year Rs.23.61 lacs) which is claimed by the company to be refundable and shown under loans and advances. The company has filed an appeal and the matter is pending with the Custom, Excise & Service tax Appellate Tribunal.

5. Expenditure on insurance includes Rs. NIL Lacs (previous year Rs.17.91 Lacs) being premiums paid under Key man Insurance scheme to cover risks on life of Key Management personnel (Total premium paid Rs. 112.68 lacs until 31.03.2010). Benefits to the Company under the said scheme depend on various factors including resignation/survival of the said personnel or premature surrender of the policy. Such benefits will be accounted in the year in which they become due.

6. Figures of the previous year have been regrouped and/or recast, wherever considered necessary to conform to the groupings of the current year.

7. The company has taken premises under cancellable operating leases. These lease agreements are normally for a period of less than one year. Minimum future lease payments, payable as on March 31, 2010, are nil. Rental expenses towards cancellable operating leases charged to profit & loss account amounts to Rs.1,04,98,982/- (previous year Rs.1,08,37,176/-)

8. Depreciation for the year ended 31st March, 2009 included a sum of Rs.1,23,17,835/- on account of change in estimate of useful life of vehicles.

9 Related Party Disclosure

a) Key Management Personnel

Mr. Satyanand Munjal Chairman

Mr. Sudhir Munjal Managing Director

Mrs. Anju Munjal Whole-time Director

b) Enterprises which are able to exercise significant influence over the Company

Hero Cycles Limited

c) Enterprises over which key management personnel and their relatives are able to exercise significant influence

Hero Honda Motors Limited

Rockman Cycle Industries Limited

Highway Cycles Industries Limited

Chopra Industries Private Limited

Majestic Auto Limited

Hero Corporate Services Limited

Satyam Auto Components Limited

Amarsons

Shivam Autotech Limited



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10 Disclosure pursuant to Accounting Standard - 15 (Revised) Employee Benefits

ii Defined Benefit Plans

The employees gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of the obligation is determined based on actuarial valuation using Projected unit credit method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to biuld up final obligation. The obligation for leave encashment is recognized in the same manner as gratuity. The related details are as under;





 
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