Mar 31, 2018
1. General Information
Fiem Industries Limited (âThe Companyâ) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The address of its registered office is D-34, DSIDC Packaging Complex, Kirti Nagar, New Delhi-110015. Its shares are listed on National Stock Exchange and Bombay Stock Exchange in India. The Company is in the business of manufacturing and supply of auto components comprising of automotive lighting & signalling equipments, rear-view mirror, prismatic mirror, plastic moulded parts and sheet metal components for motorised vehicles, and LED luminaries comprising of indoor and outdoor lighting, display panels and integrated passengers information system.
INDIAN RUPEE TERM LOANS FROM BANKS INCLUDE
a) From Citibank :- Loan outstanding as at 31.03.18 - NIL ( 31.03.17- Nil, 01.04.16 - RS.9733 Lacs ) had tenor of 5 years witRs.16 equal quarterly repayments beginning from the end of 15 months from drawdown. Interest was payable on monthly basis . The loan carried fixed interest rate of 12% p.a. and was secured against exclusive charge on all movable assets procured out of the term loan. This loan has been fully repaid during the year fy 16-17
b) From State bank of Patiala :- Loan outstanding as on 31.03.18 - NIL ( 31.03.17- H NIL , 01.04.16- RS.400 lacs-). The loan was for 7 years witRs.24 quarterly repayment beginning from the end of 15 months from the drawdown. Interest was monthly payable. The interest rate was 10.30%.p.a. The Loan was Secured against First Pari Passu charge alongwith Axis Bank and HSBC over movable and Immovable fixed assets of Rai Unit ( Present and future) including equitable mortgage of Factory Land and Building at Rai, Sonepat and First charge on movable fixed assets of Hosur unit- III (tamilnadu) and First Charge on movable fixed assets of Mysore unit -IV Karnataka and First charge on entire fixed assets of Unit- VI Nalagarh Unit. This loan has been fully repaid during the year 16-17
c) From Axis Bank :- Loan outstanding as on 31.03.18- NIL, (31.03.17 RS.508 Lacs - 0,1.04.16- RS.1016 lacs) :- The loan was for 7 years and had quarterly repayment beginning after moratorium period of 12 months from the drawdown. Interest is monthly payable. The interest rate was 10.10% p.a.. The Loan was secured against First Pari Passu charge with State Bank of Patiala and HSBC bank on the movable and immovable fixed assets of Rai Unit including equitable mortgage of Factory Land and Building of Rai Unit and secured against First Pari Passu Charge on movable fixed assets of kundli unit and Unit -2 at Hosur with Citibank FCNR-II term loan. The loan has been fully repaid during the FY 17-18
d) HSBC Bank:- Loan -1 Outstanding as on 31.03.18- NIL ( 31.03.17 RS.312.50 lacs , 01.04.16 - RS.562.50 lacs ) The Loan was for 5 year and had quarterly equal repayment beginning after moratorium period of 1 year. Interest was monthly payable. The loan carried fixed interest rate of 10% p.a.. The Loan was Secured against First Pari Passu charge with Axis Bank on the movable and immovable fixed assets of Rai Unit including equitable mortgage of Factory Land and Building of Rai Unit. The loan has been fully repaid during FY 17-18
e) HSBC Bank:- Loan -2 Outstanding as on 31.03.18 is RS.1400 lacs, (31.03.17 RS.1800 lacs , 01.04.16- RS.2000 lacs ) The Loan is for 6 year and has 20 quarterly equal repayment beginning after moratorium period of 15 months . Interest is monthly payable. The loan carries fixed interest rate of 9.50% p.a.. The Loan is Secured against First Pari-Passu charge with HSBC -Mauritius and with CITIBANK FCNR TERM LOAN -3 by way of equitable mortgage on land and building and hypothecation of Plant and machinery at project in Gujarat( Survey no 151-153, village karsanpur, Taluka mandal, Distt Ahmedabad) and secured against first pari passu charge by way of equitable mortgage on Land and Building and hypothecation of Plant and Machinery at Tapukara Rajasthan along with ,HSBC Mauritius, CITIBANK FCNR TERM LOAN -3 and STANDARD CHARTERD BANK ECB-3 LOAN
FOREIGN CURRENCY TERM LOAN FROM BANKS INCLUDE
a) From Citibank :- FCNR Term Loan -1 outstanding as on 31.03.18 -H NIL ( 31.03.17 RS.304.69 lacs, 01.04.16 RS.500 lacs) had tenor of 5 years witRs.16 equal quarterly repayments beginning from the end of 15 months from drawdown. Interest was payable on monthly basis. The loan carried fully hedged interest cost of 10.60% p.a. The Loan was secured against exclusive charge on fixed assets financed out of the term loan and first charge of the movable fixed assets of Unit-V situated at Hosur, tamilnadu. The loan has been fully repaid during the FY 17-18
b) From Citibank :- FCNR Term Loan -2 outstanding as on 31.03.18 - RS.920.93 Lacs, as on 31.03.17- RS.1442.61 lacs ( as on 1.04.16 RS.1875 lacs ) has tenor of 5 years witRs.16 equal quarterly repayments beginning from the end of 12 months from drawdown. Interest is payable on monthly basis. The loan carries fully hedged interest cost of 10.25% p.a. The Loan is secured against exclusive charge on fixed assets financed out of the term loan and is secured against First pari-passu charge on the fixed assets of Kundli Unit-1 and Hosur Unit-2 with working capital Lenders viz. Citibank, Standard Chartered Bank, HDFC bank and Indusind Bank Guarantee limit and term lender Axis Bank. The Loan is also secured against exclusive charge on fixed assets financed out of the term loan and first charge of the movable fixed assets of Unit-V situated at Hosur, tamilnadu.
c) From Citibank :- FCNR Term Loan -3 outstanding as on 31.03.18- RS.2709.74 lacs , as on 31.03.17- RS.3376.47 lacs ( as on 1.04.16 - H NIL) has tenor of 6 years witRs.20 equal quarterly repayments beginning from the end of 15 months from drawdown. Interest is payable on monthly basis. The loan carries fully hedged interest cost of 9% p.a. The Loan is secured against First pari-passu charge on the fixed assets of the company including land and building and plant and machinery at Rajasthan unit with other lender viz. HSBC India, HSBC Mauritius and SCB 5.50 Million USD ECB LOAN and is secured against first pari-passu charge on all the fixed assets including land and building and plant and machinery of Gujarat unit shared with other lenders viz. HSBC India, HSBC Mauritius .
d) From Standard Chartered Bank ECB -2 :- Loan outstanding as on 31.03.18- NIL, 31.03.17 - NIL ( 01.04.16 - RS.276.19 lacs ). The loan was for 5 years witRs.16 equal quarterly repayment beginning from the end of 15 months from the drawdown. Interest was quarterly payable. The loan carried fully hedged interest cost of 8.50% p.a. The Loan was secured against Equitable mortgage on land and building and Pant and machinery at Tapukara, Rajasthan Unit with HSBC India and HSBC Mauritius. This loan has been fully repaid during the year
e) From Standard Chartered Bank ECB -3 for 5.50 Million USD :- Loan outstanding as on 31.03.18- RS.3235.94 lacs, as on 31.03.17 - RS.3566.12 lacs ( as on 1.04.16 HNIL ). The loan is for 6 years witRs.16 equal quarterly repayment beginning from the end of 15 months from the drawdown. Interest is quarterly payable. The loan carries fully hedged interest cost of 8.90% p.a. The Loan is secured on first pari passu charge basis with HSBC INDIA, HSBC Mauritius and CITIBNK FCNR TERM LOAN-3 on all assets of Tapukara plant ( Present and future)
f) From HSBC Mauritius ECB :- Loan outstanding as on 31.03.18- RS.3496.13 lacs, as on 31.03.17- RS.4457.65 lacs , as on 1.04.16 RS.4927.50 lacs . The loan is for 6 years witRs.20 equal quarterly repayment beginning from the end of 15 months from the drawdown. Interest is quarterly payable. The loan carries fully hedged interest cost of 8.99% p.a. The Loan is secured against Equitable Mortgage with CITIBANK FCNR TERM LOAN-3 (1st Pari Passu with HSBC, India) on Land and Building and Hypothecation of Plant and Machinery ( 1st pari- Passu with HSBC, India) located at Ahmedabad, Gujarat and secured against equitable mortgage on Land and Building with ( 1st pari- Passu with HSBC, India) and hypothecation of Plant and Machinery ( 1st pari- Passu with HSBC, India) along with CITIBANK FCNR TERM LOAN -3 AND STANDARD CHARTERED BANK ECB-3 at Tapukara Rajasthan
VEHICLE LOANS FROM BANKS AND OTHERS
Vehicle loan from banks and others outstanding as on 31.03.18- 396.97 lacs, as on 31.03.17 RS.340.03 lacs (as on 01.04.16- RS.518.56 lacs) secured against hypothecation of the respective vehicles acquired out of proceeds thereof. The Loans carries interest rate between 8.50% p.a.to 11.00% p.a.
Indian Rupee Loan includes
a) From Citibank NA :- Loan outstanding as at 31.03.18- RS.1885.68 lacs, as on 31.03.17 RS.2220.20 lacs (1.04.16 - RS.104.43 lacs) Interest is payable with monthly rest on the last date of each month in each year or at such other rest as determined by the bank. The rate of interest is based on relevant circumstances, including market conditions which currently is 9.5% p.a.. The loan is secured against First Pari Passu Charge on all present and future receivables, stocks/Inventories with Standard Chartered Bank Cash Credit Loan, HDFC Bank Cash Credit Loan , Indusind Bank Bank Guarantee Limit and secured against First Pari Passu charge on all the fixed assets of the company (excluding assets specifically purchased out of the term loans from Citibank and other term loan lenders ) including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Standard Chartered Bank, HDFC Bank, Indusind Bank and Citibank FCNR-2 Loan.
b) From Standard Chartered Bank :- Loan outstanding as at 31.03.18- RS.1275.75 lacs, as on 31.03.17 is RS.2717.80 lacs (01.04.16 RS.728.01 lacs) Interest is monthly payable. Interest is payable at base rate plus margin basis which may be agreed with bank from time to time which currently is 9.50% p.a.. The loan is secured against First Pari Passu Charge on all present and future receivables, stocks/Inventories with Citibank Cash Credit Loan, HDFC Bank Cash Credit Loan , Indusind bank Bank Guarantee Limit and secured against First Pari Passu Charge on present and future moveable fixed assets of the company with Citibank , HDFC Bank, Indusind Bank (excluding assets specifically purchased out of term loan from term loan lenders) including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Citibank, HDFC Bank, Indusind bank and Citibank FCNR-2 Loan.
c) From HDFC BANK :- Loan outstanding as at 31.03.18- RS.545.39 lacs , as on 31.03.17 RS.1477.16 lacs ( as on 01.04.16 - RS.997.38 lacs ) Interest is monthly payable. Interest is payable at base rate plus margin basis which may be agreed with bank from time to time which currently is 9.00% p.a.. The loan is secured against First Pari Passu charge on all present and future receivables, stocks/Inventories with Citibank Cash Credit Loan, Standard Chartered Bank Cash Credit Loan, Indusind bank Bank Guarantee Limit and secured against First Pari Passu Charge on all fixed assets of the company (excluding assets specifically purchased out of term loan from term loan lenders ) with Citibank, Standard Chartered Bank, Indusind Bank including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Citibank, Standard Chartered Bank, Indusind Bank and Citibank FCNR-2 Loan.
d) Indusind Bank Bank Guarantee Limit:- The loan is secured against First Pari Passu Charge on all present and future receivables, stocks/Inventories with Citibank Cash Credit Loan, Standard Chartered Bank Cash Credit Loan, HDFC bank Cash Credit Loan Limit and secured against First Pari Passu Charge on present and future moveable fixed assets of the company with Citibank, Standard Chartered Bank, HDFC bank (excluding assets specifically purchased out of term loan from term loan lenders ) including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Citibank, Standard Chartered Bank, HDFC bank and Citibank FCNR-2 Loan. Bank Guarantee charges is 0.60% p.a. plus applicable tax.
Note :- A fire incident happened on 25.01.2018 around noon in one block of Unit-5, situated at Kelamanglam Road, Achettipalli Post, Hosur 635110,Tamilnadu. The incident resulted in substantial damage to plant and machinery and Inventory etc. in the said block. These assets were adequately insured with reinstatement clause and a claim has been made with the insurance company. Special/urgent actions to restart supplies to the customer post fire incident has temporarily resulted into additional costs during the year have been included in âExceptional Itemsâ above. The company has estimated net gain of RS.53724 lac in form of reversal of depreciation charged in earlier years recoverable from the insurance company.
2. SEGMENT REPORTING
(a) Identification of Segments:
Primary-Business Segments
The Company has identified two reportable business segments viz. Automotive and LED Luminaries Segment on the basis of the nature of products, the risk and return profile of individual business and the internal business reporting systems. The products included in each of the reported business segments are as follows:-
(i) Automotive comprising of automotive lighting & signalling equipment, rear view mirror, prismatic mirror, plastic moulded parts, and sheet metal components for motorised vehicles and others parts for automotive.
(ii) LED Luminaries Segment comprising of led luminaries viz. indoor and outdoor lighting, display panel, LED integrated passenger information system etc.
b) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to a segment on reasonable basis have been disclosed as âunallocatedâ
(c) Segment assets and segment liabilities represent assets and liabilities in respective segments. Income tax related assets/liabilities, borrowings, investment in mutual funds, deferred tax liabilities (Net) and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as âUnallocatedâ.
(ii) Secondary-Geographical Segments:-
The analysis of geographical segments is based on geographical location of the customers
The following is the distribution of Companyâs revenue by geographical market, regardless of where the goods were produced
1. Sales Revenue by geographical market outside India has been re-stated by excluding indirect exports.
2. The segment trade receivables have been re-stated by excluding trade receivables on account of indirect exports.
3. The Company has common assets for producing goods for domestic market and overseas market. Hence, separate figures for fixed assets have not be furnished. 46 RELATED PARTY DISCLOSURES UNDER IND AS 24
Name of Related Parties, Transactions and Balances at Reporting date are as follows
Name of Related Party
(i) Key Management Personnel
Jagjeevan Kumar Jain Chairman and Managing Director
Seema Jain Whole Time Director
Aanchal Jain Whole Time Director
Rahul Jain Whole Time Director
JSS Rao Whole Time Director
Kashi Ram Yadav Whole Time Director
Ashok Kumar Sharma Independent Director (we.f. September 10, 2016)
Iqbal Singh Independent Director
Jawahar Thakur Independent Director (we.f. November 12, 2016)
Mohan Bir Sahni Independent Director
Subodh Kumar Jain Independent Director
Vinod Kumar Malhotra Independent Director
Abhishek Jain Independent Director (upto September 8, 2016)
Charoen Sachamuneewongse Independent Director (upto October 20, 2016)
OP Gupta Chief Financial Officer
Arvind Kumar Chauhan Company Secretary
(ii) Related Parties Controlled by Key Management personnel
Fiem Auto Private Limited Entity Controlled by Key Management Personnel
Jagjeevan Kumar Jain (HUF) Entity Controlled by Key Management Personnel
Fiem Auto & Electrical Industries Entity Controlled by Key Management Personnel
Fiem Foundation Entity Controlled by Key Management Personnel
(iii) Subsidiary Company
Fiem Industries Japan Co., Ltd 100% Subsidiary Company incorporated in Japan
Fiem (Thai) Design & Technology Co., Ltd 100% Subsidiary Company incorporated in Thailand
(iv) Joint Venture
Centro Ricerche Fiem Horustech SRL JV incorporated in Italy, 50% ownership interest held by the company
Fiem Kyowa (HK) Mould Company Ltd JV incorporated in Hong Kong, 50% ownership interest held by the company
Defined Benefit Plans (a) Gratuity
The Company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. It is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. The scheme is funded with Exide Life Insurance Company Limited in the form of qualifying insurance policy.
(b) Leave Encashment
The Present value obligation of Leave Encashment is determined based on actuarial valuation using projected unit credit method.
Disclosure requirement as per Indian Accounting Standard on Employee Benefits-Ind AS (19)-As per actuarial valuation as on 31.03.2018 are as follows:
(a) The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated terms of the obligations.
(b) Salary escalation rate: The estimates of future salary increases considered taking into the account the inflation, seniority, promotion and other relevant factors.
(c) Expected return on assets is expected return on plan assets over the accounting period, based on an assumed rete of return.
(d) Attrition rate is employee turnover rate based on the Companyâs past and expected employee turnover.
(e) Disclosure related to indication of effect of the defined benefit plan on the entityâs future cash flows:
(f) Weighted Average duration of defined benefit obligation for gratuity and earned leave: 19.59 years
(g) Sensitivity analysis:
Sensitivity analysis indicates the influence of a reasonable change in principal assumptions, while keeping other things constant, on the outcome of the present value of Defined Benefit Obligation. In reality, the plan is subject to multiple external experience items which may move the Defined Benefit Obligation in similar or opposite directions, while the Planâs sensitivity to such changes can vary over time.
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. In addition, the Company internally reviews valuation, including independent price validation for certain instruments.
Fair value of financial assets and liabilities is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.
The following methods and assumptions were used to estimate fair value:
(a) Fair value of short term financial assets and liabilities significantly approximate their carrying amounts largely due to the short term maturities of these instruments.
(b) Fair value of quoted mutual funds is based on the net assets value at the reporting date.
3. FINANCIAL INSTRUMENTS AND RISK REVIEW
Financial Risk Management Framework
The Companyâs financial liabilities comprise mainly of borrowings, trade payables and other payables. The Companyâs financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.
The Company is exposed to Market risk, Credit risk and Liquidity risk. The Board of Directors (âBoardâ) oversee the management of these financial risks through its Risk Management Committee. The Risk Management Policy of the Company formulated by the Risk Management Committee and approved by the Board, states the Companyâs approach to address uncertainties in its endeavor to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of the Companyâs management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate financial risks in order to minimize potential adverse effects on the Companyâs financial performance.
i) Capital Management
The Companyâs capital management objectives are:
The Board policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital employed.
The Company manages capital risk by maintaining sound/optimal capital structure through monitoring of financial ratios, such as debt-to-equity ratio and net borrowings-to-equity ratio on a monthly basis and implements capital structure improvement plan when necessary.
The Company uses debt ratio as a capital management index and calculates the ratio as Net debt divided by total equity. Net debt and total equity are based on the amounts stated in the financial statements.
*Net debt includes Non Current borrowing, Current borrowing, Current maturities of non current borrowing and interest accrued on borrowings net-off derivative liability on non-current borrowings.
ii) Credit Risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, other balances with banks, loans and other receivables.
The Companyâs exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was RS.14519.95 lakhs, RS.12938.15 lakhs and RS.12728.75 lakhs as of 31st March, 2018, 31st March, 2017 and 1st April, 2016 respectively, being the total of the carrying amount of balances with trade receivables Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of financial statement whether a financial asset or a group of financial assets is impaired. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
Companyâs exposure to customers is diversified and some customers contribute more than 10% of outstanding accounts receivable which forms 57% of total receivables as of 31st March, 2018 (49% as at 31st March, 2017 and 69% as at of 1st April, 2016), however there was no default on account of those customers in the past.
The Company performs credit assessment for customers on an annual basis and recognizes credit risk, on the basis lifetime expected losses and where receivables are due for more than six months.
iii) Liquidity Risk
a) Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
b) Maturities of financial liabilities
The following tables detail the Companyâs remaining contractual maturity for its financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.
c) Maturities of financial assets
The following table details the Companyâs expected maturity for financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on such assets.
iv) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Companyâs exposure to market risk is primarily on account of foreign currency exchange rate risk.
a) Foreign Currency exchange rate risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Euro, Great Britain Pound and Japanese Yen against the respective functional currencies of the Company. The Company The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies. The information on derivative instruments is as follows.
Foreign Currency Sensitivity
The following table demonstrates the sensitivity to a reasonable possible change in USD, EURO and JPY exchange rates, with all other variables held constant, the impact on the Companyâs profit before tax due to changes in the fair value of monetary assets and liabilities. The Companyâs exposure to foreign currency changes for all other currencies is not material. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 10% represents management assessment of reasonably possible change in foreign exchange rate.
In managementâs opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.
b) 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 change in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long term debt obligations with floating interest rates.
Interest rate sensitivity
The sensitivity analysis below have 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:
4. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES
As required by section 135 of the Companies Act, 2013, CSR committee has been formed by the company. The company has formed Fiem Foundation Trust as on dated 2nd March, 2015 with an object to undertake CSR projects, programs and activities in India as listed under Schedule VII of the Act. The company has no outstanding commitment as on 31st March, 2018 towards corporate social responsibility projects. The break-up of expenditure/contribution towards under corporate social responsibility as under-
5. JOINT VENTURE COMPANY
1. Centro Ricerche Fiem Horustech SRL
Description of Interest Jointly Controlled Entity
Country of Incorporation Italy
Proportion of Ownership Interest as at MarcRs.31, 2018 50%
2. Fiem Kyowa (HK) Mould Company Ltd
Description of Interest Jointly Controlled Entity
Country of Incorporation Hong Kong
Proportion of Ownership Interest as at MarcRs.31, 2018 50%
In respect of Jointly control entity, the Companyâs share of Assets, Liabilities, Income & Expenses are as follows:
6. UTILIZATION OF QIP PROCEEDS
During the financial year 2016-17, on dated 20th September, 2016, the Company had issued and allotted 11,97,604 equity shares of RS.10 each at a premium of RS.992 per equity share by way of Qualified Institution Placement (QIP).
7. PROPOSED DIVIDEND
The Company has recommended the final dividend of RS.9 per equity share (90% of nominal value of RS.10 per share) for the financial year ended 31st March, 2018 for amounting to RS.1,184,38 lacs on equity share capital of the company. The proposed dividend is subject to the approval of shareholders in the ensuing Annual General Meeting (AGM)
8. FIRE AT HOSUR-UNIT-V PLANT
There was a major fire on 25th January, 2018 at unit-5 in Hosur plant (Tamilnadu). The loss incurred by the Company is adequately covered under insurance claim. The written down value of property, plant and equipment and costs of inventories destroyed/damaged have been appropriately adjusted in the books of accounts. The break-up of assets damaged (i.e WDV ) and other expenses dut to fire as follows.
The Company has filed a claim with with its insurers and the claim is expected to settle at a total amount of RS.260718 Lakhs (based on reinstatement costs of the assets). The same has been disclosed as an âinsurance claim receivablesâ in the balance sheet.
9. Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/disclosure.
Mar 31, 2017
1. Terms/rights attached to equity shares
The company has only one class of shares referred to as equity shares having a par value of H10 each. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amount exist currently. The distribution will be in proportion to the number of the equity shares held by the shareholders.
INDIAN RUPEE TERM LOANS FROM BANKS INCLUDE
2. From Citibank :- Loan outstanding as at 31.03.17 HNIL (Previous year H97,32,715) had tenor of 5 years with 16 equal quarterly repayments beginning from the end of 15 months from drawdown. Interest was payable on monthly basis . The loan carried fixed interest rate of 12% p.a. and was secured against exclusive charge on all movable assets procured out of the term loan. This loan has been fully repaid during the year
3. From State bank of Patiala :- Loan outstanding as on 31.03.17 NIL (Previous Year Rs.4,00,00,000/-). The loan was for 7 years with 24 quarterly repayment beginning from the end of 15 months from the drawdown. Interest was monthly payable. The interest rate was 10.30% p.a. The Loan was Secured against First Pari Passu charge along with Axis Bank and HSBC over movable and Immovable fixed assets of Rai Unit ( Present and future) including equitable mortgage of Factory Land and Building at Rai, Sonepat and First charge on movable fixed assets of Hosur unit- III (tamilnadu) and First Charge on movable fixed assets of Mysore unit -IV Karnataka and First charge on entire fixed assets of Unit- VI Nalagarh Unit. This loan has been fully repaid during the year
4. From Axis Bank :- Loan outstanding as on 31.03.17 Rs.5,08,00,000/- (Previous year Rs.10,16,00,000) :- The loan is for 7 years and has quarterly repayment beginning after moratorium period of 12 months from the drawdown. Interest is monthly payable. The current interest rate is 10.10% p.a. The Loan is secured against First Pari Passu charge with State Bank of Patiala and HSBC bank on the movable and immovable fixed assets of Rai Unit including equitable mortgage of Factory Land and Building of Rai Unit and secured against First Pari Passu Charge on movable fixed assets of kundli unit and Unit -2 at Hosur with Citibank FCNR-II term loan.
5. HSBC Bank:- Loan -1 Outstanding as on 31.03.17 Rs.3,12,50,000/- ( Previous Year Rs.5,62,50,000 ) The Loan is for 5 year and has quarterly equal repayment beginning after moratorium period of 1 year. Interest is monthly payable. The loan carries fixed interest rate of 10% p.a. The Loan is Secured against First Pari Passu charge with Axis Bank on the movable and immovable fixed assets of Rai Unit including equitable mortgage of Factory Land and Building of Rai Unit.
6. HSBC Bank:- Loan -2 Outstanding as on 31.03.17 Rs.18,00,00,000/- ( Previous Year Rs.20,00,00,000 ) The Loan is for 6 year and has 20 quarterly equal repayment beginning after moratorium period of 15 months . Interest is monthly payable. The loan carries fixed interest rate of 9.50% p.a. The Loan is Secured against First Pari-Passu charge with HSBC -Mauritius and with CITIBANK FCNR TERM LOAN -3 by way of equitable mortgage on land and building and hypothecation of Plant and machinery at project in Gujarat( Survey no 151-153, village karsanpur, Taluka mandal, Distt Ahmedabad) and secured against first pari passu charge by way of equitable mortgage on Land and Building and hypothecation of Plant and Machinery at Tapukara Rajasthan along with ,HSBC Mauritius, CITIBANK FCNR TERM LOAN -3 and STANDARD CHARTERD BANK ECB-3 LOAN.
FOREIGN CURRENCY TERM LOAN FROM BANKS INCLUDE
7. From Citibank :- FCNR Term Loan -1 outstanding as on 31.03.17 âRs.3,04,69,267 ( Previous Year Rs.5,00,00,000) has tenor of 5 years with 16 equal quarterly repayments beginning from the end of 15 months from drawdown. Interest is payable on monthly basis. The loan carries fully hedged interest cost of 10.60% p.a. The Loan is secured against exclusive charge on fixed assets financed out of the term loan and first charge of the movable fixed assets of Unit-V situated at Hosur, tamilnadu.
8. From Citibank :- FCNR Term Loan -2 outstanding as on 31.03.17- Rs.14,42,60,639 ( Previous Year Rs.18,75,00,000 ) has tenor of 5 years with 16 equal quarterly repayments beginning from the end of 12 months from drawdown. Interest is payable on monthly basis. The loan carries fully hedged interest cost of 10.25% p.a. The Loan is secured against exclusive charge on fixed assets financed out of the term loan and is secured against First pari-passu charge on the fixed assets of Kundli Unit-1 and Hosur Unit-2 with working capital Lenders viz. Citibank, Standard Chartered Bank, HDFC bank and Indusind Bank Guarantee limit and term lender Axis Bank. The Loan is also secured against exclusive charge on fixed assets financed out of the term loan and first charge of the movable fixed assets of Unit-V situated at Hosur, tamilnadu.
9. From Citibank :- FCNR Term Loan -3 outstanding as on 31.03.17- Rs.33,76,46,713 ( Previous Year- Rs. NIL) has tenor of 6 years with 20 equal quarterly repayments beginning from the end of 15 months from drawdown. Interest is payable on monthly basis. The loan carries fully hedged interest cost of 9% p.a. The Loan is secured against First pari-passu charge on the fixed assets of the company including land and building and plant and machinery at Rajasthan unit with other lender viz. HSBC India, HSBC Mauritius and SCB 5.50 Million USD ECB LOAN and is secured against first pari-passu charge on all the fixed assets including land and building and plant and machinery of Gujarat unit shared with other lenders viz. HSBC India, HSBC Mauritius .
10. From Standard Chartered Bank ECB -2 :- Loan outstanding as on 31.03.17 - NIL ( Previous year Rs.2,76,18,750 ). The loan was for 5 years with 16 equal quarterly repayment beginning from the end of 15 months from the drawdown. Interest was quarterly payable. The loan carried fully hedged interest cost of 8.50% p.a. The Loan was secured against Equitable mortgage on land and building and Pant and machinery at Tapukara, Rajasthan Unit with HSBC India and HSBC Mauritius. This loan has been fully repaid during the year
11. From Standard Chartered Bank ECB -3 for 5.50 Million USD :- Loan outstanding as on 31.03.17 â Rs. 35,66,12,300 ( Previous year Rs. NIL ). The loan is for 6 years with 16 equal quarterly repayment beginning from the end of 15 months from the drawdown. Interest is quarterly payable. The loan carries fully hedged interest cost of 8.90% p.a. The Loan is secured on first pari passu charge basis with HSBC INDIA, HSBC Mauritius and CITIBNK FCNR TERM LOAN-3 on all assets of Tapukara plant ( Present and future)
12. From HSBC Mauritius ECB :- Loan outstanding as on 31.03.17- Rs.44,57,65,375 ( Previous year Rs.49,27,50,000 ). The loan is for 6 years with 20 equal quarterly repayment beginning from the end of 15 months from the drawdown. Interest is quarterly payable. The loan carries fully hedged interest cost of 8.99% p.a. The Loan is secured against Equitable Mortgage with CITIBANK FCNR TERM LOAN-3 (1st Pari Passu with HSBC, India) on Land and Building and Hypothecation of Plant and Machinery ( 1st pari- Passu with HSBC, India) located at Ahmedabad, Gujarat and secured against equitable mortgage on Land and Building with ( 1st pari- Passu with HSBC, India) and hypothecation of Plant and Machinery ( 1st pari- Passu with HSBC, India) along with CITIBANK FCNR TERM LOAN -3 AND STANDARD CHARTERED BANK ECB-3 at Tapukara Rajasthan.
Indian Rupee Loan includes
13. From Citibank NA :- Loan outstanding as at 31st March 2017 Rs.22,20,20,679 ( Previous Year Rs.1,04,42,870 ) Interest is payable with monthly rest on the last date of each month in each year or at such other rest as determined by the bank. The rate of interest is based on relevant circumstances, including market conditions which currently is 9.5% p.a. The loan is secured against First Pari Passu Charge on all present and future receivables, stocks/Inventories with Standard Chartered Bank Cash Credit Loan, HDFC Bank Cash Credit Loan , Indusind Bank Bank Guarantee Limit and secured against First Pari Passu charge on all the fixed assets of the company (excluding assets specifically purchased out of the term loans from Citibank and other term loan lenders ) including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Standard Chartered Bank, HDFC Bank, Indusind Bank and Citibank FCNR-2 Loan.
14. From Standard Chartered Bank :- Loan outstanding as at 31st March 2017 is Rs.27,17,79,954 ( Previous year Rs.7,28,01,367/- ) Interest is monthly payable. Interest is payable at base rate plus margin basis which may be agreed with bank from time to time which currently is 9.50% p.a. The loan is secured against First Pari Passu Charge on all present and future receivables, stocks/Inventories with Citibank Cash Credit Loan, HDFC Bank Cash Credit Loan , Indusind bank Bank Guarantee Limit and secured against First Pari Passu Charge on present and future moveable fixed assets of the company with Citibank , HDFC Bank, Indusind Bank (excluding assets specifically purchased out of term loan from term loan lenders ) including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Citibank , HDFC Bank, Indusind bank and Citibank FCNR-2 Loan.
15. From HDFC BANK :- Loan outstanding as at 31st March 2017 is Rs.14,77,15,789 ( Previous year Rs.9,97,37,950/- ) Interest is monthly payable. Interest is payable at base rate plus margin basis which may be agreed with bank from time to time which currently is 9.00% p.a. The loan is secured against First Pari Passu charge on all present and future receivables, stocks/Inventories with
| SHORT TERM BORROWINGS ~
Citibank Cash Credit Loan, Standard Chartered Bank Cash Credit Loan, Indusind bank Bank Guarantee Limit and secured against First Pari Passu Charge on all fixed assets of the company (excluding assets specifically purchased out of term loan from term loan lenders ) with Citibank, Standard Chartered Bank, Indusind Bank including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Citibank, Standard Chartered Bank, Indusind Bank and Citibank FCNR-2 Loan.
16. Indusind Bank Bank Guarantee Limit:- The loan is secured against First Pari Passu Charge on all present and future receivables, stocks/Inventories with Citibank Cash Credit Loan, Standard Chartered Bank Cash Credit Loan, HDFC bank Cash Credit Loan Limit and secured against First Pari Passu Charge on present and future moveable fixed assets of the company with Citibank, Standard Chartered Bank, HDFC bank (excluding assets specifically purchased out of term loan from term loan lenders ) including equitable mortgage charge on first pari passu basis on Land and Building situated at 32nd Milestone, GT Road, Kundli,Haryana and 219/2B,Thally Road Hosur,Tamilnadu with Citibank, Standard Chartered Bank, HDFC bank and Citibank FCNR-2 Loan. Bank Guarantee charges is 0.60% p.a. plus applicable service tax.
Considering the company has been extended credit period up to 45 days by its vendors and payments being released on a timely basis, there is no liability towards interest on delayed payments under "The Micro, Small and Medium Enterprises Development Act 2006" during the year. There is also no amount of outstanding interest in this regard, brought forward from previous years. The above information is on basis of intimations received, from the vendors who have communicated their status with regards to vendors registration under the said Act on requests made by the company,
Segments Reporting Policies
17. Identification of Segments:
Primary-Business Segments
The Company has identified two reportable business segments viz. Automotive and LED Luminaries Segment on the basis of the nature of products, the risk and return profile of individual business and the internal business reporting systems. The products included in each of the reported business segments are as follows:-
18. Automotive comprising of automotive lighting & signaling equipment, rear view mirror, prismatic mirror, plastic moulded parts, and sheet metal components for motorized vehicles and others parts for automotive.
19. LED Luminaries Segment comprising of led luminaries viz. indoor and outdoor lighting, display panel, LED integrated passenger information system etc.
20. Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to a segment on reasonable basis have been disclosed as "unallocated"
21. Segment assets and segment liabilities represent assets and liabilities in respective segments. Income tax related assets/ liabilities, borrowings, investment in mutual funds, deferred tax liabilities (Net) and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocated".
22. Secondary-Geographical Segments:-
The analysis of geographical segments is based on geographical location of the customers
The following is the distribution of Company''s revenue by geographical market, regardless of where the goods were produced
Defined Benefit Plans
23. Gratuity
The Company operates a defined benefit plan of Gratuity for its employees under the Gratuity plan, every employee who has completed five years of services gets a gratuity on departure @ 15 days of last drawn basic salary including dearness allowance if any, of each completed year of service subject to maximum amount of Rs.10,00,000/-. Gratuity is payable in accordance with payment of Gratuity Act, 1972. The scheme is funded with Exide Life Insurance Company Limited in the form of qualifying insurance policy.
24. Leave Encashment
The Present value obligation of Leave Encashment is determined based on actuarial valuation using projected unit credit method.
Disclosure requirement as per Accounting Standard on Employee Benefit-AS (15)-As per actuarial valuation as on 31.03.17 are as follows:
Mar 31, 2016
1. Lease Transactions
The company has taken commercial premises under non-cancellable operating lease. Minimum lease payments in respect of assets taken on non-cancellable operating lease are as follows:-
2. Segment Reporting
The segment reporting of the Company has been prepared in accordance with Accounting Standard-17 "Segment Reporting" (specified under section 133 of Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules 2014).
Segments Reporting Policies
(a) Identification of Segments:
Primary-Business Segments
The Company has identified two reportable business segments viz. Automotive and LED Luminaries Segment on the basis of the nature of products, the risk and return profile of individual business and the internal business reporting systems with effect from the current financial year. During the previous year, the company had only one business segment. Hence comparative figures for the previous period are not reported. The products included in each of the reported business segments are as follows:-
(i) Automotive comprising of automotive lighting & signaling equipment, rear view mirror, prismatic mirror, plastic molded parts, and sheet metal components for motorised vehicles and others parts for automotive.
(ii) LED Luminaries Segment comprising of led luminaries viz. indoor and outdoor lighting, display panel, LED integrated passenger information system etc.
(b) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to a segment on reasonable basis have been disclosed as "unallocated".
(c) Segment assets and segment liabilities represent assets and liabilities in respective segments. income tax related assets/liabilities, borrowings, and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocated".
3. Related Party Disclosures
Name of Related Parties, Transactions and Balances at Reporting date are as follows
Name of Related Party
(i) Key Management Personnel
Jagjeevan Kumar Jain Chairman and Managing Director
Seema Jain Whole Time Director
Aanchal Jain Whole Time Director
Rahul Jain Whole Time Director
JSS Rao Whole Time Director
Kashi Ram Yadav Whole Time Director
OP Gupta Chief Financial Officer
Arvind Kumar Chauhan Company Secretary
(ii) Related Parties Controlled by Key Management personnel
Fiem Auto Private Limited Entity Controlled by Key Management Personnel
Jagjeevan Kumar Jain (HUF) Entity Controlled by Key Management Personnel
Fiem Auto & Electrical Industries Entity Controlled by Key Management Personnel
Fiem Foundation Entity Controlled by Key Management Personnel
(iii) Subsidiary Company
Fiem Industries Japan Co., Ltd 100% Subsidiary Company incorporated in Japan
(iv) Joint Venture
Centro Ricerche Fiem Horustech SRL JV incorporated in Italy, 50% ownership interest held by the company
Defined Benefit Plans
(a) Gratuity
The Company operates a defined benefit plan of Gratuity for its employees under the Gratuity plan, every employee who has completed five years of services gets a gratuity on departure @ 15 days of last drawn basic salary including dearness allowance if any, of each completed year of service subject to maximum amount of Rs. 10,00,000/- . Gratuity is payable in accordance with payment of Gratuity Act, 1972. The scheme is funded with Exide Life Insurance Company Limited in the form of qualifying insurance policy.
(b) Leave Encashment
The Present value obligation of Leave Encashment is determined based on actuarial valuation using projected unit credit method.
Disclosure requirement as per Accounting Standard on Employee Benefit-AS (15)-As per actuarial valuation as on 31.03.16 are as follows:
4. Corporate Social Responsibility Activities
As required by section 135 of the Companies Act, 2013, CSR committee has been formed by the company. The company has formed Fiem Foundation Trust as on dated 2nd March, 2015 with an object to undertake CSR projects, programs and activities in India as listed under Schedule VII of the Act. The company has no outstanding commitment as on 31st March, 2016 towards corporate social responsibility projects. The break-up of expenditure/contribution towards under corporate social responsibility as under:-
5. Joint Venture Company
The Company has entered into a joint venture agreement with ''Horustech Lighting SRL Italy'' on 2nd December 2013 for forming a joint venture company to set-up a design centre at Italy. Accordingly, a company ''Centro Ricerche Fiem Horustech SRL.'' a jointly controlled Entity has been formed on 12th December 2013. The company has invested a sum of Rs. 33,15,600/- (Euro 40,000) towards capital contribution in said Joint Venture Company as on the date of balance sheet.
The company''s interest in joint venture is reported as Non Current Investment (Refer Note 12) and is stated at cost.
(a) Pursuant to Accounting Standard-27, "Financial Reporting of Interests in Joint Ventures" notified under the Companies (Accounting Standards) Rules, 2006 (as amended) disclosure in respect of the said Joint Venture are given below:
Name of joint Venture Centro Ricerche Fiem Horustech SRL
Description of Interest Jointly Controlled Entity
Country of Incorporation Italy
Proportion of Ownership Interest as at March 31, 2016 50%
6. During the financial year 2015-16, the Company declared and paid an interim dividend of Rs. 5/- per equity share (previous year Nil) of the face value of Rs. 10/- each in the month of March, 2016. In addition, the board of directors recommends payment of Rs. 3/- per equity share of the face value of Rs. 10/- each as final dividend for the financial year 2015-16, for the approval of the shareholders at the ensuing AGM. If approved, the total dividend (interim and final dividend) for the financial year 2015-16 will be Rs. 8/- (previous year Rs. 7/-) per equity share of the face value of Rs. 10/- each.
7. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.
Mar 31, 2015
1. (Amount in Rs)
Particulars 31.03.2015 31.03.2014
2. Contingent Liabilities
(A) Claims against the Company/disputed
liabilities not acknowledged as
debts (See NoteÂ1)
(i) Income Tax
(a) Case decided in the Company's
favour by CIT (Appeal) in respect of
A.Y. 2011Â12 for which the department
has filed further appeal (See
NoteÂ2) 61,745,248 62,866,893
(ii) Custom Duty
(a) Import Duty Demand towards imported
capital goods which were sold to the
customer in relation to nil import duty
being paid at the time of import of said
capital goods as a 100% EOU unit for
which the company has filed
an appeal with Commissioner of Central
Excise, Chennai (Net of deposit) 4,340,527 4,340,527
(b) Liability of Import Duty towards
Export obligation undertaken by
the Company under EPCG Licenses 5,613,810 644,567
(iii) Excise Duty & Service Tax
(a) Excise Duty Demand on Modvat
Credit taken on raw material for
which the Company has filed an
appeal with CESTAT, New Delhi
(Net of deposit) 2,457,076 2,457,076
(b) Excise Duty Demand on Cenvat
Credit taken on input and Capital
goods for which the Company has
filed an appeal with CESTAT,
Chennai (Net of deposit) 1,952,730 -
(c) Service Tax Demand on Cenvat
Credit taken on input services for
which the Company has filed an
appeal with CESTAT, Chennai (net
of deposit) 201,052 -
(iv) Sales Tax
(a) Entry Tax for certain
interÂstate purchase in Rajasthan
for which matter is subÂjudice in
superior Courts. 797,786 689,236
(b) Sales Tax Demand for A.Y. 2010Â11
for which company has filed
appeal with First Appellate Authority
(net of deposit) 2,000,000 Â
(B) Other Money for which the
Company is contingently liable
(a) Liability in respect of bill of
exchange discounted from bank 275,863,699 218,798,894
Note:Â1 Based on the advice taken by the company, the company believes
that it has good case in respect of all the items under (i) to (iv)
above and hence no provision is considered necessary against the same.
Note:Â2 The appeal has been preferred by the department against the
order of the CIT (Appeal) in relation to disallowances of loss on
account of foreign exchange derivative contracts entered for hedging of
underlying exports.
Particulars 31.03.2015 31.03.2014
3. Capital & Other Commitments
(i) Estimated amount of contracts
remaining to be executed on capital
account
and not provided, (net of advances) 189,484,358 62,327,836
(ii) Estimated amount of contracts
remaining to be executed on traded
moulds &
others not provided,(net of advances) 63,284,955 99,208,872
(iii) Uncalled Liability for
investment in 50:50 Joint Venture - 2,477,295
(iv) Lease Commitments (nonÂcancellable
in nature) (See NoteÂ37) 19,562,400 3,680,000
4. Segment Reporting
Business Segments:Â
The Company is primarily engaged in the business of manufacture of
various type of auto components and LED luminaries. The segment of the
LED luminaries is not reportable segment as it does not exceeds the
quantitative thresholds as laid down in ASÂ17 " Segment reporting".
Since the Company's business activity falls within a single business
segment, there are no additional disclosures to be provided under
Accounting StandardÂ17 'Segment Reporting'.
Geographical Segments:Â
The geographical segment comprises of domestic and overseas market. The
following tables shows the distribution of the Company's Consolidated
sales by geographical market, regardless of where the goods were
produced.
5. Pursuant to the Companies Act 2013 ("The Act"), the Company has
revised depreciation rates on certain fixed assets as per the revised
useful life specified in Schedule II of the Act. Due to this based on
transitional provision as per note 7(b) of the Schedule II, an amount
of Rs. 1,93,57,338 (net of deferred tax of Rs. 99,67,518) have been
adjusted with the retained earnings. Further, depreciation charge for
the year ended 31st March, 2015 is higher by Rs. 7,85,69,460.
6. Previous year's figures have been regrouped/reclassified wherever
necessary to correspond with the current year's
classification/disclosure.
Mar 31, 2014
Corporate Information
Fiem Industries Limited (''The Company'') is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. The Company''s registered office is in New Delhi
and it has several manufacturing plants and depots across the country.
Its shares are listed on National Stock Exchange and Bombay Stock
Exchange in India. It has one wholly owned foreign subsidiary-Fiem
Industries Japan Co., Limited located in Japan. The Company has also
entered into a 50:50 Joint Venture with Horustech Lighting SRL Italy
and incorporated a Joint Venture Company, namely ''Centro Ricerche Fiem
Horustech SRL'' for setting up a design centre during the year. The
Company has research and development facilities located at Rai,
Sonepat, Haryana which has been approved by Department of Science &
Industrial Research, Ministry of Science & Technology. The Company is
in the business of manufacturing and supply of auto components
comprising of automotive lighting & signalling equipments, rear-view
mirror, prismatic mirror, plastic moulded parts and sheet metal
components for motorised vehicles, and LED luminaries comprising of
indoor and outdoor lighting, display panels etc.
(Amount in Rs)
Particulars 31.03.2014 31.03.2013
2 Contingent Liabilities
I.Bill of Exchange Discounted from Bank 218,798,894 216,843,142
II.Income Tax Demand in respect ofAssessment
Year 2011Â12 for which company has filed an
appeal with CIT (Appeal) 62,866,893 Â
III.Import Duty Demand towards imported
capital goods which were sold to the
customer in relation to nil import duty
being paid at the time of import of said
capital goods as a 100% EOU unit for which
the company has filed an appeal with
Commissioner of Central Excise, Chennai
(Net of deposit) 4,340,527 Â
IV.Excise Duty Demand on Modvat Credit taken
on raw material for which the Company has
filed an appeal with CESTAT, New Delhi
(Net of deposit) 2,457,076 2,457,076
V.Entry Ta x for certain interÂstate purchase
in Rajasthan for which matter
is subÂjudice in superior Courts. 689,236 639,693
VI.Liability of Import Duty (For which Bonds
executed in favour of Custom Authorities of
Rs. 10,00,000) towards Import of Capital
Goods without payment of duty for use in the
manufacture of specific excisable goods. 414,414 414,414
VII.Liability of Import Duty towards Export
obligation undertaken by the Company under
EPCG Licenses 644,567 10,162,659
Note:Â The appeal has been preferred against the order of the Assessing
Officer in relation to disallowances of loss on account of foreign
exchange derivative contracts entered for hedging of underlying
exports.
Based on the advice taken by the company, the company believes that it
has good case in respect of all the items under (ii) to (iv) above and
hence no provision is considered necessary against the same.
3 Deferred Tax Liabilities (Net)
The components of deferred tax liability (net) recognized in the
financial statements and deferred tax recognized in the statement of
profit & loss are as under-
4 Lease Transaction
The company has taken commercial premises under nonÂcancellable
operating lease. Minimum lease payments in respect of assets taken on
nonÂcancellable operating lease are as follows:Â
5 Segment Reporting
Business Segments:Â
The Company is engaged in the business of manufacture of various type
of auto components and LED luminaries. The segment of the LED
luminaries is not reportable segment as it does not exceeds the
quantitative thresholds as laid down in ASÂ17 " Segment reporting".
Since the Company''s business activity falls within a single business
segment, there are no additional disclosures to be provided under
Accounting StandardÂ17 ''Segment Reporting''.
Geographical Segments:Â
The geographical segment comprises of domestic and overseas market. The
following tables shows the distribution of the Company''s Consolidated
sales by geographical market, regardless of where the goods were
produced.
Note:Â1.The Company has common assets for producing goods for Domestic
market and overseas market. Hence, separate figures for fixed assets
can not be furnished.
Note:Â2. Sales Revenue by geographical market Outside India includes
indirect export.
6 Mat Credit Entitlement
The Assets of Rs. 3,14,57,986 (Previous Year Rs. 4,22,54,023 shown
under ''Long Term Loans & Advances'' See noteÂ13) Recognized by the
Company as ''MAT Credit Entitlement'' under ''Short Term Loans and
Advances'' (See NoteÂ18) represents that portion of MAT liability, which
can be recovered and setÂoff in subsequent year based on provisions of
Section 115JAA of the Income Ta x Act , 1961. The management, based on
present trend of profitability and also the future profitability
projections, is of the view that there would be sufficient taxable
income in subsequent year, which will enable the Company to utilize MAT
Credit assets.
7 Related Party Disclosures
Name of Related Parties, Transactions and Balances at Reporting date
are as follows
Name of Related Party
(i) Key Management Personnel
Jagjeevan Kumar Jain Chairman and Managing Director
Seema Jain Whole Time Director
Aanchal Jain Whole Time Director
Rahul Jain Whole Time Director
JSS Rao Whole Time Director
Kashi Ram Yadav Whole Time Director
(ii) Related Parties Controlled by Key Management personnel
Fiem Auto Private Limited Entity Controlled by Key Management
Personnel
Jagjeevan Kumar Jain (HUF) Entity Controlled by Key Management
Personnel
Fiem Auto & Electrical Entity Controlled by Key Management
Industries Personnel
(iii) Subsidiary Company
Fiem Industries Japan 100% Subsidiary Company incorporated
Co.Ltd in Japan
(iv) Joint Venture
Centro Ricerche Fiem 50% ownership interest held by
Horustech SRL company incorporated in Italy
Defined Benefit Plans
Disclosure requirement as per Accounting Standard on Employee
Benefit-AS (15)-As per actuarial valuation as on 31.03.14 are as
follows:
1. The estimates of future salary increases; considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
2. The overall expected rate of return on assets is determined based
on the market prices prevailing on that date, applicable to the period
over which the obligation is to be settled.
8 Foreign Exchange Currency Exposure Outstanding as on Reporting Date
(Not Hedged)
The year end foreign currency exposures that have not been hedged by
derivatives instruments or otherwise are as follows:
9 Details of Research and Development Expenses
The Company has incurred following expenses on its Research and
Development Unit situated at Rai, Sonepat, Haryana (India).
10 Joint Venture Company
The Company has entered into a joint venture agreement with ''Horustech
Lighting SRL Italy'' on 2nd December 2013 for forming a joint venture
company to setÂup a design centre at Italy. Accordingly, a company
''Centro Ricerche Fiem Horustech SRL.'' a jointly controlled Entity has
been formed on 12th December 2013. The company has invested a sum of
Rs. 8,41,200/Â(Euro 10,000) towards capital contribution in said Joint
Venture Company as on the date of balance sheet.
The company''s interest in joint venture is reported as Non Current
Investment (Refer Note 12) and is stated at cost.
(a) Pursuant to Accounting StandardÂ27, "Financial Reporting of
Interests in Joint Ventures" notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) disclosure in respect of the said
Joint Venture are given below:
Name of joint Venture Centro Ricerche Fiem Horustech SRL
Description of Interest Jointly Controlled Entity
Country of Incorporation Italy
Proportion of Ownership 50%
Interest as at March 31,2014
(b) In respect of jointly control entity, the company''s share of
assets, liabilities, incomes and expenses are as followsÂ
11 Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s classification/
disclosure.
Mar 31, 2013
Corporate Information
The Company is in the business of manufacturing and supply of auto
components comprising of automotive lighting & signalling equipments,
rear-view mirror, prismatic mirror, plastic moulded parts and sheet
metal components for motorised vehicles.
During the year, the company has made diversification into LED
Luminaries. It has started the production of LED luminaries comprising
of indoor and outdoor lighting, display panels etc. The company''s
registered office is in New Delhi and it has several manufacturing
plants and depots across the country. The research and development unit
is situated at Rai, Sonepat, Haryana. It has one wholly owned foreign
subsidiary in Japan. Its shares are listed on National Stock Exchange
and Bombay Stock Exchange in India.
1 Lease Transaction
Certain factory/depot premises, guesthouse premises and plant &
machinery are obtained on operating leases. There are no contingent
rents in the lease agreements. The lease terms are for 1-3 years and
are renewable at the mutual agreement of the both the parties. There
are no restrictions imposed by lease arrangements. There are no
subleases and all the leases are cancelable in nature.
2 Segment Reporting
Business Segments:-
The Company''s operations are manufacture of various types of automotive
lighting and accessories. Since the Company''s business activity falls
within a single business segment, there are no additional disclosures
to be provided under Accounting Standard-17 ''Segment Reporting''.
Geographical Segments:-
The geographical segment comprises of domestic and overseas market. The
following tables shows the distribution of the Company''s Consolidated
sales by geographical market, regardless of where the goods were
produced.
3 Ministry of Corporate Affairs, Government of India through Circular
No. 25/2012 dated 9th August 2012 has clarified that para 6 of
Accounting Standard AS-11 and para 4 (e) of AS-16 shall not apply to a
Company which is applying para 46-A of AS-11. Consequently, exchange
differences, arising on settlement/ translation of foreign currency
loan to the extent regarded as an adjustment to interest cost as per
para 4(e) of AS-16 and charged to statement of Profit and Loss, have
now been adjusted by the company in the cost of related fixed assets.
As a result exchange loss amounting to Rs. 28,684,487 representing
interest differential up to 31.03.2012 previously expensed has been
reversed and corresponding adjustment has been made to the cost of
Fixed Assets.
4 The Assets of Rs. 42,254,023 (Previous Year Rs. 32,864,655)
Recognized by the Company as ''MAT Credit Entitlement'' under ''Long Term
Loans and Advances'' (See Note-13) represents that portion of MAT
liability, which can be recovered and set-off in subsequent years based
on provisions of Section 115JAA of the Income Tax Act, 1961. The
management, based on present trend of profitability and also the future
profitability projections, is of the view that there would be
sufficient taxable income in foreseeable future, which will enable the
Company to utilize MAT Credit assets.
5 Related Party Disclosures
Name of Related Parties, Transactions and Balances at Reporting date
are as follows
Name of Related Party
(i) Key Management Personnel
Jagjeevan Kumar Jain Chairman and Managing Director
Seema Jain Whole Time Director
Aanchal Jain Whole Time Director
Rahul Jain Whole Time Director (W.e.f. 01.10.2012)
JSS Rao Whole Time Director
Kashi Ram Yadav Whole Time Director
(ii) Related Parties Controlled by Key Management personnel
Fiem Auto Private Limited Entity Controlled by Key Management Personnel
Jagjeevan Kumar Jain (HUF) Entity Controlled by Key Management
Personnel
Fiem Auto & Electrical Industries Entity Controlled by Key Management
Personnel
(iii) Subsidiary Company
Fiem Industries Japan Co. Limited 100% Subsidiary Company Incorporated
in Japan
6 Foreign Exchange Derivatives and Exposure outstanding at end of the
year
Cross Currency Swap & Forward Currency Option
The Company uses Cross-currency swaps (principal only swaps and
interest rate swaps) and forward currency option contracts to hedge its
exposure in foreign currency and interest rates. The counter party is
bank. These contracts are for a period between four to five years. All
the contracts have been settled during the year and there is no pending
contract as on 31.03.2013. The instruments wise information on
derivative instruments as on 31.03.2013 is as follows.
7 Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s
classification/disclosure.
Mar 31, 2012
A) Terms/rights attached to equity shares
The company has only one class of shares referred to as equity shares
having a par value of Rs 10 each. Each holder of equity shares is
entitled to one vote per share. The company declares and pays dividends
in Indian rupees. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual
general Meeting except in case of interim dividend. In the event of
liquidation of the company, the holders of equity shares will be
entitled to receive any of the remaining assets of the company, after
distribution of all preferential amounts. However, no such preferential
amount exist currently. The distribution will be in proportion to the
number of the equity shares held by the shareholders.
b) Aggregate number of bonus shares issued, share issued for
consideration other than cash during the period of five years
immediately preceding the reporting date.
1,04,065 fully paid up equity shares of Rs l0/- each allotted during
2007-08 to the shareholders of M/s Fiem Sung san (India) Limited
Pursuant to its Amalgamation without payment being received in cash.
Indian Rupee Loan from Bank includes
a) From Citibank N.A. has tenor of 5 years with 16 equal quarterly
repayments beginning from the end of 15 months from drawdown. Interest
is payable on monthly basis . The loan carries fixed interest rate of
12% and is secured against exclusive charge on all movable assets
procured out of the term loan and secured against First Pari Passu
Charge on movable fixed assets of kundli unit and Unit -2 at Hosur with
Axis Bank.
b) From Standard Chartered Bank :- The Loan is for 5/4.5 years with 16
/I7/I4 equal quarterly repayment beginning from the end of 15 months
from the drawdown. Interest is monthly payable. The loan carries fixed
interest rate of 9.65% to 10% The Loan is secured against Exclusive
charge on land and building at Hosur Unit-3 situated at Kelamangalam
Road, Hosur, Tamilnadu and Exclusive charge on land and Building of
corporate office in Mansarover Garden, New Delhi and Parri passu charge
on moveable Fixed assets both present and future including plant and
machinery at Hosur unit-3, kelamangalam road.
c) From State bank of Patiala :- The loan is for 6 years with 24
quarterly repayment beginning from the end of 15 months from the
drawdown. Interest is monthly payable. The loan carries floating
interest rate of 11.75% and 12.75% . The Loan is Secured against First
Pari Passu charge with Axis Bank over movable and Immovable fixed
assets of Rai Unit ( Present and future) including equitable mortgage
of Factory Land and Building at Rai, Sonepat and Parri passu charge on
movable fixed assets of Hosur unit- III (tamilnadu) with Standard
Chartered Bank and First Charge on movable fixed assets of Mysore unit
-IV Karnataka and Second charge over the entire fixed assets of unit VI
nalagarh Unit (first charge with Citibank).
d) From Axis Bank :- The loan is for 4 years and 7 years and has Half
yearly and quarterly repayment beginning after moratorium period of 6
and I2 months from the drawdown. Interest is monthly payable. The loan
carries floating interest rate of 11.75% and 12.25%. The Loan is
Secured against First Pari Passu charge on the movable and immovable
fixed assets of Rai Unit including equitable mortgage of Factory Land
and Building of Rai Unit with State Bank of Patiala and secured against
First Pari Passu Charge on movable fixed assets of kundli unit and Unit
-2 at Hosur with Citibank and Term loan of Rs 1.58 crore is secured on
exclusive charge on assets financed out of the term loan.
e) Vehicle loan from banks and others are secured against hypothecation
of the respective vehicles acquired out of proceeds thereof. The Loans
carries interest rate between 10% to 12%.
Foreign currency Loan from Bank includes
a) From Standard Chartered Bank - ECB -I:- The loan is for 5 years with
I6 equal quarterly repayment beginning from the end of I5 months from
the drawdown. Interest rate 3 month LIBOR PLUS 225 BSP p.a. payable
quarterly. The loan is secured against Equitable mortgage on land and
building at Tapukara, Rajasthan Unit on Exclusive basis and Specific
charge on Plant and machinery at Tapukara, Rajasthan Unit
b) From Standard Chartered Bank ECB -2:- The loan is for 5 years with
I6 equal quarterly repayment beginning from the end of I5 months from
the drawdown. Interest is quarterly payable. The loan carries fully
hedged interest cost of 8.50% p.a. The Loan is secured against
Equitable mortgage on land and building at Tapukara, Rajasthan Unit on
Exclusive basis and Specific charge on Plant and machinery at Tapukara,
Rajasthan Unit
Indian Rupee Loan includes
a) From Citibank NA :- Loan outstanding as at 31st March 2012 Rs
23,78,14,029 (Previous Year Rs 25,15,03,586 ) Interest is payable with
monthly rest on the last date of each month in each year or at such
other rest as determined by the bank. The rate of interest is based on
relevant circumstances, including market conditions which currently is
13%. The loan is secured against First Pari Passu Charge with Standard
Chartered Bank on all present and future receivables,
stocks/Inventories and on all fixed assets of the company(excluding
assets specifically purchased out of term loans from Citibank and other
term loan lenders ) including equitable mortgage charge on first pari
passu basis on Land and Building situated at Kundli, Haryana & Thally
Road Hosur, Tamilnadu with Standard Chartered Bank.
b) From Standard Chartered Bank :- Loan outstanding as at 31st March
2012 Rs 10,38,37,440 (Previous Year Rs 6,96,15,026 ) Interest is
monthly payable. Interest is payable at base rate plus margin basis
which may be agreed with bank from time to time which currently is
13.45%. The loan is secured against First Pari Passu charge with
Citibank on Stocks & Book Debts, and Equitable mortgage charge on First
Pari Passu basis on land and building situated at Kundli unit Haryana &
Thally Road Hosur, Tamilnadu and first pari passu charge over all
present and future movable fixed assets of the company with Citibank
(excluding assets specifically financed by other term lenders)
Foreign currency Loan includes
a) From Citibank NA :- Loan outstanding as at 31st March 2012 Rs
10,00,00,000 (Previous Year Rs 6,00,00,000 ) at Fully hedged cost
(interest principal) is fixed at 11.60% p.a. (p.y. 10.75% p.a.) The
loan is fully repayable within 360 days from drawdown. The loan is
secured against First Pari Passu Charge with Citibank on all present
and future receivables, stocks/Inventories and on all fixed assets of
the company(excluding assets specifically purchased out of term loans
from Citibank and other term loan lenders ) including equitable
mortgage charge on first pari passu basis on Land and Building situated
at Kundli, Haryana & Thally Road Hosur, Tamilnadu with Citibank.
Considering the company has been extended credit period upto 45 days by
its vendors and payments being released on a timely basis, there is no
liability towards interest on delayed payments under "The Micro,
Small and Medium Enterprises Development Act 2006" during the year.
There is also no amount of outstanding interest in this regard, brought
forward from previous years. The above information is on basis of
intimation received, on requests made by the company, with regards to
vendors registration under the said Act.
Proposed Dividend
During the year ended 31.03.12, the amount of Rs 3.00 per share as
dividend recognized for distributions to equity shareholders (Previous
Year Rs 2.50 per share)
Provision for warranties
The company gives warranties on certain products and services,
undertaking to repair and replace the items that fails to perform
satisfactorily during the warranty period. Provision made as at
31.03.12 represents the amount of the expected cost of meeting such
obligation of rectification or replacement. The timing of the outflow
is expected to be within warranty period.
(Amount in Rs)
Particulars 31.03.2012 31.03.2011
1. Contingent Liabilities
i. Bill of Exchange Discounted from Bank 255,953,416 258,381,802
ii. Service Tax demand on credit taken on
Outdoor catering for which the
Company has filed an appeal with
CESTAT, Chennai 1,313,248 -
iii. Excise Duty Demand on Modvat Credit
taken on raw material for which the
Company has filed an appeal with
CESTAT, New Delhi 2,507,076 2,507,076
iv. Entry Tax for certain inter-state
purchase in Rajasthan for which
matter is sub-judice in superior
Courts. 535,777 -
v. Claim against the Company not
acknowledged as debts, being
disputed by the Company 500,000 500,000
2 Lease Transaction
Certain factory/depot premises, guesthouse premises and plant &
machinery are obtained on operating leases. There are no contin- gent
rents in the lease agreements. The lease terms are for 1-3 years and
are renewable at the mutual agreement of the both the parties. There
are no restrictions imposed by lease arrangements. There are no
subleases and all the leases are cancelable in nature.
3 Segment Reporting Business Segments:-
The Company's operations are manufacture of various types of automotive
lighting and accessories. Since the Company's business activity falls
within a single business segment, there are no additional disclosures
to be provided under Accounting Standard-17 'Segment Repoting'.
Geographical Segments:-
The geographical segment comprises of domestic and overseas market. The
following tables shows the distribution of the Company's Consolidated
sales by geographical market, regardless of where the goods were
produced.
1. The estimates of future salary increases; considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
2. The overall expected rate of return on assets is determined based on
the market prices prevailing on that date, applicable to the period
over which the obligation is to be settled.
3. Information relating to experience adjustment on Plan Assets and
Plan Liability in the actuarial valuation of gratuity as required by
Para 120 (n)(ii) of the Accounting standard 15 (Revised) on Employee
benefits is not available with the company.
4. The company's expected contribution to the fund in the next year is
not presently ascertainable and hence, the contribution expected to be
paid to the plan during the annual period beginning after the balance
sheet date as required by Para 120 (o) of the Accounting standard 15
(Revised) on Employee benefits is not disclosed.
5 Foreign Exchange Derivatives and Exposure outstanding at end of the
year Cross Currency Swap & Forward Currency Option
The Company uses Cross-currency swaps (principal only swaps and
interest rate swaps) and forward currency option contracts to hedge its
exposure in foreign currency and interest rates. The counter party is
bank. These contracts are for a period between four to five years. The
instruments wise information on derivative instruments as on 31.03.2012
is as follows.
6 Details of Research and Development Expenses
The Company has incurred following expenses on its Research and
Development Unit situated at Rai, Sonepat, Haryana (India). The Unit is
Recognised by Department of Science and Industrial Research, Ministry
of Science and Technology w.e.f 23/12/2011. The approval for said
Recongnised R&D Unit is awaited.
7 The figures appearing in brackets pertains to previous year.
8 The financial statements for the year ended 31 March 2011 had been
prepared as per the then applicable, pre-revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956 the financial statements for the year
ended 31 March 2012 are prepared as per Revised Schedule VI.
Accordingly, the previous year figures have also been re-classified to
conform to this' classification. The adoption of Revised Schedule VI
for previous year figures does not impact recognition and measurement
principles followed for preparation of financial statements.
Mar 31, 2011
1. Nature of Operation
The company is in the business of manufacturing and suppliers of auto
components, mainly, automotive lighting & signally equipments, Rear-
view mirror, prismatic mirror, sheet metal parts and moulds, block &
dies etc for two-wheeler and four wheeler applications. It has entered
into a technical assistance agreement with Ichikoh Industries Limited,
Japan.
2. Reclassified/Reworking of Previous year Figures
The previous year's figures have been reworked, regrouped, rearranged
and reclassified wherever necessary. Accordingly, amount and other
disclosures for the preceding year are included as an integral part of
the current financial statement and are to be read in relation to the
amounts and other disclosure relating to the current year.
3. Contingent Liabilities:
(Amount in Rs.)
Sr. No. Particulars 31.03.2011 31.03.2010
a. Performance and Financial Guarantees
given by Banks on behalf of the Company
Guarantee given to Custom & Excise
Authorities 18,30,570 18,30,570
Guarantee given to Commercial Tax Officers 3,85,000 3,25,000
Guarantee given to Himachal Pradesh
Electricity Board H.P. 18,30,000 12,00,000
Guarantee given to Original
Equipment Buyer (OEM) 2,50,04,900 89,81,025
against supply of moulds & dies within
the stipulated time Guarantee given to
Haryana State Pollution Control Department 20,16,135 20,16,135
Guarantee given to Dept of
Indigenization /DGEME Ministry of
Defence New Delhi against supply of
Automotive lights within the
stipulated time. 45,077 45,077
Guarantee given to APSRTC Hydrabad
against supply of Automotive lights
within the stipulated time. 1,00,000 -
b. Disputed Liabilities in appeal
Excise duty demand on account of availing
excess CENVAT credit on input procured
from a 100% Export oriented undertaking
and penalty equal to excise duty taken 25,07,076 25,07,076
Income Tax matters under dispute in respect
of Assessment Year 2006-07 for which
Company has filed appeal with CIT
(Appeals), New Delhi - 4,77,395
c. Sales Bill Discounted from Banks
Sales Bill Discounted from Bank Not Matured
up to reporting date 25,83,81,802 19,09,19,068
4. Related Party Disclosures
Name of Related Parties, Transactions and Balances at Reporting date
are as follows: Name of Related Party
Key Management Personnel
Jagjeevan Kumar Jain Chairman and Managing Director
Seema Jain Whole Time Director
Aanchal Jain Whole Time Director
JSS Rao Whole Time Director
Kashi Ram Yadav Whole Time Director
Relative of Key Management Personnel
Rahul Jain Son of Jagjeevan Kumar Jain-Chairman and Managing Director
and Seema Jain-Whole
time Director, Brother of Aanchal Jain-Whole Time Director
Related Parties Controlled by Key Management personnel
Fiem Auto Private Limited Entity Controlled by Key Management Personnel
Jagjeevan Kumar Jain (HUF) Entity Controlled by Key Management
Personnel
Fiem Auto & Electrical Industries Entity Controlled by Key Management
Personnel
Subsidiary Company
Fiem Industries Japan Co. Ltd. 100% Subsidiary Company Incorporated in
Japan
5. Earning Per Share
As required by Accounting Standard (AS-20) "Earning Per Share" the
numerators and denominators used to calculate Basic Earning Per Share
are follows. For the purpose of weighted average number of equity
shares, the share issued within the month has been taken full month.
6. Segment Reporting
Business Segments:
The Company's operations are manufacture of various types of automotive
lighting system and accessories. Since the Company's business activity
falls within a single business segment, there are no additional
disclosures to be provided under Accounting Standard-17 'Segment
Reporting '.
7. Lease Transaction
Certain factory/depot premises, guesthouse premises and plant &
machinery are obtained on operating leases. There are no contingent
rents in the lease agreements. The lease terms are for 1-3 years and
are renewable at the mutual agreement of the both the parties. There
are no restrictions imposed by lease arrangements. There are no
subleases and all the leases are cancelable in nature.
8. Disclosures required by Accounting Standard (AS)-29
I. Nature of Provisions: The Company gives warranties on certain
products and services, undertaking to repair or replace the items that
fails to perform satisfactory during the warranty period. Provision
made as at 31st March 2011 represents the amount of the expected cost
of meeting such obligations of rectification/replacement. The timing of
the outflows is expected to be within warranty period.
9. Foreign Exchange Derivatives and Exposure outstanding at end of
the year
A. Cross Currency Swap & Forward Currency Option:
The Company uses Cross-currency swaps (principal only swaps and
interest rate swaps) and forward currency option contracts to hedge its
exposure in foreign currency and interest rates. The counter party is
bank. These contracts are for a period between four to five years. The
instruments wise information on derivative instruments as on 31.03.2011
is as follows.
B. Target Redemption Forward Contracts
The company uses Target Redemption Forward Contract to hedge its
exposure in foreign currency receivables. The counter party is bank.
These contracts are for a period of three years.
1. One of the Target Redemption Contracts consists of a total 36
foreign exchange ("FX") transactions and the final settlement date was
12th October 2010. At each expiry date, the reference exchange rate is
compared to the strike rate. If the reference exchange rate is more
than or equal to strike rate, then the notional amount of USD 1,25,000
is applicable. On the other hand, if the reference exchange rate is
less than the strike rate, then the notional amount is USD 2,50,000 is
applicable. The entire Target Redemption Contract is subject to knock
out conditions. This contract has been finally settled during the year
and has resulted in a loss of Rs. 10,71,23,712 (Previous Year: This
contract was fair valued as on 31.03.2010 and resulted in a notional
loss of Rs. 4,48,37,275).
2. The other Target Redemption Contracts consists of a total 36
foreign exchange ("FX") transactions and the final settlement date was
22nd February 2011. At each expiry date, the reference exchange rate is
compared to the strike rate. If the reference exchange rate is more
than or equal to strike rate, then the notional amount of USD 1,25,000
is applicable. On the other hand, if the reference exchange rate is
less than the strike rate, then the notional amount is USD 2,50,000 is
applicable. The entire Target Redemption Contract is subject to knock
out conditions. This contract has been finally settled during the year
and has resulted in a loss of Rs. 6,99,27,961 (Previous Year: This
contract was fair valued as on 31.03.2010 and resulted in a notional
loss of Rs. 1,70,24,238).
C. Movement in Hedging Reserve Account
The movement in Hedging Reserve Account during the year ended March 31,
2011, for derivative transactions.
D. Foreign Exchange Currency Exposure Fully Hedged
During the year, the Company has taken FCNR Based loan for 360 days
against cash existing credit facility with CITIBANK N.A., which are
fully protected against the currency and interest movements in the
market. The basic details are as follows.
Purpose To Finance working capital requirement of the Company
Amount USD 13,15,789.47 equivalent to INR 6,00,00,000
Booking Date February 2, 2011
Maturity Date January 27, 2012
Interest Rate USD LIBOR 1.25% p.a. payable monthly
Additional Interest Cost for Hedged INR 51,61,316/- (Fully Hedged
@10.75% p.a.)
(Payable at the time of Maturity Date)
10. Transfer to General Reserve
The Company has transferred Rs. 1,25,00,000 (Previous Year Rs.
1,10,00,000) to General Reserve from Profit and Loss Account as per
Companies (Transfer of Profits to Reserves) Rules, 1975.
11. The figures appearing in brackets pertains to previous year
12. Figures have been rounded off to the nearest rupee.
Mar 31, 2010
1. Nature of Operation
The company is in the business of manufacturing and suppliers of auto
components, mainly, automotive lighting & signally equipments, Rear-
view mirror, prismatic mirror, sheet metal parts and moulds, block &
dies etc for two-wheeler and four wheeler applications. It has entered
in to a license and technical assistance agreement with Ichikoh
Industries Limited, Japan and Batz S. Coop, Spain.
2. Reclassified/Reworking of Previous year Figures
The previous years figures have been reworked, regrouped, rearranged
and reclassified wherever necessary. Accordingly, amount and other
disclosures for the preceding year are included as an integral part of
the current financial statement and are to be read in relation to the
amounts and other disclosure relating to the current year.
3. Related Party Disclosures
Name of Related Parties with whom Transactions were carried out during
the year
a. Key Management Personnel (KMP)
-* Mr. Jagjeevan Kumar Jain-Managing director
- Mrs. Seema Jain-Whole time director
- Ms. Aanchal Jain-Whole time director
- Mr. JSS Rao-Whole time director
- Mr. Kashi Ram Yadav-Whole time director
b. Relative of Key Management Personnel (KMP)
- Mr. Rahul Jain
c. Related Parties Controlled by KMP
- Fiem Auto Private Limited
- Jagjeevan Kumar Jain (HUF)
- Fiem Auto & Electrical Industries (KMP is the Sole Proprietor)
d. Subsidiary Company
- Fiem Industries Japan Co., Ltd.
4. Contingent Liabilities
(Amount in Rs.)
Particulars 31.03.2010 31.03.2009
Guarantee/security given to Custom & Excise
Authorities
(Margin for guarantee provided
Rs. 170,000-PY Rs. 1,70,000) 17,00,000 17,00,000
Guarantee/security given to Himachal Pradesh
State Electricity Board
(Margin for guarantee provided Rs. 1,20,000-
Previous year Rs. 1,20,000) 12,00,000 12,00,000
Excise duty demand matters under dispute
(in respect of which appeal has
been filed and for which security of Rs.
50,000 has been deposited with the department.) 25,07,076 25,07,076
Guarantee/security given to OEM against supply
of moulds & dies
(Margin for guarantee provided Rs. 8,98,103
Previous year Rs. Nil) 89,81,025 -
Guarantee/security given to Haryana State
Pollution Control
(Margin for guarantee provided Rs. 2,01,613
Previous year Rs. Nil) 20,16,135 -
Guarantee/security given to DTE of
Indigenisation/DGEME Ministry of
Defence New Delhi (Margin for guarantee
provided Rs. 4,508 Previous year Rs. Nil) 45,077 -
Income Tax matters under dispute in respect
of Assessment Year 2006-07 for
which Company has filed appeal with CIT
(Appeals), New Delhi 4,77,395 4,77,395
Bill Discounted from Bank (Not Matured) 19,09,19,068 -
5. Segment Reporting
The companys operations predominantly are manufacture of automotive
parts and accessories. The company is managed organizationally as a
unified entity and all its assets other than export debtors are located
in India.
6. Lease Transaction
Lease payment under Operating Lease have been accounted for in
accordance with AS-19 of the ICAI "Accounting for Leases" and
accordingly lease payment under operating lease have been recognized as
an expenses in the profit and loss account over the lease term.
Certain office/factory premises, guesthouse premises and plant &
machinery (DG Set) are obtained on operating leases. There are no
contingent rents in the lease agreements. The lease terms is for 1-3
years and are renewable at the mutual agreement of the both the
parties. There are no restrictions imposed by lease arrangements. There
are no subleases and all the leases are cancelable in nature
7. Disclosures required by Accounting Standard (AS)-29
I. Nature of Provisions: The Company gives warranties on certain
products and services, undertaking to repair or replace the items that
fails to perform satisfactory during the warranty period. Provision
made as at 31st March 2010 represents the amount of the expected cost
of meeting such obligations of rectification/replacement. The timing of
the outflows is expected to be within warranty period.
B. Target Redemption Forward Contracts
The Company uses Target Redemption Forward Contract to hedge its
exposure in foreign currency receivables. The counter party is bank.
These contracts are for a period of three years.
One of the Target Redemption Contracts consists of a total 36 foreign
exchange ("FX") transactions with 7 transactions outstanding as on 31st
March 2010 and final settlement date is 12th October 2010. At each
expiry date, the reference exchange rate is compared to the strike
rate. If the reference exchange rate is more than or equal to strike
rate, then the notional amount of USD 1,25,000 is applicable. On the
other hand, if the reference exchange rate is less than the strike
rate, then the notional amount is USD 2,50,000 is applicable. The
entire Target Redemption Contract is subject to knock out conditions.
The other Target Redemption Contracts consists of a total 36 foreign
exchange ("FX") transactions with 11 transactions outstanding as on
31st March 2010 and final settlement date is 22nd February 2011. At
each expiry date, the reference exchange rate is compared to the strike
rate. If the reference exchange rate is more than or equal to strike
rate, then the notional amount of USD 1,25,000 is applicable. On the
other hand, if the reference exchange rate is less than the strike
rate, then the notional amount is USD 2,50,000 is applicable. The
entire Target Redemption Contract is subject to knock out conditions.
The change in fair value of the Target Redemption Contracts resulted in
to notional loss of Rs. 6,18,61,513. This fair value is based on marked
to market valuation at balance sheet date.
8. Transfer to General Reserve
The Company has transferred Rs. 1,10,00,000 (Previous Year Rs.
50,00,000) to General Reserve from Profit and Loss Account as per
Companies (Transfer of Profits to Reserves) Rules, 1975.
9. The figures appearing in brackets pertains to previous year
10. Figures have been rounded off to the nearest rupee.