Bajaj Auto Ltd. ಖಾತೆಯ ಉಪಯುಕ್ತ ಮಾಹಿತಿ
Mar 31, 2023
Estimation of fair value
The best evidence of fair value is current prices in an active market for similar properties. Since investment properties leased out by the Company are cancellable and non-cancellable leases, the market rate for sale/purchase of such premises are representative of fair values. Company''s investment properties are at a location where active market is available for similar kind of properties. Hence, fair value is ascertained on the basis of market rates prevailing for similar properties in those location determined by an independent registered valuer, as defined under rule 2 of Companies (Registered Valuers and Valuation)
Rules 2017, and consequently classified as a level 2 valuation.
Notes to investments
1 investments made by the Company other than those with a maturity of less than one year, are intended to be held for long-term. On an assessment of the expected credit loss due to significant changes in risk profile, no material provisions are required to be made.
2 in absence of an active market and non availability of quotes on a recognised stock exchange, investment in fixed maturity plans and fixed term plans though listed on recognised stock exchanges are disclosed as unquoted. Other mutual funds, though unlisted, are quoted on recognised stock exchanges at their previous day NAVs which is the quote for the day.
3 Refer note 1 (6) for accounting policy on investments and note 33 for credit risk management related to investments.
Amount recognised in profit and Loss
Write-downs of inventories to net realisable value/reversal of provision for write-down, resulted in net loss/(gain) of H 52.20 crore [Previous year - H 6.74 crore]. These were recognised as an expense/(income) during the year in the Statement of Profit and Loss.
* The Board of Directors at its meeting held on 27 June 2022 approved a proposal to buyback fully paid up equity shares of the Company having a face value of H 10 each from the existing shareholders (except promoters, promoter group and persons in control of the Company) from open market through stock market mechanism (i.e. through National Stock Exchange of India Ltd. and BSE Ltd.) at a maximum buyback price not exceeding H 4,600 per equity share and maximum buyback size up to H 2,500 crore.
In this regard, the Company bought back 6,409,662 number of equity shares from the stock exchange at a volume weighted average buyback price of H 3,900.31 per share comprising 2.22% of the pre-buyback number of shares of the Company. The buyback resulted in a cash outflow of H 2,499.97 crore (excluding transaction cost and tax on buyback). An amount of H 582.39 crore was paid towards tax on buyback. In accordance with relevant statutory provisions, the Company has created a capital redemption reserve of H 6.41 crore, equal to the nominal value of shares bought back, as an appropriation from retained earnings.
The Buyback Committee of the Company, at its meeting held on 10 October 2022, approved the completion and closure of the buyback.
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of H 10 per share. Each holder of equity shares is entitled to one vote per share. The interim dividend declared by the Board of Directors; and the final dividend proposed by the Board of Directors and approved by the shareholders in the annual general meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.
The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature and purpose of reserve:
General reserve
General reserve is free reserve available for distribution as recommended by Board in accordance with requirements of the Companies Act, 2013, Mandatory transfer to general reserve is not required under the Companies Act, 2013,
Retained earnings
Retained earnings is a free reserve, This is the accumulated profit earned by the Company till date, less transfer to general reserve, dividend and other distributions made to the shareholders,
Cash flow hedging reserve and Costs of hedging reserve
It represents the effective portion of the fair value of forward/option contracts designated as cashflow hedge,
FVTOCI reserve
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income, These changes are accumulated within the FVTOCI reserve within equity,
Capital redemption reserve
As per section 69 of the Companies Act 2013, where a company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to the capital redemption reserve account, The capital redemption reserve account may be applied by the company, in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares,
Share based payment reserve
Share based payment reserve is created as required by Ind AS 102 âShare Based Payments'' on the employee stock option scheme operated by the Company for its employees,
Treasury shares
The reserve for shares of the Company held by the Bajaj Auto ESOP Trust (ESOP Trust), Company has issued employees stock option scheme for its employees, The equity shares of the Company have been purchased and held by ESOP Trust, Trust to transfer in the name of employees at the time of exercise of option by employees,
ii) Fair value hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets. Quotes would include rates/values/valuation references published periodically by BSE, NSE etc. basis which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds, as the case may be, that have quoted price/rate/value.
Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximise the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
Valuation Techniques used to determine fair value
Valuation Techniques used to determine fair value include
⢠Open ended mutual funds at NAV''s/rates declared and/or quoted
⢠Derivative Instruments at values determined by counter parties/Banks using market observable data.
The Company''s activities expose it to credit risk, liquidity risk and market risk (including foreign exchange risk). In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments such as foreign exchange forward contracts and foreign currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of available funds. The Company''s risk management is carried out by a treasury department as per such policies approved by the Board of Directors. Accordingly, Company''s treasury department identifies, evaluates and hedges financial risks.
A) Credit risk
Credit risk refers to the risk that a counterparty may default on its contractual obligations leading to a financial loss to the Company. Credit risk primarily arises from cash and cash equivalents, derivative financial instruments, financial assets measured at amortised cost, financial assets measured at fair value through profit or loss and trade receivables. None of the financial instruments of the Company result in material concentration of credit risk.
Credit risk management
For Derivative instruments exposures are extended with multiple banks holding high credit risk ratings.
In regard to Trade receivables, which are typically unsecured, credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom credit is extended in the normal course of business. The Company follows a âsimplified approach'' for recognition of impairment loss allowance on trade receivables. Accordingly, impairment loss allowance is recognised based on lifetime expected credit losses at each reporting date, right from its initial recognition. The provision rates are based on days past due; and the calculation reflects the probability weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.
For other financial assets, the Company has an investment policy which allows the Company to invest only with counterparties having a credit rating egual to or above AA and A1 , The Company reviews the creditworthiness of these counterparties on an on-going basis. Counter party limits maybe updated as and when reguired, subject to approval of Board of Directors.
B) Liquidity risk
The Company''s principal source of liguidity are âcash and cash eguivalents'' and cash flows that are generated from operations.
The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. The Company has no outstanding term borrowings except sales tax deferral liability amounting to H 124.23 crore which are interest free and are repayable after 10 years from the Balance Sheet date. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar profile thereby ensuring safety of capital and availability of liguidity as and when reguired. Hence the Company carries a negligible liguidity risk.
C) Market risk
(i) Foreign currency risk
The Company has significant exports and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD. Foreign exchange risk arises from highly probable forecast transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through sensitivity analysis. The primary objective for forex hedging against anticipated foreign currency risks will be to hedge the Company''s highly probable foreign currency cash flows arising from such transactions (thus reducing volatility of cash flow and profit).
The Company''s risk management policy permits the use of plain foreign exchange forward contracts and foreign currency option contracts including Foreign Currency - INR Option Cost Reduction Structures to hedge forecasted sales.
The Company also imports certain materials the value of which is not material as compared to value of exports. Currently, Company does not hedge this exposure. Nevertheless, Company may wish to hedge such exposures.
The Company uses a combination of foreign currency option contracts and foreign exchange forward contracts to hedge its exposure in foreign currency risk. The Company designates forward contracts in entirety and intrinsic value of foreign currency option contracts as the hedging instrument. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised through other comprehensive income in the ''Cash flow hedging reserve'' within equity. The change in time value that relate to the hedged item (aligned time value) is recognised through other comprehensive income in ''Costs of hedging reserve'' within equity. Amount recognised in equity is reclassified to profit or loss when the hedged item (i.e. forecasted export sales) affects Statement of Profit and Loss. The ineffective portion of change in fair value of the hedging instrument and any residual time value (the non-aligned portion), if any, is recognised in the statement of profit and loss immediately.
The intrinsic value of foreign exchange option contracts is determined with reference to the relevant spot market exchange rate.
The differential between the contracted strike rate and the spot market exchange rate is defined as the intrinsic value. Time value of the option is the difference between fair value of the option and the intrinsic value.
The Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, so a Qualitative assessment of effectiveness is performed. During the years ended 31 March 2023 and 31 March 2022, the Company did not have any hedging instruments with terms which were not aligned with those of the hedged items.
Therefore, no ineffectiveness is recognised in the Statement of Profit and Loss during the years ended 31 March 2023 and 31 March 2022.
(ii) Other risks
The Company has deployed its surplus funds into various financial instruments including units of mutual funds, bonds, fixed maturity plans, exchange traded funds, index funds etc. The Company is exposed to price risk on such investments, which arises on account of movement in interest rates, liquidity and credit Quality of underlying securities.
The Company has invested its surplus funds primarily in debt based mutual funds and fixed maturity plans. The value of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis. The Company has not performed a sensitivity analysis on these mutual funds based on estimated fluctuations in their NAV as in management''s opinion, such analysis would not display a correct picture.
a) Objectives, policies and processes of capital management
The Company is cash surplus and has no capital other than Equity, The Company is not exposed to any regulatory imposed capital requirements,
The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with the guidelines set out by the Management, Safety of capital is of prime importance to ensure availability of capital for operations, Investment objective is to provide safety and adequate return on the surplus funds,
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35 Contingent liabilities |
||
|
(H In Crore) |
||
|
> (/> Cl) CO |
March |
|
|
Particulars |
2023 |
2022 |
|
a. Claims against the Company not acknowledged as debts |
205.04 |
201.45 |
|
b. Excise, Service tax and Customs matters under dispute |
341.75 |
340.72 |
|
c. Income tax matters |
941.84 |
899.21 |
|
d. Value Added Tax (VAT)/Sales Tax matters under dispute |
126.62 |
142.00 |
|
e. Claims made by temporary workmen Pending before various judicial/appellate authorities in respect of similar matters adjudicated by the Supreme Court. The matter is contingent on the facts and evidence presented before the courts/ adjudicating authorities and not necessarily likely to be influenced by the Supreme Court''s order |
Liability unascertained |
Liability unascertained |
|
In all the cases mentioned above, outflow is not probable and hence not provided by the Company. |
||
|
36 Capital commitments |
||
|
(H In Crore) |
||
|
> (/) Cl) CO |
March |
|
|
Particulars |
2023 |
2022 |
|
Capital commitments, net of capital advances |
169.55 |
589.55 |
Segment information based on consolidated financial statements is given in note 43 to consolidated financial statements, which are attached to these financial statements.
The Company''s Core Management Committee (CMC), examines the Group''s performance both from a product and geographical perspective and has identified two reportable operative business segments. The Group''s significant source of risk and rewards are derived from Automotive business and Investments, the performance of which is reviewed by the committee on a periodic basis and hence considered as individual operative segments.
The business segments comprise the following:
i. Automotive
ii. Investments
iii. Others
Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Indian Accounting Standard 19 the details of which are as hereunder.
Gratuity
The Company provides for gratuity payments to employees. The gratuity benefit payable to the employees of the Company is greater of the provisions of the Payment of Gratuity Act, 1972 and the Company''s gratuity scheme. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The gratuity plan is a funded plan and the Company makes contributions to approved gratuity fund.
These sensitivities have been calculated to show the movement in defined benefit obligation (DBO) in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.
Funding arrangement and policy
The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.
The trustees of the plan have outsourced the investment management of the fund to insurance companies. The insurance companies in turn manage these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations.
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company''s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The expected contribution payable to the plan next year is H 50 crore
As a lessor
The Company has given premises on operating leases. These lease arrangements range for a period between eleven months to nine years and include both cancellable and non cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.
43 Share based payments (Employee stock option plans)
The Board of Directors at its meeting held on 30 January 2019, approved an Employee Stock Options Scheme CESOS''). Pursuant to the scheme stock options up to a maximum of 0.17% of the then issued equity capital of the Company aggregating to 5,000,000 equity shares of the face value of H 10 each can be issued in a manner provided in the SEBI (Share Based Employee Benefits) Regulations, 2014 as amended. The shareholders of the Company vide their special resolution passed through postal ballot on 11 March 2019 approved the issue of equity shares of the Company under one or more Employee Stock Option Scheme(s).
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 âThe 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.
information in this regard is on basis of intimation received, on reguests made by the Company, with regards to registration of
vendors under the said Act.
a. There have been no events after the reporting date that reguire disclosure in these financial statements.
b. Amounts less than H 50,000 have been shown at actual against respective line items statutorily reguired to be disclosed.
c. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
d. The Company has performed the assessment to identify transactions with struck off companies as at 31 March 2023 and identified no company with any transactions.
e. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
f. The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person.
g. No funds have been advanced or loaned or invested either from borrowed funds or share premium or any other sources or kind of funds by the Company to or in any other person or entity, including foreign entities (âintermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (âUltimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
h. No funds have been received by the Company from any person or entity, including foreign entities (âFunding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
i. The Company has not been declared wilful defaulter by any bank or financial institution or Government or any Government authority.
j. The Company has not been sanctioned working capital limits from banks or financial institutions during any point of time of the year on the basis of security of current assets.
k. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the income Tax Act, 1961).
l. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
m. Figures for previous year/period have been regrouped wherever necessary.
Mar 31, 2022
ii) Contractual obligations
The Company has no restrictions on the readability of its investment property. There are no contractual obligations to purchase, construct or develop investment property as at the year end.
iii) Leasing arrangements
Investment property is leased out to various tenants under operating leases. Disclosure on future rent receivable is included in Note 40.
Estimation of fair value
The best evidence of fair value is current prices in an active market for similar properties. Since investment properties leased out by the Company are cancellable and non-cancellable leases, the market rate for sale/purchase of such premises are representative of fair values. Company''s investment properties are at a location where active market is available for similar kind of properties. Hence, fair value is ascertained on the basis of market rates prevailing for similar properties in those location determined by an independent registered valuer, as defined under Rule 2 of The Companies (Registered Valuers and Valuation) Rules 2017, and consequently classified as a level 2 valuation.
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of H 10 per share. Each holder of equity shares is entitled to one vote per share. The interim dividend declared by the Board of Directors; and the final dividend proposed by the Board of Directors and approved by the shareholders in the annual general meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares wilt be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Nature and purpose of reserve:
General reserve
General reserve is free reserve available for distribution as recommended by Board in accordance with requirements of the Companies Act, 2013. Mandatory transfer to general reserve is not required under the Companies Act, 2013.
Retained earnings
Retained earnings is a free reserve. This is the accumulated profit earned by the Company till date, less transfer to general reserve, dividend and other distributions made to the shareholders.
Cash flow hedging reserve and Costs of hedging reserve
It represents the effective portion of the fair value of forward/option contracts designated as cashflow hedge.
FVTOCI reserve
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI reserve within equity.
Share based payment reserve
Share based payment reserve is created as required by Ind AS 102 âShare Based Payments'' on the employee stock option scheme operated by the Company for its employees.
Treasury shares
The reserve for shares of the Company held by the Bajaj Auto ESOP Trust (ESOP Trust). Company has issued employees stock option scheme for its employees. The equity shares of the Company have been purchased and held by ESOP Trust. Trust to transfer in the name of employees at the time of exercise of option by employees.
ii) Fair value hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets. Quotes would include rates/values/valuation references published periodically by BSE, NSE etc. basis which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds, as the case may be, that have quoted price/rate/value.
Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximise the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
Valuation Techniques used to determine fair value
Valuation Techniques used to determine fair value include
⢠Open ended mutual funds at NAV''s/rates declared and/or quoted
⢠Derivative Instruments at values determined by counter parties/Banks using market observable data.
The Company''s activities expose it to credit risk, liquidity risk and market risk (including foreign exchange risk). In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments such as foreign exchange forward contracts and foreign currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
This note explains the sources of risk which the Company is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements
The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of available funds. The Company''s risk management is carried out by a treasury department as per such policies approved by the Board of Directors. Accordingly, Company''s treasury department identifies, evaluates and hedges financial risks.
A) Credit risk
Credit risk refers to the risk that a counterparty may default on its contractual obligations leading to a financial loss to the Company. Credit risk primarily arises from cash and cash equivalents, derivative financial instruments, financial assets measured at amortised cost, financial assets measured at fair value through profit or loss and trade receivables. None of the financial instruments of the Company result in material concentration of credit risk.
Credit risk management
For Derivative instruments exposures are extended with multiple banks holding high credit risk ratings.
In regard to Trade receivables, which are typically unsecured, credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom credit is extended in the normal course of business. The Company follows a âsimplified approach'' for recognition of impairment loss allowance on trade receivables. Accordingly, impairment loss allowance is recognised based on lifetime expected credit losses at each reporting date, right from its initial recognition. The provision rates are based on days past due; and the calculation reflects the probability weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.
For other financial assets, the Company has an investment policy which allows the Company to invest only with counterparties having a credit rating equal to or above AA and A1 . The Company reviews the creditworthiness of these counterparties on an on-going basis. Counter party limits maybe updated as and when required, subject to approval of Board of Directors.
B) Liquidity risk
The Company''s principal source of liquidity are âcash and cash equivalents'' and cash flows that are generated from operations.
The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. The Company has no outstanding term borrowings except sales tax deferral liability amounting to H 122.77 crore which are interest free and are repayable after 11 years from the Balance Sheet date. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar profile thereby ensuring safety of capital and availability of liquidity as and when required.
C) Market risk
(i) Foreign currency risk
The Company has significant exports and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD. Foreign exchange risk arises from highly probable forecast transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through sensitivity analysis. The primary objective for forex hedging against anticipated foreign currency risks will be to hedge the Company''s highly probable foreign currency cash flows arising from such transactions (thus reducing volatility of cash flow and profit).
The Company''s risk management policy permits the use of plain foreign exchange forward contracts and foreign currency option contracts including Foreign Currency - INR Option Cost Reduction Structures to hedge forecasted sales.
The Company also imports certain materials the value of which is not material as compared to value of exports. Currently,
Company does not hedge this exposure. Nevertheless, Company may wish to hedge such exposures.
The Company uses a combination of foreign currency option contracts and foreign exchange forward contracts to hedge its exposure in foreign currency risk. The Company designates forward contracts in entirety and intrinsic value of foreign currency option contracts as the hedging instrument. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised through other comprehensive income in the âCash flow hedging reserve'' within equity. The change in time value that relate to the hedged item (aligned time value) is recognised through other comprehensive income in âCosts of hedging reserve'' within equity. Amount recognised in equity is reclassified to profit or loss when the hedged item (i.e. forecasted export sales) affects Statement of Profit or Loss. The ineffective portion of change in fair value of the hedging instrument and any residual time value (the non-aligned portion), if any, is recognised in the Statement of Profit and Loss immediately.
The intrinsic value of foreign exchange option contracts is determined with reference to the relevant spot market exchange rate.
The differential between the contracted strike rate and the spot market exchange rate is defined as the intrinsic value. Time value of the option is the difference between fair value of the option and the intrinsic value.
The Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, so a qualitative assessment of effectiveness is performed. During the years ended 31 March 2022 and 31 March 2021, the Company did not have any hedging instruments with terms which were not aligned with those of the hedged items.
Therefore, no ineffectiveness is recognised in the Statement of Profit and Loss during the years ended 31 March 2022 and 31 March 2021.
(ii) Other risks
The Company has deployed its surplus funds into various financial instruments including units of mutual funds, bonds, fixed maturity plans etc. The Company is exposed to price risk on such investments, which arises on account of movement in interest rates, liquidity and credit quality of underlying securities.
The Company has invested its surplus funds primarily in debt based mutual funds and fixed maturity plans. The value of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis. The Company has not performed a sensitivity analysis on these mutual funds based on estimated fluctuations in their NAV as in management''s opinion, such analysis would not display a correct picture.
a) Objectives, policies and processes of capital management
The Company is cash surplus and has no capital other than Equity. The Company is not exposed to any regulatory imposed capital requirements.
The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with the guidelines set out by the Management. Safety of capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds.
Segment information based on consolidated financial statements is given in note 37 to consolidated financial statements, which are attached to these financial statements.
The Company''s Core Management Committee (CMC), examines the Group''s performance both from a product and geographical perspective and has identified two reportable operative business segments. The Group''s significant source of risk and rewards are derived from Automotive business and Investments, the performance of which is reviewed by the committee on a periodic basis and hence considered as individual operative segments.
Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Indian Accounting Standard 19 the details of which are as hereunder.
Gratuity
The Company provides for gratuity payments to employees. The gratuity benefit payable to the employees of the Company is greater of the provisions of the Payment of Gratuity Act, 1972 and the Company''s gratuity scheme. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The gratuity plan is a funded plan and the Company makes contributions to approved gratuity fund.
Sensitivity Analysis
Gratuity is a tump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarises the impact in percentage terms on the reported defined benefit obligation (DBO) at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.
These sensitivities have been calculated to show the movement in defined benefit obligation (DBO) in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.
Funding arrangement and policy
The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.
The trustees of the plan have outsourced the investment management of the fund to insurance companies. The insurance companies in turn manage these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations.
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company''s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The expected contribution payable to the plan next year is H 50 crore.
43 Share based payments (Employee stock option plans)
The Board of Directors at its meeting held on 30 January 2019, approved an Employee Stock Options Scheme (''ESOS''). Pursuant to the scheme stock options up to a maximum of 0.17% of the then issued equity capital of the Company aggregating to 5,000,000 equity shares of the face value of H 10 each can be issued in a manner provided in the SEBI (Share Based Employee Benefits) Regulations, 2014 as amended. The shareholders of the Company vide their special resolution passed through postal ballot on 11 March 2019 approved the issue of equity shares of the Company under one or more Employee Stock Option Scheme(s).
The Nomination and Remuneration Committee of the Company has approved the following grants to select senior level executives of the Company in accordance with the Stock Option Scheme. The details of grants made as of 31 March 2022 are given in below tables:
44 Estimation of uncertainties relating to COVID-19
The Company has considered the possible effects that may result from the global health pandemic relating to COVID-19 on its operations. In developing the assumptions relating to the possible future uncertainties in the economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements has used internal sources of information and market based intelligence to arrive at its estimates.
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 âThe 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. Information in this regard is on basis of intimation received, on requests made by the Company, with regards to registration of vendors under the said Act.
a. There have been no events after the reporting date that require disclosure in these financial statements.
b. Amounts less than H 50,000 have been shown at actual against respective line items statutorily required to be disclosed.
c. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
d. The Company has performed the assessment to identify transactions with struck off companies as at 31 March 2022 and identified one company with which the transaction value is below rounding off norms adopted by the Company (refund of deposit).
e. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
f. The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person.
g. No funds have been advanced or loaned or invested either from borrowed funds or share premium or any other sources or kind of funds by the Company to or in any other person or entity, including foreign entities (âIntermediaries''), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
h. No funds have been received by the Company from any person or entity, including foreign entities (âFunding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Mar 31, 2021
Estimation of fair value
The best evidence of fair value is current prices in an active market for similar properties. Since investment properties leased out by the Company are cancellable and non-canceffabfe leases, the market rate for sale/purchase of such premises are representative of fair values. Company''s investment properties are at a location where active market is available for similar kind of properties. Hence, fair value is ascertained on the basis of market rates prevailing for similar properties in those location determined by an independent registered valuer and consequently classified as a level 2 valuation.
Notes to Investments
1 Investments made by the Company other than those with a maturity of less than one year, are intended to be held for long-term. On an assessment of the expected credit loss due to significant changes in risk profile, no material provisions are required to be made.
2 In absence of an active market and non availability of quotes on a recognised stock exchange, investment in fixed maturity plans and fixed term plans though listed on recognised stock exchanges are disclosed as unquoted. Other mutual funds, though unlisted, are quoted on recognised stock exchanges at their previous day NAVs which is the quote for the day.
3 Refer note 1 (6) for accounting policy on investments and note 32 for credit risk management related to investments.
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of H 10 per share. Each holder of equity shares is entitled to one vote per share. The interim dividend declared by the Board of Directors; and the final dividend proposed by the Board of Directors and approved by the shareholders in the annual general meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares wilt be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
General reserve
General reserve is free reserve available for distribution as recommended by Board in accordance with requirements of the Companies Act, 2013. Mandatory transfer to general reserve is not required under the Companies Act, 2013.
Retained earnings
Retained earnings is a free reserve. This is the accumulated profit earned by the Company till date, less transfer to general reserve, dividend (including dividend distribution tax) and other distributions made to the shareholders.
Cash flow hedging reserve and Costs of hedging reserve
It represents the effective portion of the fair value of forward/option contracts designated as cashflow hedge.
FVTOCI reserve
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI reserve within equity.
Share based payment reserve
Share based payment reserve is created as required by Ind AS 102 âShare Based Payments'' on the employee stock option scheme operated by the Company for its employees.
Treasury shares
The reserve for shares of the Company held by the Bajaj Auto ESOP Trust (ESOP Trust). Company has issued employees stock option scheme for its employees. The equity shares of the Company have been purchased and held by ESOP Trust. Trust to issue and allot to employees at the time of exercise of option by employees.
ii) Fair value hierarchy
This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets. Quotes would include rates/values/valuation references published periodically by BSE, NSE etc. basis which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds, as the case may be, that have quoted price/rate/value.
Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximise the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
Valuation techniques used to determine fair value
Valuation techniques used to determine fair value include
⢠Open ended mutual funds at NAV''s/rates declared and/or quoted
⢠Derivative Instruments at values determined by counter parties/banks using market observable data
The Company''s activities expose it to credit risk, liquidity risk and market risk (including foreign exchange risk). In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments such as foreign exchange forward contracts and foreign currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
The Board of Directors provide guiding principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of available funds. The Company''s risk management is carried out by a treasury department as per such policies approved by the Board of Directors. Accordingly, Company''s treasury department identifies, evaluates and hedges financial risks.
A) Credit risk
Credit risk refers to the risk that a counterparty may default on its contractual obligations leading to a financial loss to the Company. Credit risk primarily arises from cash and cash equivalents, derivative financial instruments, financial assets measured at amortised cost, financial assets measured at fair value through profit or loss and trade receivables. None of the financial instruments of the Company result in material concentration of credit risk.
Credit risk management
For Derivative instruments exposures are extended with multiple banks holding high credit risk ratings.
In regard to Trade receivables, which are typically unsecured, credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom credit is extended in the normal course of business. The Company follows a âsimplified approach'' for recognition of impairment loss allowance on trade receivables. Accordingly, impairment loss allowance is recognised based on lifetime expected credit losses at each reporting date, right from its initial recognition. The provision rates are based on days past due; and the calculation reflects the probability weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.
For other financial assets, the Company has an investment policy which allows the Company to invest only with counterparties having a credit rating equal to or above AA and A1 . The Company reviews the creditworthiness of these counterparties on an on-going basis. Counter party limits maybe updated as and when required, subject to approval of Board of Directors.
B) Liquidity risk
The Company''s principal source of liquidity are âcash and cash equivalents'' and cash flows that are generated from operations.
The Company believes that its working capital is sufficient to meet the financial liabilities within maturity period. The Company has no outstanding term borrowings except sales tax deferral liability amounting to H 121.46 crore which are interest free and are repayable after 12 years from the Balance Sheet date. Additionally, the Company has invested its surplus funds in fixed income securities or instruments of similar profile thereby ensuring safety of capital and availability of liquidity as and when required. Hence the Company carries a negligible liquidity risk.
(i) Foreign currency risk
The Company has significant exports and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD. Foreign exchange risk arises from highly probable forecast transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through sensitivity analysis. The primary objective for forex hedging against anticipated foreign currency risks will be to hedge the Company''s highly probable foreign currency cash flows arising from such transactions (thus reducing volatility of cash flow and profit).
The Company''s risk management policy permits the use of plain foreign exchange forward contracts and foreign currency option contracts including Foreign Currency - INR Option Cost Reduction Structures to hedge forecasted sales.
The Company also imports certain materials the value of which is not material as compared to value of exports. Currently, Company does not hedge this exposure. Nevertheless, Company may wish to hedge such exposures.
The Company uses a combination of foreign currency option contracts and foreign exchange forward contracts to hedge its exposure in foreign currency risk. The Company designates forward contracts in entirety and intrinsic value of foreign currency option contracts as the hedging instrument. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised through other comprehensive income in the âCash flow hedging reserve'' within equity. The change in time value that relate to the hedged item (aligned time value) is recognised through other comprehensive income in âCosts of hedging reserve'' within equity. Amount recognised in equity is reclassified to profit or loss when the hedged item (i.e. forecasted export sales) affects Statement of Profit and Loss. The ineffective portion of change in fair value of the hedging instrument and any residual time value (the non-aligned portion), if any, is recognised in the Statement of Profit and Loss immediately.
The intrinsic value of foreign exchange option contracts is determined with reference to the relevant spot market exchange rate. The differential between the contracted strike rate and the spot market exchange rate is defined as the intrinsic value. Time value of the option is the difference between fair value of the option and the intrinsic value.
The Company has deployed its surplus funds into various financial instruments including units of mutual funds, bonds, fixed maturity plans etc. The Company is exposed to price risk on such investments, which arises on account of movement in interest rates, liquidity and credit quality of underlying securities.
The Company has invested its surplus funds primarily in debt based mutual funds and fixed maturity plans. The value of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis. The Company has not performed a sensitivity analysis on these mutual funds based on estimated fluctuations in their NAV as in Management''s opinion, such analysis would not display a correct picture.
a) Objectives, policies and processes of capital management
The Company is cash surplus and has no capital other than Equity. The Company is not exposed to any regulatory imposed capital requirements.
The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with the guidelines set out by the Management. Safety of capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds.
Segment information based on consolidated financial statements is given in note 35 to consolidated financial statements, which are attached to these financial statements.
The Company''s Core Management Committee (CMC), examines the Group''s performance both from a product and geographical perspective and has identified two reportable operative business segments. The Group''s significant source of risk and rewards are derived from Automotive business and Investments, the performance of which is reviewed by the committee on a periodic basis and hence considered as individual operative segments.
The business segments comprise the following:
i. Automotive
ii. Investments i i i . Others
Funding arrangement and policy
The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.
The trustees of the plan have outsourced the investment management of the fund to insurance companies. The insurance companies in turn manage these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations.
There is no compulsion on the part of the Company to fully pre fund the liability of the plan. The Company''s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The expected contribution payable to the plan next year is H 50 crore.
41 Share based payments (Employee stock option plans)
The Board of Directors at its meeting held on 30 January 2019, approved an Employee Stock Options Scheme (''ESOS''). Pursuant to the scheme stock options up to a maximum of 0.17% of the then issued equity capital of the Company aggregating to 5,000,000 equity shares of the face value of H 10 each can be issued in a manner provided in the SEBI (Share Based Employee Benefits) Regulations, 2014 as amended. The shareholders of the Company vide their special resolution passed through postal ballot on 11 March 2019 approved the issue of equity shares of the Company under one or more Employee Stock Option Scheme(s).
For the year ended 31 March 2021, the Company has accounted expense of H 6.90 crore as employee benefit expenses (See note 24) on the aforesaid employee stock option plan (Previous year H 10.01 crore). The balance in employee stock option outstanding account is H 16.91 crore as of 31 March 2021 (Previous year H 10.01 crore).
42 Estimation of uncertainties relating to COVID-19
The Company has considered the possible effects that may result from the global health pandemic relating to COVID-19 on its operations. In developing the assumptions relating to the possible future uncertainties in the economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements has used internal sources of information and market based intelligence to arrive at its estimates.
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 âThe 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. Information in this regard is on basis of intimation received, on requests made by the Company, with regards to registration of vendors under the said Act.
a. There have been no events after the reporting date that require disclosure in these financial statements.
b. Amounts less than H 50,000 have been shown at actual against respective line items statutorily required to be disclosed.
Mar 31, 2019
38 Disclosure of transactions with related parties as required by the Indian Accounting Standard 24
( Rs In Crore)
|
Name of related party and nature of relationship |
Nature of transaction |
2018-19 |
2017-18 |
||
|
Transaction value |
Outstanding amounts carried in Balance Sheet |
Transaction value |
Outstanding amounts carried in Balance Sheet |
||
|
A Subsidiaries: |
|||||
|
PT.Bajaj Auto Indonesia (99.25% shares held by Bajaj Auto Ltd.) |
Contrbuton to eguty (411,875 shares of USD 3 each) |
- |
6.17 |
- |
6.17 |
|
Provision for diminution in value of investment |
- |
(2.17) |
- |
(2.17) |
|
|
Write-down of investment |
- |
- |
199.41 |
- |
|
|
Provision for diminution written-back |
- |
- |
199.41 |
- |
|
|
Bajaj Auto hternat onal Holdings BV Amsterdam Netherlands (Fully owned subsidiary) |
Contr but on to eguity (1,980,000 shares of Euro 100 each) |
- |
1,218.72 |
- |
1,218.72 |
|
Dividend received |
94.36 |
- |
135.07 |
- |
|
|
B Associates, joint ventures and investing parties: |
|||||
|
Bajaj Holdings & Investment Ltd. (Investing party-holds 33.43% shares of Bajaj Auto Ltd.) |
Purchase of shares by BHIL [96,727,050 shares (Previous year 91,280,000) of Rs 10 each] |
- |
(96.73) |
- |
(91.28) |
|
Purchase of shares by BAL [2,910,050 shares of Rs 10 each] |
- |
909.91 |
- |
- |
|
|
Dividend paid |
547.68 |
- |
502.04 |
- |
|
|
Business support service received |
1.98 |
- |
1.55 |
- |
|
|
Business support service rendered |
12.52 |
- |
15.26 |
- |
|
|
C Key management personnel and their relatives: |
|||||
|
Rahul Bajaj (Chairman) |
Short-term employee benefits (including Commission) |
10.63 |
(6.75) |
10.79 |
(6.75) |
|
Post-employment benefits |
0.80 |
- |
0.80 |
- |
|
|
Rent paid for premises |
0.20 |
- |
0.17 |
- |
|
|
Deposit paid against premises taken on lease |
0.90 |
3.60 |
- |
2.70 |
|
|
Rajiv Bajaj (Managing Director) |
Short-term employee benefits (including Commission) |
29.95 |
(20.02) |
26.27 |
(17.41) |
|
Post-employment benefits |
2.36 |
- |
2.05 |
- |
|
|
Rent paid for premises |
1.99 |
- |
1.98 |
- |
|
|
Deposit paid against premises taken on lease |
0.90 |
1.92 |
- |
2.82 |
|
|
Pradeep Shrivastava (Executive Director) |
Short-term employee benefits |
6.05 |
- |
3.78 |
- |
|
Post-employment benefits |
0.61 |
- |
0.43 |
- |
|
|
Rakesh Sharma (Executive Director) |
Short-term employee benefits |
4.99 |
- |
3.61 |
- |
|
Post-employment benefits |
0.49 |
- |
0.44 |
- |
|
|
Madhur Bajaj (Vice Chairman) |
Rent paid for premises |
0.27 |
- |
0.05 |
- |
|
Deposit paid against premises taken on lease |
3.52 |
4.40 |
- |
0.88 |
|
|
Sitting fees |
0.08 |
- |
0.08 |
- |
|
|
Commission |
0.12 |
(0.12) |
0.12 |
(0.12) |
|
|
Sanjiv Bajaj |
Sitting fees |
0.08 |
- |
0.08 |
- |
|
Commission |
0.12 |
(0.12) |
0.12 |
(0.12) |
|
|
Shekhar Bajaj |
Sitting fees |
0.06 |
- |
0.07 |
- |
|
Commission |
0.09 |
(0.09) |
0.11 |
(0.11) |
|
|
Rent paid for premises |
- |
- |
0.16 |
- |
|
|
Deposit paid against premises taken on lease |
2.64 |
- |
- |
2.64 |
|
|
Niraj Bajaj |
Sitting Fees |
0.08 |
- |
0.08 |
- |
|
Commission |
0.12 |
(0.12) |
0.12 |
(0.12) |
|
|
Rent paid for premises |
- |
- |
0.05 |
- |
|
|
Deposit paid against premises taken on lease |
0.88 |
- |
- |
0.88 |
|
38 Disclosure of transactions with related parties as required by the Indian Accountinq Standard 24 (Contd.)
( Rs In Crore)
|
Name of related party and nature of relationship |
Nature of transaction |
2018-19 |
2017-18 |
||
|
Transaction value |
Outstanding amounts carried in Balance Sheet |
Transaction value |
Outstanding amounts carried in Balance Sheet |
||
|
D Other entities/persons: |
|||||
|
Bajaj Finserv Ltd. |
Purchase of windpower |
13,82 |
- |
7,68 |
- |
|
Business support service rendered |
0,41 |
- |
0,30 |
- |
|
|
Bajaj Finance Ltd |
Purchase of shares by BFL (150 shares of Rs 10 each) - Rs 1,500 |
- |
- |
||
|
Subvention charges paid |
9,88 |
0,86 |
23,78 |
(1,91) |
|
|
Service rendered |
25,68 |
- |
26,55 |
0,78 |
|
|
Service received |
0,20 |
- |
0,51 |
- |
|
|
Security deposit received |
- |
(0,21) |
- |
(0,21) |
|
|
Dividend paid ( Rs 9, 000, previous year- Rs 8,250) |
|||||
|
Bajaj Allianz General Insurance Co, Ltd |
hsurance premiums paid |
15,89 |
4,68 |
10,98 |
4,21 |
|
Claims received |
0,01 |
- |
- |
- |
|
|
Bajaj AUianz Life Insurance Co, Ltd |
hsurance premiums paid |
1,16 |
- |
1,01 |
(0,01) |
|
Purchase of shares by BALIC (125,000 shares of Rs 10 each) |
- |
(0,13) |
- |
(0,13) |
|
|
Dividend paid |
0,75 |
- |
0,69 |
- |
|
|
Bajaj Housing Finance Ltd |
Services rendered |
0,01 |
- |
- |
- |
|
Security deposit received |
0,02 |
(0,02) |
- |
- |
|
|
Bajaj Electricals Ltd, |
Purchases |
0,05 |
(0,25) |
0,55 |
(0,22) |
|
Hind Musafir Agency Ltd |
Services received |
20,71 |
(1.06) |
18,66 |
(1.46) |
|
Hindustan Housing Co, Ltd |
Maintenance charges paid |
0,26 |
(0,07) |
0,20 |
- |
|
KTM AC |
Sale of vehicles and material |
414,62 |
(46,42) |
405,86 |
(4.38) |
|
Services rendered and other debits |
0,16 |
- |
- |
- |
|
|
Purchase of accessories and other credits |
2,65 |
- |
1,51 |
- |
|
|
KTM Sportmotorcycle GmbH |
Sale of vehicles and material |
382,62 |
(149,06) |
425,64 |
(11.03) |
|
Royalty paid and payable |
13,99 |
(3,27) |
9,48 |
(2.05) |
|
|
Services rendered and other debits |
0,08 |
- |
0,23 |
- |
|
|
Purchase of accessories and other credits |
5,03 |
- |
0,12 |
- |
|
|
KTM Southeast Europe A, E, |
Sale of vehicles and material ( Rs 13,506, previous year - Rs 13,506) |
0,44 |
0,43 |
||
|
KTM Southeast Europe S, A, |
Sale of vehicles and material ( Rs 19,151 , previous year - Rs 12,955) |
- |
0,41 |
||
|
KTM Sportmotorcycle India Pvt, Ltd, |
Royalty paid and payable |
8,05 |
(0,56) |
9,21 |
(1.74) |
|
Services rendered and other debits |
2,25 |
- |
2,35 |
- |
|
|
Maharashtra Scooters Ltd |
Purchase of shares by MSL (6,774,072 shares of Rs 10 each) |
- |
(6,77) |
- |
(6.77) |
|
Dividend paid |
40,64 |
- |
37,26 |
- |
|
|
Purchases |
0,31 |
- |
0,16 |
- |
|
|
Sales (including capital asset) |
- |
- |
0,33 |
- |
|
|
Services rendered |
0,12 |
(0,04) |
0,10 |
0.04 |
|
|
Mukand Ltd |
Purchases |
- |
- |
0,03 |
- |
|
CERG Advisory Pvt, Ltd |
Services received |
0,10 |
- |
0,09 |
- |
|
Bajaj Auto Charitable Trust |
CSR payment |
0,25 |
- |
- |
- |
|
Bajaj Auto Employees Group Gratuity Fund |
Gratuity contribution |
61,50 |
- |
0,50 |
- |
|
Bajaj Auto Senior Staff Group Gratuity Fund |
Gratuity contribution |
74,50 |
- |
16,05 |
- |
|
Bajaj Auto Employees Superannuation Fund |
Superannuation contribution |
9,46 |
(0,20) |
9,07 |
1.00 |
|
Bajaj Auto Limited Provident Fund |
Provident fund contribution (Employer''s share) |
34,08 |
(10,05) |
28,48 |
(9.35) |
38 Disclosure of transactions with related parties as required by the Indian Accounting Standard 24 (Contd.)
( Rs In Crore)
|
Name of related party and nature of relationship |
Nature of transaction |
2018-19 |
2017-18 |
||
|
Transaction value |
Outstanding amounts carried in Balance Sheet |
Transaction value |
Outstanding amounts carried in Balance Sheet |
||
|
D J Balaji Rao |
Sitting fees |
0.18 |
- |
0.15 |
- |
|
Commission |
0.27 |
(0.27) |
0.23 |
(0.23) |
|
|
D S Mehta |
Sitting fees |
0.04 |
- |
0.06 |
- |
|
Commission |
0.06 |
(0.06) |
0.09 |
(0.09) |
|
|
Naresh Chandra |
Sitting fees |
- |
- |
0.03 |
- |
|
Commission |
- |
- |
0.05 |
(0.05) |
|
|
Nanoo Pamnan |
Sitting fees |
0.13 |
- |
0.11 |
- |
|
Commission |
0.50 |
(0.50) |
0.37 |
(0.37) |
|
|
Manish Kejriwal |
Sitting fees |
0.04 |
- |
0.07 |
- |
|
Commission |
0.06 |
(0.06) |
0.11 |
(0.11) |
|
|
P Murar |
Sitting fees |
0.04 |
- |
0.03 |
- |
|
Commission |
0.06 |
(0.06) |
0.05 |
(0.05) |
|
|
Dr. Gita Piramal |
Sitting fees |
0.17 |
- |
0.15 |
- |
|
Commission |
0.26 |
(0.26) |
0.23 |
(0.23) |
|
|
Naushad D Forbes |
Sitting fees |
0.15 |
- |
0.09 |
- |
|
Commission |
0.23 |
(0.23) |
0.14 |
(0.14) |
|
|
Omkar Goswam |
Sitting fees |
0.08 |
- |
0.08 |
- |
|
Commission |
0.12 |
(0.12) |
0.12 |
(0.12) |
|
|
Anam Roy |
Sitting fees |
0.08 |
- |
0.06 |
- |
|
Commission |
0.12 |
(0.12) |
0.09 |
(0.09) |
|
Name of the related party and nature of the related party relationship where control exists have been disclosed irrespective of whether or not there have been transactions between the related parties. In other cases, disclosure has been made only when there have been transactions with those parties.
F , as defined under clause 9 of the Indian Accounting Standard -24 ''Related Party Disclosures'' have been identified based on representations made by key managerial personnel and information available with the Company.
All above transactions are in the ordinary course of business and on arms'' length basis. All outstanding balances are unsecured and are repayable in cash.
39 Lease
As a lessor:
The Company has given premises on operating leases. These lease arrangements range for a period between eleven months to ten years and include both cancellable and non cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.
The total future minimum lease rentals receivable at the Balance Sheet date is as under:
As a lessee:
The Company has operating leases for premises. These lease arrangements range for a period between one to ninety years which include both cancellable and non cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.
The total future minimum lease rentals payable at the Balance Sheet date is as under:
(Rs In Crore)
As at 31 March Particulars 2019 2018
Payable Within one year 11.23 11.28
After one year but not more than five years 16.85 19.21
More than five years 14.25 15.07 42.33 45.56
40 Expenditure incurred on Research and Development
(Rs In Crore)
For the year ended 31 March Particulars 2019 2018
a Revenue expenditure - charged to Statement of Profit and Loss 392.35 334.11
b Revenue expenditure - capitalised 20.78 13.78
c Capital expenditure - excluding building 43.22 24.80 d Capital expenditure - building 456.35 372.69
(Rs In Crore)
|
Particulars |
As at 31 March |
|
|
2019 |
2018 |
|
|
Receivable |
||
|
Within one year |
24.27 |
23.93 |
|
After one year but not more than five years |
40.52 |
62.98 |
|
More than five years |
1.12 |
- |
|
65.91 |
86.91 |
|
41 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. Information in this regard is on basis of intimation received, on requests made by the Company, with regards to registration of vendors under the said Act.
42 Post the applicability of GST with effect from 1 July 201 7, Revenue from operations (i.e. Sales) are required to be disclosed net of GST. Sales before this date are disclosed as gross of excise duty. Accordingly, Revenue from operations for the current year is not comparable with the previous year.
43 During previous year, the Company has written-off its investment in PT Bajaj Auto Indonesia, to the extent of Rs 199.41 crore (USD 39.95 million), consequential to a share capital reduction effected in PT Bajaj Auto Indonesia to the same extent.
The transaction has been approved by the Reserve Bank of India vide its letter dtd. 22 March 2018. Accordingly, the Company has reversed an amount of Rs 199.41 crore from provision for diminution in the value of investments to the Statement of Profit and Loss for the previous year ended 31 March 2018.
44 Standards issued but not yet effective
The amendments to standards that are issued, but not yet effective, upto the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 201 9 and Companies (Indian Accounting Standards) Second Amendment Rules, 201 9 introducing/amending the following standards:
Ind AS 116 Leases
Ind AS 116 Leases was notified in March 2019 and it replaces Ind AS 1 7 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ''low-value1 assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 1 2 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.
Lessor accounting under Ind AS 116 is substantially unchanged from today''s accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases.
The Company intends to adopt these standards, if applicable, when they become effective. As the Company does not have any material leases, the adoption of this standard is not likely to have a material impact in its Standalone Financial Statements. Based on an assessment done by the Company, its right to use assets & financial liabilities are expected to increase by approx. Rs 30 crore with nominal impact in reserves.
Appendix C to Ind AS 12 Uncertainty over Income Tax Treatment
The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of Ind AS 12 and does not apply to taxes or levies outside the scope of Ind AS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:
⢠Whether an entity considers uncertain tax treatments separately
⢠The assumptions an entity makes about the examination of tax treatments by taxation authorities
⢠How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates
⢠How an entity considers changes in facts and circumstances
An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. In determining the approach that better predicts the resolution of the uncertainty, an entity might consider, for example, (a) how it prepares its income tax filings and supports tax treatments; or (b) how the entity expects the taxation authority to make its examination and resolve issues that might arise from that examination.
The interpretation is effective for annual reporting periods beginning on or after 1 April 2019, but certain transition reliefs are available. The Company will apply the interpretation from its effective date. Based on the Company''s preliminary evaluation, these amendments have no impact on the financial statements of the Company.
Amendments to Ind AS 109: Prepayment Features with Negative Compensation
Under Ind AS 109, a debt instrument can be measured at amortised cost or at fair value through other comprehensive income, provided that the contractual cash flows are ''solely payments of principal and interest on the principal amount outstanding'' (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to Ind AS 109 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract.
The amendments should be applied retrospectively and are effective for annual periods beginning on or after 1 April 2019. These amendments have no impact on the financial statements of the Company.
Amendments to Ind AS 19: Plan Amendment, Curtailment or Settlement
The amendments to Ind AS 19 addresses the accounting when a plan amendment, curtailment or settlement occurs during a reporting period. The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to:
⢠Determine current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability/fasset) reflecting the benefits offered under the plan and the plan assets after that event.
⢠Determine net interest for the remainder of the period after the plan amendment, curtailment or settlement using: the net defined benefit liability/fasset) reflecting the benefits offered under the plan and the plan assets after that event; and the discount rate used to remeasure that net defined benefit liability/fasset).
The amendments also clarify that an entity first determines any past service cost, or a gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognised in profit or loss.
An entity then determines the effect of the asset ceiling after the plan amendment, curtailment or settlement. Any change in that effect, excluding amounts included in the net interest, is recognised in other comprehensive income.
The amendments apply to plan amendments, curtailments, or settlements occurring on or after the beginning of the first annual reporting period that begins on or after 1 April 2019. These amendments will apply only to any future plan amendments, curtailments, or settlements of the Company.
Annual improvement to Ind AS (2018);
These improvements include: Amendments to Ind AS 12: Income Taxes
The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.
An entity applies those amendments for annual reporting periods beginning on or after 1 April 2019. Since the Company''s current practice is in line with these amendments, the Company does not expect any effect on its consolidated financial statements.
Amendments to Ind AS 23: Borrowing Costs
The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete.
An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after 1 April 2019. Since the Company''s current practice is in line with these amendments, the Company does not expect any effect on its consolidated financial statements.
45 Miscellaneous
Amounts less than ? 50,000 have been shown at actual against respective line items statutorily required to be disclosed.
|
As per our report of even date |
On behalf of the Board of Directors |
|
|
For S R B C & CO LLP |
Rahul Bajaj |
|
|
Chartered Accountants |
Chairman |
|
|
ICAI Firm Registration Number: 324982E/E300003 |
||
|
Kevin D''sa |
Rajiv Bajaj |
|
|
per Arvind Sethi |
Chief Financial Officer |
Managing Director |
|
Partner |
||
|
Membership Number: 89802 |
Dr. J Sridhar |
Nanoo Pamnani |
|
Pune: 17 May 2019 |
Company Secretary |
Chairman - Audit Committee |
Mar 31, 2018
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company has set policies and procedures for both recurring and non-recurring fair value measurement of financial assets, which includes valuation techniques and inputs to use for each case.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
- Disclosures for valuation methods, significant estimates and assumptions (note 1 clause 1)
- Quantitative disclosures of fair value measurement hierarchy (note 31)
- Investment properties (note 3)
- Financial instruments (including those carried at amortized cost) (note 31)
C) Market risk Foreign currency risk
The Company has significant exports and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US$. Foreign exchange risk arises from highly probable forecast transactions and recognized assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through sensitivity analysis. The primary objective for forex hedging against anticipated foreign currency risks will be to hedge the Company''s highly probable foreign currency cash flows arising from such transactions (thus reducing cash flow and profit volatility).
The Company''s risk management policy permits the use of plain foreign exchange forward contracts and foreign currency option contracts including Foreign Currency - INR Option Cost Reduction Structures to hedge forecasted sales.
The Company also imports certain materials the value of which is not material as compared to value of exports.
Currently, Company does not hedge this exposure. Nevertheless, Company may wish to hedge such exposures.
The Company uses a combination of foreign currency option contracts and foreign exchange forward contracts to hedge its exposure in foreign currency risk. The Company designates forward contracts in entirety and intrinsic value of foreign currency option contracts as the hedging instrument. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognized through other comprehensive income in the ''Cash flow hedging reserve'' within equity. The change in time value that relate to the hedged item (aligned time value) is recognized through other comprehensive income in ''Costs of hedging reserve'' within equity. Amount recognized in equity is reclassified to profit or loss when the hedged item (i.e. forecasted export sales) affects Statement of Profit or Loss. The ineffective portion of change in fair value of the hedging instrument and any residual time value (the non-aligned portion), if any, is recognized in the Statement of Profit and Loss immediately.
The intrinsic value of foreign exchange option contracts is determined with reference to the relevant spot market exchange rate. The differential between the contracted strike rate and the spot market exchange rate is defined as the intrinsic value. Time value of the option is the difference between fair value of the option and the intrinsic value.
a) Objectives, policies and processes of capital management
The Company is cash surplus and has no capital other than Equity. The Company is not exposed to any regulatory imposed capital requirements.
The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with the guidelines set out by the Management. Safety of capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds.
The Company does not have any borrowings and does not borrow funds unless circumstances require.
Sensitivity Analysis
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.
These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.
Funding arrangement and policy
The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.
The trustees of the plan have outsourced the investment management of the fund to insurance companies. The insurance companies in turn manage these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations.
There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company''s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.
The expected contribution payable to the plan next year is H 90 crore.
1 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. Information in this regard is on basis of intimation received, on requests made by the Company, with regards to registration of vendors under the said Act.
2 The Company had entered into an arrangement with a consortium of banks on 26 July 2008. Accordingly, first charge was created on all current assets of the Company to the extent of Rs, 430 crore. Current assets include stocks of raw materials, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), book debts not older than 90 days pertaining to Company''s plants located anywhere in India.
Company had passed the resolution dated 27 July 2016 for dismantling of consortium. Accordingly, discharge letters for clearance were filed with all banks last year. Company received clearance certificate from all the banks and finally got the charge satisfied on 27 September 2017 with ROC.
3 During the year, the Company has written-off its investment in PT. Bajaj Auto Indonesia, to the extent of Rs, 199.41 crore (USD 39.95 million), consequential to a share capital reduction effected in PT. Bajaj Auto Indonesia to the same extent.
The transaction has been approved by the Reserve Bank of India vide its letter dtd. 22 March 2018. Accordingly, the Company has reversed an amount of Rs, 199.41 crore from provision for diminution in the value of investments to the Statement of Profit and Loss for the year.
4 Standards issued but not yet effective
The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 introducing/amending the following standards:
Ind AS 115 Revenue from Contracts with Customers
Ind AS 115 was issued on 29 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 April 2018. The Company plans to adopt the new standard on the required effective date using the modified retrospective method. The Company performed a detailed assessment of Ind AS 115 to determine the impact in its financial statements.
Based on the assessment, the application of Ind AS 115 is not expected to have any major impact on the Company''s profitability, liquidity and capital resources or financial position as on 31 March 2018.
Amendments to Ind 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112
The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10-B16, apply to an entity''s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal Company that is classified) as held for sale.
Based on the Company''s evaluation, these amendments do not affect the Company''s financial statements.
Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses
The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.
5 Standards issued but not yet effective (Contd.)
Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognized in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.
These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not expected to have any impact on the Company.
Transfers of Investment Property - Amendments to Ind AS 40
The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management''s intentions for the use of a property does not provide evidence of a change in use.
Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.
The amendments are effective for annual periods beginning on or after 1 April 2018. The Company will apply amendments when they become effective. However, since Company''s current practice is in line with the clarifications issued, the Company does not expect any effect on its financial statements.
Ind AS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice
The amendments clarify that:
- An entity that is a venture capital organization, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.
- If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate''s or joint venture''s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognized; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.
The amendments should be applied retrospectively and are effective from 1 April 2018. These amendments are not applicable to the Company.
Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration
The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.
Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognized on or after:
(i) The beginning of the reporting period in which the entity first applies the Appendix, or
(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.
The Appendix is effective for annual periods beginning on or after 1 April 2018. However, since the Company''s current practice is in line with the Interpretation, the Company does not expect any effect on its financial statements.
6 Miscellaneous
a. Post the applicability of GST with effect from 1 July 2017, Revenue from operations (i.e. Sales) are required to be disclosed
net of GST. Sales before this date are disclosed as gross of excise duty. Accordingly, Revenue from operations for the current year is not comparable with the previous year.
b. Rs, 1 crore is equal to Rs, 10 million.
c. Amounts less than Rs, 50,000 have been shown at actual against respective line items statutorily required to be disclosed.
Mar 31, 2017
Notes to Investments
1 Investments made by the Company other than those with a maturity of less than one year, are intended to be held for long-term. On an assessment of the expected credit loss due to significant changes in risk profile, no material provisions are required to be made.
2 In absence of an active market and non availability of quotes on recognized stock exchange, investment in fixed maturity plans and fixed term plans though listed on recognized stock exchange are disclosed as unquoted. Other mutual funds, though unlisted, are quoted on recognized stock exchanges at their previous day NAVs which is the quote for the day.
3 Refer note 1C (6) for accounting policy and valuation principles for investments and note 31 for credit risk management related to investments.
Level 4: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets. Quotes would include rates/values/valuation references published periodically by BSE, NSE etc. basis which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds, as the case may be, that have quoted price/rate/value.
Level 5: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximize the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 6: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
Valuation Techniques used to determine fair value Valuation Techniques used to determine fair value include
- Open ended mutual funds and certain bonds and debentures at NAV''s/rates declared and/or quoted
- Close ended mutual funds at NAV''s declared by AMFI
- For other bonds and debentures values with references to prevailing yields to maturity matching tenures, quoted on sites of credible organization such as FIMMDA (Fixed Income Money Market and Derivative Association of India)
- Derivative Instruments at values determined by counter parties/Banks using market observable data.
- Commercial papers and certificate of deposits, being short term maturity papers, amortized cost is assumed to be the fair value
The Board provides guiding principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of surplus liquidity. The Company''s risk management is carried out by a treasury department as per the policies approved by the Board of Directors. Accordingly, Company''s treasury identifies, evaluates and hedges financial risks.
A) Credit risk
Credit risk arises from cash and cash equivalents, derivative financial instruments, financial assets measured at amortized cost and fair value through profit or loss and trade receivables.
Credit Risk Management
For Derivative instruments exposures are extended with multiple banks holding high credit risk ratings.
For other financial assets the Company has an investment policy which allows the Company to invest only with counterparties having credit rating equal to or above AA and P1 . The company reviews the creditworthiness of these counterparties on an ongoing basis. Another source of credit risk at the reporting date is from trade receivables as these are typically unsecured. This credit risk has always been managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to whom credit is extended in the normal course of business. The Company estimates the expected credit loss on the basis of past data and experience. Expected credit losses of financial assets receivable in the next 12 months are estimated on the basis of historical data provided the Company has reasonable and supportable data. On such an assessment the expected losses are nil or negligible, as evidenced in the table below, and hence no further provision than that already made is considered necessary.
Review of outstanding trade receivables and financial assets is carried out by Management at every month end. Company has a practice to provide for doubtful debts on a case to case basis after considering inter-alia customer''s credibility etc. Provision is made in the books generally, for all outstanding trade receivables which are outstanding for more than 180 days from their due date, if they are considered to be doubtful.
B) Liquidity Risk
The Company''s principal sources of liquidity are ''cash and cash equivalents'' and cash flows that are generated from operations. The Company has no outstanding term borrowings. The Company believes that its working capital is sufficient to meet its current requirements. Additionally, the Company has sizeable surplus funds invested in fixed income securities or instruments of similar profile ensuring safety of capital and availability of liquidity if and when required. Hence the Company does not perceive any liquidity risk.
C) Market risk Foreign currency risk
The Company operates, in addition to domestic markets, significantly in international markets through its exports and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US$. Foreign exchange risk arises from highly probable forecast transactions and recognized assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through sensitivity analysis. The primary objective for forex hedging against anticipated foreign currency risks will be to hedge the Company''s highly probable foreign currency cash flows arising from such transactions (thus reducing cash flow and profit volatility).
In order to minimize any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts, foreign currency option contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
The Company''s Risk Management Policy permits the use of plain foreign exchange forward contracts and foreign currency option contracts including Foreign Currency - INR Option Cost Reduction Structures to hedge forecasted sales.
The Company also imports certain materials the value of which is not material as compared to value of exports.
Currently, company does not hedge this exposure. Nevertheless, Company may wish to hedge such exposures.
The Company uses a combination of foreign exchange forward contracts and foreign currency option contracts to hedge its exposure in foreign currency risk. The Company designates forward contracts in entirety and intrinsic value of foreign currency option contracts as the hedging instrument. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognized through other comprehensive income in the ''Cash flow hedging reserve'' within equity. The change in time value that relate to the hedged item (aligned time value) is recognized through other comprehensive income in ''Costs of hedging reserve'' within equity. Amount recognized in equity is reclassified to profit or loss when the hedged item (i.e. forecasted export sales) affects Statement of Profit and Loss. The ineffective portion of change in fair value of the hedging instrument and any residual time value (the non-aligned portion), if any, is recognized in the Statement of Profit and Loss immediately.
The intrinsic value of foreign exchange option contracts is determined with reference to the relevant spot market exchange rate. The differential between the contracted strike rate and the spot market exchange rate is defined as the intrinsic value. Time value of the option is the difference between fair value of the option and the intrinsic value.
The fair values (Marked-to-market) of foreign currency derivative contracts outstanding as on 31 March 2017, 31 March 2016 and 1 April 2015 are as follows:
7. Capital management a) Risk management
The Company is cash surplus and has no capital other than Equity. The Company is not exposed to any regulatory imposed capital requirements.
The cash surpluses are currently invested in income generating debt instruments (including through mutual funds) and money market instruments depending on economic conditions in line with the guidelines set out by the Management. Safety of capital is of prime importance to ensure availability of capital for operations. Investment objective is to provide safety and adequate return on the surplus funds.
The Company does not have any borrowings and does not borrow funds unless circumstances require.
8. Segment information
Segment information based on consolidated financial statements is given in note 36 to consolidated financial statements, which are attached to these financial statements.
The Company''s Core Management Committee (CMC), examines the group''s performance both from a product and geographical perspective and has identified two reportable operative business segments. The group''s significant source of risk and rewards are derived from Automotive business and Investments, the performance of which is reviewed by the committee on a periodic basis and hence considered as individual operative segments.
The business segments comprise the following:
i. Automotive
ii. Investments
iii. Others
These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.
Funding arrangement and policy
The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.
The trustees of the plan have outsourced the investment management of the fund to insurance companies. The insurance companies in turn manage these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations.
There is no compulsion on the part of the Company to fully pre fund the liability of the plan. The Company''s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of underfunding of the plan.
The expected contribution payable to the plan next year is H 65 crore.
Projected plan cash flow
The table below shows the expected cash flow profile of the benefits to be paid to the current membership of the plan:
9. 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. Information in this regard is on basis of intimation received, on requests made by the Company, with regards to registration of vendors under the said Act.
10. The Company had entered into an arrangement with a consortium of banks on 26 July 2008. Accordingly, first charge was created on all current assets of the Company to the extent of RS, 430 crore. Current assets include stocks of raw materials, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), book debts not older than 90 days pertaining to Company''s plants located anywhere in India.
During the year, Company has passed the resolution dated 27 July 2016 for dismantling of consortium. Accordingly, discharge letters for clearance are filed with all banks and clearance is awaited as on date.
11. The consolidated financial statements of the Company along with its subsidiaries are attached to these standalone financial statements. The details of the group regarding the nature of relationship and the basis of consolidation can be referred to in note 1 to the said consolidated financial statements.
12. Miscellaneous
a. RS, 1 crore is equal to RS, 10 million.
b. Amounts less than Rs, 50,000 have been shown at actual against respective line items statutorily required to be disclosed.
Mar 31, 2015
Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. Pursuant to section 133 of the
Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules,
2014, till the standards of accounting or any addendum thereto are
prescribed by Central Government in consultation and recommendation of
the National Financial Reporting Authority, the existing Accounting
Standards notified under the Companies Act, 1956 shall continue to
apply. Consequently, these financial statements have been prepared to
comply in all material aspects with the Accounting Standards notified
under section 211(3C) of the Companies Act, 1956 [Companies (Accounting
Standards) Rules, 2006, as amended] and other relevant provisions of
the Companies Act, 2013.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Schedule III to the Companies Act, 2013. Based
on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current or non-current classification of
assets and liabilities.
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of B
10 per share. Each holder of equity shares is entitled to one vote per
share. The dividend proposed by the Board of Directors and approved by
the shareholders in the annual general meeting is paid in Indian
rupees. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
2 Derivative hedging instruments
The Company has adopted the accounting treatment and disclosures in
accordance with the principles laid down in Accounting Standards 30 and
32 on foreign currency derivative contracts.
The Company holds foreign currency derivative to hedge its foreign
currency exposure. Derivatives are initially recognised at fair value
on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The Company designates foreign
currency derivatives as hedges of foreign currency risk associated with
a highly probable forecast transaction (cash flow hedge).
The Company has entered into simple forward contracts and par forward
contracts to hedge highly probable forecast export transactions. These
instruments meet the Management''s foreign exchange risk management
objectives and also qualify for hedge accounting as per the principles
of hedge accounting. The market value of instruments outstanding at the
close of the year is a gain of Rs. 2.92 crore as against a gain of Rs. 1.95
crore in the previous year.
The Company has also entered into range forward contracts to hedge
highly probable forecast transactions, where the export realisations of
the Company are protected below a minimum pre-determined foreign
exchange rate whereas the realisation advantages are available to the
Company there from upto a higher pre-determined foreign exchange rate.
The Company does not benefit by rupee depreciating beyond the
pre-determined foreign exchange rate. These instruments meet the
Management''s foreign exchange risk management objectives and also
qualify for hedge accounting as per the principles of hedge accounting.
MTM gains/losses in respect of effective hedges is carried to the Hedge
reserve and ineffectiveness, if any, including the time value of option
contracts is recognised in the results, as per the principles of
Accounting Standard 30. The market value of instruments outstanding at
the close of the year indicate a gain aggregating to Rs. 53.22 crore as
against a gain of Rs. 71.76 crore in the previous year.
The time value of option contracts aggregating a net loss of Rs. 50.22
crore after reversals, (previous year net loss of Rs. 76.81 crore) has
been recognised as ''Other expenses''.
Risk Management Policy and other disclosures
The exports of the Company, presently constituting substantial portion
of the turnover, are at prices predetermined for each product in each
region. These prices are fixed in USD based on an assumed USD/INR rate.
(Budgeted rate of realisation).
Exports are then effected at such price and hence it is desirable for
the Company to shield itself from adverse movements in forex rates at a
future date.
The Company also imports raw materials and components for its
motorcycles etc. However, the value of such imports is not material as
compared to the value of exports. Nevertheless, the Company may wish to
secure its procurement prices in terms of INR to be able to forecast
its pricing and profitability. Consequently the Company may wish to
hedge such exposures, future and current, to achieve the aforesaid
objective.
The exchange rate between the Indian rupee and foreign currencies has
changed substantially in recent periods and may continue to fluctuate
substantially in the future. Consequently, the Company uses derivative
financial instruments, such as foreign exchange forward and option
contracts, to mitigate the risk of changes in foreign currency exchange
rates in respect of its forecasted cash flows and trade receivables.
The details in respect of the outstanding foreign exchange forward
contracts including range forward and par forward contracts are given
below. These contracts are due for maturity between one to twelve
months. The table below summarises the notional amounts (amounts of
contracts booked and outstanding) of foreign currency forward contracts
into relevant maturity groupings based on the remaining period as at
the 31 March 2015:
For import transactions: Rs.Nil
The fair value of forwards and foreign currency option contracts is
determined based on the appropriate valuation techniques as given by
the banks.
The cash flows from the hedges are expected to occur over the financial
year 2015-16 and will accordingly flow to the Statement of Profit and
Loss.
In respect of foreign currency derivative contracts designated as cash
flow hedges for par forward contracts, the Company has recorded a net
gain of Rs. 2.92 crore and Rs. 1.95 crore, as a component of equity (Hedge
reserve) as at 31 March 2015 and 2014 respectively and a net gain of Rs.
8.40 crore and a net loss of Rs. 13.53 crore as part of revenue during
the year ended 31 March 2015, and 2014 respectively and Rs. Nil (previous
year loss of Rs. 2.60 crore) to the Statement of Profit and Loss on a
break in the designation
In respect of foreign currency derivative contracts designated as cash
flow hedges for range forward contracts, the Company has recorded a net
gain of Rs. 182.32 crore and Rs. 150.65 crore, as a component of equity
(Hedge reserve) as at 31 March 2015 and 2014 respectively and a net
gain of Rs. 85.10 crore and a net loss of Rs. 114.35 crore as part of
revenue during the year ended 31 March 2015 and 2014 respectively and B
Nil (previous year gain of Rs. 0.49 crore) to the Statement of Profit and
Loss on a break in the designation of the hedge.
Amount that was removed from appropriate equity account (Hedge reserve
account) during the year ended 2015 and 2014 in respect of forecast
transaction for which hedge accounting had previously been used, but
which is no longer expected to occur is Rs. Nil and and a loss of Rs. 2.11
crore respectively.
Amount that was removed from appropriate equity account (Hedge reserve
account) during the period and included in the initial cost or other
carrying amount of a non-financial asset or non-financial liability
whose acquisition or incurrence was a hedged highly probable forecast
transaction is Rs. Nil.
Amount in respect of the ineffectiveness which relates to time value of
option contracts recognised in the Statement of Profit and Loss that
arises from cash flow hedges is a loss of Rs. 129.10 crore as on 31 March
2015.
In respect of the Company''s foreign currency derivative contracts
outstanding as on 31 March 2015, a 10% increase in the exchange rates
of the currency, underlying such contracts, as given by the banks would
have resulted in an adverse movement by approximately Rs. 466.04 crore in
the fair value of outstanding contracts.
In respect of the Company''s foreign currency derivative contracts
outstanding as on 31 March 2015, a 10% decrease in the exchange rates
of the currency, underlying such contracts, as given by the banks would
have resulted in a positive movement by approximately Rs. 666.07 crore in
the fair value of outstanding contracts.
Counter-party risk
Counter-party risk encompasses settlement risk on foreign currency
derivative contracts. Exposure to these risks is closely monitored and
kept within predetermined parameters. The Company does not expect any
losses from non-performance by these counter-parties.
The Company''s policy is to transact with creditworthy banks, which are
reviewed on an on-going basis. The following table depicts that the
majority of the foreign currency derivatives are placed in highly rated
banks:
3 Contingent liabilities
(Rs.In Crore)
As at 31 March
Particulars 2015 2014
a Claims against the Company not acknowledged
as debts 450.51 446.41
b Guarantees given by the Company to Housing
Development Finance Corporation Ltd. -
for loans to employees (B 28,529) 0.02
c Excise and Customs demand - matters under
dispute and claims for refund of Excise Duty,
if any, against Excise Duty Refund received
in the earlier year 486.11 392.08
d Income tax matters - Appeal by Company 454.17 98.56
e Value Added Tax (VAT)/Sales Tax matters
under dispute 126.30 116.11
f Claims made by temporary workmen
Pending before various judicial/appellate
authorities in respect of
similar matters adjudicated by the
Supreme Court.The matter is contingent on
the facts and evidence presented before
the courts/ Liability Liability
adjudicating authorities and not necessarily
likely to be influenced by the Supreme
Court''s order unascertained unascertained
4 Previous year figures
Previous year figures have been regrouped wherever necessary to make
them comparable with those of the current year.
5 Miscellaneous
a. Rs.1 crore is equal to Rs.10 million.
b. Amounts less than Rs.50,000 have been shown at actual against
respective line items statutorily required to be disclosed.
Mar 31, 2014
Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. Consequent to the clarification from
the Ministry of Corporate Affairs, vide General Circular 08/2014 dated
4 April 2014, these financial statements have been prepared in
accordance with the relevant provisions/Schedules/Rules of the
Companies Act, 1956. Accordingly, these financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and the other relevant provisions
of the Companies Act, 1956.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current or non-current classification of
assets and liabilities.
a. Of the above:-
i. 144,683,510 equity shares were allotted as fully paid bonus shares
by capitalisation of General reserve by the Company on 13 September
2010.
ii. 101,183,510 equity shares were allotted as fully paid up pursuant
to the scheme of arrangement for demerger of erstwhile Bajaj Auto Ltd.
(now Bajaj Holdings & Investment Ltd.) by the Company on 3 April 2008.
iii. 1,805,071 equity shares thereof (excluding 1,805,071 equity shares
allotted as bonus shares thereon) are deemed to be issued by way of
Euro Equity Issue represented by Global Depository Receipts (GDR)
evidencing Global Depository Shares outstanding on the record date.
Outstanding GDRs at the close of the year were 60,044 (66,196)
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs.
10 per share. Each holder of equity shares is entitled to one vote per
share. The dividend proposed by the Board of Directors and approved by
the shareholders in the annual general meeting is paid in Indian
rupees. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
1 Derivative hedging instruments
The Company has adopted the accounting treatment and disclosures in
accordance with the principles laid down in AS 30 and AS 32 on foreign
currency derivative contracts.
The Company holds foreign currency derivatives to hedge its foreign
currency exposure. Derivatives are initially recognised at fair value
on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The Company designates foreign
currency derivatives as hedges of foreign currency risk associated with
a highly probable forecast transaction (cash flow hedge).
The Company has entered into simple forward contracts and par forward
contracts to hedge highly probable forecast export transactions. These
instruments meet the Management''s foreign exchange risk management
objectives and also qualify for hedge accounting as per the principles
of hedge accounting. The market value of instruments outstanding at the
close of the year is a gain of Rs. 1.95 crore as against Rs. Nil in the
previous year.
The Company has also entered into range forward contracts to hedge
highly probable forecast transactions, where the export realisations of
the Company are protected below a minimum pre-determined foreign
exchange rate whereas the realisation advantages are available to the
Company there from upto a higher pre-determined foreign exchange rate.
The Company does not benefit by rupee depreciating beyond the
pre-determined foreign exchange rate. These instruments meet the
Management''s foreign exchange risk management objectives and also
qualify for hedge accounting as per the principles of hedge accounting.
MTM losses in respect of effective hedges is carried to the Hedge
reserve and ineffectiveness, if any, including the time value of option
contracts is recognised in the results, as per the principles of AS-30.
The market value of instruments outstanding at the close of the year
indicate a gain aggregating Rs. 71.76 crore as against a gain in the
previous year aggregating Rs. 15.96 crore.
The time value of option contracts from the current year aggregating a
net loss of Rs. 76.81 crore after reversals, has been recognised as
"Other expense" being recurring in nature, against a net gain of Rs.
131.92 crore in the previous year recognised as "Other income".
Risk management policy and other disclosures
The exports of the Company, presently constituting substantial portion
of the turnover, are at prices pre-determined for each product in each
region. These prices are fixed in USD based on an assumed USD/ INR
rate. (Budgeted rate of realisation). Exports are then effected at
such price and hence it is desirable for the Company to shield itself
from adverse movements in forex rates at a future date.
The Company also imports raw materials and components for its
motorcycles etc. However, the value of such imports is not material as
compared to the value of exports. Nevertheless, the Company may wish to
secure its procurement prices in terms of INR to be able to forecast
its pricing and profitability. Consequently, the Company may wish to
hedge such exposures, future and current, to achieve the aforesaid
objective.
The exchange rate between the Indian rupee and foreign currencies has
changed substantially in recent periods and may continue to fluctuate
substantially in the future. Consequently, the Company uses derivative
financial instruments, such as foreign exchange forward and option
contracts, to mitigate the risk of changes in foreign currency exchange
rates in respect of its forecasted cash flows and trade receivables.
The details in respect of the outstanding foreign exchange forward
contracts including range forward and par forward contracts are given
below. The forward exchange contracts mature between one to twelve
months. The table below summarises the notional amounts (amounts of
contracts booked and outstanding) of foreign currency forward contracts
into relevant maturity groupings based on the remaining period as at
the 31 March 2014:
The fair value of forwards and foreign currency option contracts is
determined based on the appropriate valuation techniques as given by
the banks.
The cash flows from the hedges are expected to occur over the financial
year 2014-15 and will accordingly flow to the Statement of Profit and
Loss.
In respect of foreign currency derivative contracts designated as cash
flow hedges for par forward contracts, the Company has recorded a net
gain of Rs. 1.95 crore and net loss of Rs. 16.32 crore, as a component of
equity (Hedge reserve) as at 31 March 2014, and 2013, respectively and
a net loss of Rs. 13.53 crore and a net loss of Rs. 207.67 crore as part
of revenue during the year ended 31 March 2014, and 2013 respectively and
a loss of Rs. 2.60 crore (previous year Rs. 69.22 crore) to the Statement
of Profit and Loss on a break in the designation of the hedge.
In respect of foreign currency derivative contracts designated as cash
flow hedges for range forward contracts, the Company has recorded a net
gain of Rs. 150.65 crore and net gain of Rs. 18.04 crore, as a component
of equity (Hedge reserve) as at 31 March 2014, and 2013, respectively and
a net loss ofRs. 114.35 crore and a net loss of Rs. 394.74 crore as part
of revenue during the year ended 31 March 2014, and 2013 respectively and
a gain of Rs. 0.49 crore (previous year Rs. Nil) to the Statement of Profit
and Loss on a break in the designation of the hedge.
Amount that was removed from appropriate equity account (Hedge reserve
account) during the year ended 2014 and 2013 in respect of forecast
transaction for which hedge accounting had previously been used, but
which is no longer expected to occur is a loss of Rs. 2.11 crore and Rs.
69.22 crore respectively.
Amount that was removed from appropriate equity account (Hedge reserve
account) during the period and included in the initial cost or other
carrying amount of a non-financial asset or non-financial liability
whose acquisition or incurrence was a hedged highly probable forecast
transaction is Rs. Nil.
Amount in respect of the ineffectiveness which relates to time value of
option contracts recognised in the Statement of Profit and Loss that
arises from cash flow hedges is a loss of Rs. 78.89 crore as on 31 March
2014.
In respect of the Company''s foreign currency derivative contracts
outstanding as on 31 March 2014, a 10% increase in the exchange rates
of the currency underlying such contracts as given by the banks would
have resulted in an approximately Rs. 270.87 crore decrease in the fair
value of outstanding contracts.
In respect of the Company''s foreign currency derivative contracts
outstanding as on 31 March 2014, a 10% decrease in the exchange rates
of the currency underlying such contracts as given by the banks would
have resulted in an approximately Rs. 402.40 crore increase in the fair
value of outstanding contracts.
Counter-party risk
Counter-party risk encompasses settlement risk on foreign currency
derivative contracts. Exposure to these risks is closely monitored and
kept within pre-determined parameters. The Company does not expect any
losses from non-performance by these counter-parties.
The Company''s policy is to transact with credit worthy banks, which are
reviewed on an on-going basis. The following table depicts that the
majority of the foreign currency derivatives are placed in highly rated
banks:
2 Contingent liabilities
(Rs. In Crore)
As at 31 March
Particulars 2014 2013
a. Claims against the Company not
acknowledged as debts 446.41 418.88
b. Guarantees given by the Company to
banks, on behalf of its subsidiary,
PT. Bajaj Auto Indonesia - 27.14
c. Guarantees given by the Company to
Housing Development Finance
Corporation Ltd. -
for loans to employees 0.02 0.04
d. Excise and Customs demand - matters
under dispute and claims for
refund of Excise Duty, if any, against
Excise Duty Refund received in the earlier
year 392.08 293.31
e. Income tax matters - Appeal by Company 98.56 54.13
f. Value Added Tax (VAT)/Sales Tax matters
under dispute 116.11 377.48
g. Claims made by temporary workmen
Pending before various judicial/appellate
authorities in respect of similar matters
adjudicated by the Supreme Court. The matter is
contingent on the facts and evidence
presented before the courts/adjudicating
authorities and not necessarily likely to be Liability Liability
influenced by the Supreme Court''s order unascer
-tained unascer
-tained
3 Previous year figures
Previous year figures have been regrouped wherever necessary to make
them comparable with those of the current year.
4 Miscellaneous
a. Rs. 1 crore is equal to Rs. 10 million.
b. Amounts less than Rs. 50,000 have been shown at actual against
respective line items statutorily required to be disclosed.
Mar 31, 2013
Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and the other relevant provisions
of the Companies Act, 1956.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other .
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current - non current classification of
assets and liabilities.
1 Derivative hedging instruments
The Company has adopted the accounting treatment and disclosures in
accordance with the principles laid down in AS 30 and AS 32 on foreign
currency derivative contracts.
The Company holds foreign currency derivative to hedge its foreign
currency exposure. Derivatives are initially recognised at fair value
on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The Company designates foreign
currency derivatives as hedges of foreign currency risk associated with
a highly probable forecast transaction (cash flow hedge).
The Company has entered into simple forward contracts and par forward
contracts to hedge highly probable forecast export transactions. These
instruments meet the management''s Foreign exchange risk management
objectives and also qualify for hedge accounting as per the principles
of hedge accounting. The market value of instruments outstanding at the
close of the year is Rs. Nil as against a loss in the previous year
aggregating Rs. 212.87 crore.
The Company has also entered into range forward contracts to hedge
highly probable forecast transactions, where the export realisations of
the Company are protected below a minimum pre-determined foreign
exchange rate whereas the realisation advantages are available to the
Company there from up to a higher pre-determined foreign exchange rate.
The Company does not benefit by rupee depreciating beyond the
pre-determined foreign exchange rate. These instruments meet the
management''s Foreign exchange risk management objectives and also
qualify for hedge accounting as per the principles of hedge accounting.
MTM losses in respect of effective hedges is carried to the Hedge
reserve and ineffectiveness, if any, including the time value of option
contracts is recognised in the results, as per the principles of AS-30.
The market value of instruments outstanding at the close of the year
indicate a gain aggregating Rs. 15.96 crore as against a loss in the
previous year aggregating Rs. 256.11 crore.
The time value of option contracts from the current year aggregating a
net gain of Rs. 131.92 crore after reversals, has been recognised as
"other income" being recurring in nature, against a loss in the
previous year recognised for the first time aggregating Rs. 134 crore
as an exceptional item.
Risk management policy and other disclosures
The exports of the Company, presently constituting substantial portion
of the turnover, are at prices predetermined for each product in each
region. These prices are fixed in USD based on an assumed USD/INR rate.
(Budgeted rate of realisation).
Exports are then effected at such price and hence it is desirable for
the Company to shield itself from adverse movements in forex rates at a
future date.
The Company also imports raw materials and components for its
Motorcycles etc. However, the value of such imports is not material as
compared to the value of exports. Nevertheless, the Company may wish to
secure its procurement prices in terms of INR to be able to forecast
its pricing and profitability. Consequently the Company may wish to
hedge such exposures, future and current, to achieve the aforesaid
objective.
The exchange rate between the Indian rupee and foreign currencies has
changed substantially in recent periods and may continue to fluctuate
substantially in the future. Consequently, the Company uses derivative
financial instruments, such as foreign exchange forward and option
contracts, to mitigate the risk of changes in foreign currency exchange
rates in respect of its forecasted cash flows and trade receivables.
The details in respect of the outstanding foreign exchange forward
contracts including range forward and par forward contracts are given
below. The forward exchange contracts mature between one to twelve
months. The table below summarises the notional amounts (amounts of
contracts booked and outstanding) of foreign currency forward contracts
into relevant maturity groupings based on the remaining period as at
the 31 March 2013:
Amount that was removed from appropriate equity account (Hedge reserve
account) during the year ended 2013 and 2012 in respect of forecast
transaction for which hedge accounting had previously been used, but
which is no longer expected to occur is Rs. 69.22 crore and t Nil
respectively.
Amount that was removed from appropriate equity account (Hedge reserve
account) during the period and included in the initial cost or other
carrying amount of a non-financial asset or non-financial liability
whose acquisition or incurrence was a hedged highly probable forecast
transaction is Rs. Nil.
Amount in respect of the ineffectiveness which relates to time value of
option contracts recognised in the Statement of Profit and Loss that
arises from cash flow hedges is Rs. 2.08 crore as on 31 March 2013.
In respect of the Company''s foreign currency derivative contracts
outstanding as on 31 March 2013, a 10% increase in the exchange rates
of the currency underlying such contracts as given by the banks would
have resulted in an approximately Rs. 185.07 crore decrease in the fair
value of outstanding contracts.
In respect of the Company''s foreign currency derivative contracts
outstanding as on 31 March 2013, a 10% decrease in the exchange rates
of the currency underlying such contracts as given by the banks would
have resulted in an approximately Rs. 320.86 crore increase in the fair
value of outstanding contracts.
Counter-party Risk
Counter-party risk encompasses settlement risk on foreign currency
derivative contracts. Exposure to these risks is closely monitored and
kept within predetermined parameters. The Company does not expect any
losses from non-performance by these counter-parties.
The Company''s policy is to transact with credit worthy banks, which
are reviewed on an on-going basis. The following table depicts that the
majority of the foreign currency derivatives are placed in highly rated
banks:
2 Earnings Per Share (EPS)
Earnings per share is calculated by dividing the profit attributable to
the equity shareholders by the weighted average number of equity shares
outstanding during the year. The numbers used in calculating basic and
diluted earnings are stated below:
3 Employee benefits
Liability for employee benefits has been determined by an actuary,
appointed for the purpose, in conformity with the principles set out in
the accounting standard 15 (Revised) the details of which are as
hereunder.
4 Lease
Future minimum lease rental in respect of assets given on operating
lease in the form of office premises after 1 April 2001 Minimum future
lease payments as on 31 March 2013:
5 Previous year figures
Previous year figures have been reclassified to conform to this
year''s classification.
6 Miscellaneous
Rs. 1 crore is equal to Rs. 10 million.
Amounts less than Rs. 50,000 have been shown at actual against
respective line items statutorily required to be disclosed.
Mar 31, 2012
1 Derivative hedging instruments
The company has adopted the accounting treatment and disclosures in
accordance with the principles laid down in AS 30 and AS 32 on foreign
currency derivative contracts.
The company holds foreign currency derivative to hedge its foreign
currency exposure. Derivatives are initially recognised at fair value
on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The company designates foreign
currency derivatives as hedges of foreign currency risk associated with
a highly probable forecast transaction (cash flow hedge).
The company has entered into simple forward contracts and par forward
contracts to hedge highly probable forecast export transactions. These
instruments meet the management's Foreign exchange risk management
objectives and also qualify for hedge accounting as per the principles
of hedge accounting. The market value of instruments outstanding at the
close of the year indicate a loss aggregating Rs. 212.87 crore as against
a gain in the previous year aggregating Rs. 20.77 crore.
The company has also entered into range forward contracts to hedge
highly probable forecast transactions, where the export realisations of
the company are protected below a minimum pre-determined foreign
exchange rate whereas the realisation advantages are available to the
company there from up to a higher pre-determined foreign exchange rate.
The company does not benefit by rupee depreciating beyond the
pre-determined foreign exchange rate. These instruments meet the
management's Foreign exchange risk management objectives and also
qualify for hedge accounting as per the principles of hedge accounting.
MTM losses in respect of effective hedges is carried to the Hedge
Reserve and ineffectiveness, if any, including the time value of option
contracts is recognised in the results, as per the principles of AS-30.
The market value of instruments outstanding at the close of the year
indicate a loss aggregating Rs. 256.11 crore as against a gain in the
previous year aggregating Rs. 116.46 crore, which was not recognised in
the previous year as a matter of prudence.
Risk management policy and other disclosures
The exports of the company, presently constituting substantial portion
of the turn over, are at prices predetermined for each product in each
region. These prices are fixed in USD based on an assumed USD/INR rate.
(Budgeted rate of realisation). Exports are then effected at such
price and hence it is desirable for the company to shield itself from
adverse movements in forex rates at a future date.
The company also imports raw materials and components for its
Motorcycles etc. However the value of such imports is not material as
compared to the value of exports. Nevertheless, the company may wish to
secure its procurement prices in terms of INR to be able to forecast
its pricing and profitability. Consequently the company may wish to
hedge such exposures, future and current, to achieve the aforesaid
objective.
The exchange rate between the Indian rupee and foreign currencies has
changed substantially in recent periods and may continue to fluctuate
substantially in the future. Consequently, the company uses derivative
financial instruments, such as foreign exchange forward and option
contracts, to mitigate the risk of changes in foreign currency exchange
rates in respect of its forecasted cash flows and trade receivables.
2 Contingent liabilities
(Rs. In Crore)
As at As at
31 March 2012 31 March 2011
a) Claims against the Company not
acknowledged as debts 418.74 422.49
b) Guarantees given by the Company
to banks, on behalf of its subsidiary,
PT Bajaj Auto Indonesia 25.44 23.19
c) Guarantees given by the Company to
Housing Development Finance
Corporation Ltd.
for loans to employees 0.12 0.22
d) Excise and Customs demand - matters under dispute and Claims for
refund of Excise Duty, if any, against Excise Duty Refund received in
the earlier year 181.78 122.70
e) Income tax matters - Appeal by company 9.58 -
f) Sales Tax matters under dispute 357.85 328.41
g) Claims made by temporary workmen
Pending before various judicial/appellate authorities in respect of
similar matters adjudicated by the Supreme Court in the past.The matter
is contingent on the facts and evidence presented before the
courts/adjudicating authorities and not necessarily Liability Liability
likely to be influenced by the Supreme Courts order unascertained
unascertained
3 Segment information
Segment information is based on the consolidated financial statements.
4 Previous year figures
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 year's classification. The adoption of Revised Schedule
VI for previou: year figures does not impact recognition and
measurement principles followed for preparation of financial
statements.
5 Miscellaneous
Rs. 1 crore is equal to Rs. 10 million.
Amounts less than Rs. 50,000 have been shown at actual against respective
line items statutorily required to be disclosed.
Mar 31, 2011
(Rs. In Crore)
2011 2010
1 (a) Contingent liabilities not provided
for in respect of :
(i) Claims against the Company not
acknowledged as debts 422.49 411.28
(ii) Guarantees given by the Company
to banks, on behalf of its
subsidiary, PT Bajaj Auto Indonesia 23.19 23.35
(iii) Guarantees given by the Company
to Housing Development
Finance Corporation Ltd. -
for loans to Employees 0.22 0.45
(iv) Excise and Customs demand - matters
under dispute and Claims for
refund of Excise Duty, if any,
against Excise Duty Refund received
in the earlier year 122.70 68.12
(v) Sales Tax matters under dispute 328.41 276.45
(vi) Claims made by temporary workmen
Pending before various judicial/appellate
authorities in respect of similar matters
adjudicated by the Supreme Court in the past.
The matter is contingent on the facts and
evidence presented before the
courts/adjudicating authorities and not
necessarily likely Liability Liability
to be influenced by the Supreme Courts
order unascertained unascertained
(b) The Company has imported Capital Goods under the Export Promotion
Capital Goods Scheme, of the Government of India, at concessional rates
of duty on an undertaking to fulfill quantifed exports. The future
obligation aggregates to USD 559 million (Previous Year USD Nil).
Minimum export obligation to be fulfilled by the company under the said
scheme by 31 March 2011 has been fulfilled. Non-fulfillment of the
balance of such future obligation in the manner required, if any,
entails options/rights to the Government to confiscate capital goods
imported under the said licences and other penalties under the above-
referred scheme.
6. Managerial Remuneration:
(a) Mr. Sanjiv Bajaj, an Executive Director of the company is also the
Managing Director of Bajaj Finserv Limited.
His remuneration as an Executive Director from this company and as a
Managing Director from Bajaj Finserv Limited, both together, are
subject to the higher of the maximum admissable limits of any one of
the two companies.
8. Details of Licensed & Installed Capacity, Production, Stocks and
Turnover Class of Goods
(a) Licensed Capacity is stated as per the Original Licence held by the
erstwhile Bajaj Auto Ltd. (pre-demerger). However, the Companys
products are exempt from Licensing requirements under New Industrial
Policy in terms of notifcation no. s.o. 477 (E) dated 25 July1991.
(b) As certifed by the COO and being a technical matter, accepted by
the Auditors as correct.
9. Sales tax deferral incentive/loan, to the extent eligible under
Rule 84 of the Maharashtra Value Added Tax Rules, 2005, has been
prepaid during the year at a discounted value of Rs. 368.14 crore
thereby resulting in a surplus of Rs. 826.82 crore. The said sum has
been refected as an exceptional item in the Profit & Loss Account and
considered as a capital receipt.
10. Derivative financial instruments:
The Company has adopted the accounting treatment and disclosures in
accordance with the principles laid down in AS 30 and AS 32 on foreign
currency derivative contracts.
The Company holds foreign currency derivative to hedge its foreign
currency exposure. Derivatives are initially recognised at fair value
on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The Company designates certain foreign
currency derivatives as hedges of foreign currency risk associated with
a highly probable forecast transaction (cash flow hedge).
The company has entered into simple forward contracts and par forward
contracts to hedge highly probable forecast export transactions. These
instruments meet the managements Foreign exchange risk management
objectives and also qualify for hedge accounting as per the principles
of hedge accounting.
The company has also entered into range forward contracts to hedge
highly probable forecast transactions, where the export realisations of
the company are protected below a minimum pre-determined foreign
exchange rate whereas the realisation advantages are available to the
company there from up to a higher pre-determined foreign exchange rate.
The company does not benefit by rupee depreciating beyond the
pre-determined foreign exchange rate. Though these instruments meet the
managements Foreign exchange risk management objectives, they do not
qualify for hedge accounting as the same do not satisfy test of
effectiveness. The market value of instruments outstanding at the close
of the year indicate a gain aggregating Rs. 116.46 crore (previous year
aggregating Rs. 76.08 crore), which as a matter of prudence has not
been recognised.
Cash flow hedges
Changes in the fair value of a derivative hedging instrument that
qualify for hedge accounting as per the principles of hedge accounting
and designated as a cash flow hedge are recognised as Hedging Reserve
and presented within Reserves and Surplus, to the extent that the hedge
is effective. To the extent that the hedge is ineffective, changes in
fair value if resulted in loss are recognised in profit and loss
account. However, changes in fair value in respect of ineffective
hedges resulting in gains are not recognised on the basis of prudence.
If the hedging instrument no longer meets the criteria for hedge
accounting, expires or is sold, terminated or exercised, then hedge
accounting is discontinued prospectively. The cumulative gain or loss
previously recognised in Hedging Reserve, remains there until the
forecast transaction occurs.
When a hedging instrument expires or is sold, or when a hedge no longer
meets the criteria for hedge accounting, any cumulative gain or loss
existing in equity at that time is recognised in profit and loss
account. When a forecast transaction is no longer expected to occur,
the cumulative gain or loss that was reported in Hedging Reserve is
immediately transferred to profit and loss account.
Risk management policy and other disclosures
The Exports of BAL, presently constituting substantial portion of the
turnover, are at prices predetermined for each product in each region.
These prices are fixed in USD based on an assumed USD/INR rate.
(Budgeted rate of realisation). Exports are then effected at such price
and hence it is desirable for the company to shield itself from adverse
movements in forex rates at a future date.
The Company also imports raw materials and components for its
Motorcycles etc. However, the value of such imports is not material as
compared to the value of exports. Nevertheless, the company may wish to
secure its procurement prices in terms of INR to be able to forecast
its pricing and profitability. Consequently the company may wish to
hedge such exposures, future and current, to achieve the aforesaid
objective.
The exchange rate between the Indian rupee and foreign currencies has
changed substantially in recent periods and may continue to fluctuate
substantially in the future. Consequently, the Company uses derivative
financial instruments, such as foreign exchange forward and option
contracts, to mitigate the risk of changes in foreign currency exchange
rates in respect of its forecasted cash flows and trade receivables.
The fair value of forwards and foreign currency option contracts is
determined based on the appropriate valuation techniques as given by
the banks.
The cash flows from the hedges are expected to occur over the financial
year 2011-12 and will accordingly flow to the profit and loss account.
In respect of foreign currency derivative contracts designated as cash
flow hedges, the Company has recorded a net gain of Rs. 20.77 crore and
net gain of Rs. 33.39 crore, as a component of equity (Hegde Reserve)
as at March 31, 2011, and 2010, respectively and a net gain of Rs.
32.02 crore and a net gain of Rs. Nil as part of revenue during the
year ended March 31, 2011, and 2010 respectively.
There is no forecast transaction for which hedge accounting had
previously been used, but which is no longer expected to occur.
Amount that was removed from appropriate equity account (Hedging
Reserve Account) during the period and included in the initial cost or
other carrying amount of a non-financial asset or non-financial
liability whose acquisition or incurrence was a hedged highly probable
forecast transaction is Rs. Nil.
Amount in respect of the ineffectiveness recognised in the statement of
profit and loss that arises from cash flow hedges are Rs. Nil.
In respect of the Companys foreign currency par forward contracts
outstanding as on March 31,2011, a 10% increase/decrease in the
exchange rates of the currency underlying such contracts as given by
the banks would have resulted in an approximately Rs. 106.77 crore
increase/decrease in the Companys hedging reserve.
Counter-Party Risk
Counter-party risk encompasses settlement risk on foreign currency
derivative contracts. Exposure to these risks is closely monitored and
kept within predetermined parameters. The Company does not expect any
losses from non-performance by these counter-parties.
The Companys policy is to transact with credit worthy banks, which are
reviewed on an on-going basis. The following table depicts that the
majority of the foreign currency derivatives are placed in highly rated
banks:
Investment grade of Outstanding Foreign Exchange Forward
Highest Safety represents a credit rating equivalent of AAA, High
Safety represents a credit rating equivalent of AA+, AA and Adequate
Safety represents a credit rating of A.
11. Investments:
a. Investments made by the Company other than those with a maturity of
less than one year and those intended to be held for less than one
year, being of long-term nature, diminution in the value of quoted
investments are not considered to be of a permanent nature. On an
assessment of non-performing investments (quoted and unquoted) as per
guidelines adopted by the management, no provision has been determined
during the year ended 31 March 2011.
b. PT. Bajaj Auto Indonesia (PT. BAI), a subsidiary of the company, in
which the company holds 98.94%, has registered substantial accumulated
losses. The company through PT. BAI made a foray into the Indonesian
market, which is very competitive but promising. Considering the
challenges in setting up an appropriate dealer and service network,
creation of brand awareness, appropriate tie ups with finance agencies,
understanding customer behavior and preferences, in addition to setting
up an assembly plant, the gestation period is expected to be long but
eventually profitable. However, considering the continuing losses and
longer gestation period, the company has assessed the carrying value of
investments made in PT. BAI and determined an amount of Rs. 102.27
crore at present, as a diminution in the value of investment and has
accordingly made a provision of the said amount.
15. Deposits include a sum of Rs. 9.2 crore (Previous year Rs. 9.2
crore) against use of premises on a Leave and License basis, placed
with Directors and their relatives, jointly and severally.
16. Future minimum lease rental in respect of assets
(i) given on operating lease in the form of office premises after April
1, 2001 Minimum future lease payments as on March 31, 2011:
(a) Receivable within one year - Rs. 2.63 crore (Rs. 0.49 crore)
(b) Receivable between one year and five years - Rs. 9.90 crore (Rs.
1.31 crore)
(c) Receivable after five years -Rs. 0.14 crore (Rs. 0.16 crore)
(ii) taken on operating lease in the form of office premises after
April 1, 2001 Minimum future lease payments as on March 31, 2011:
(a) Payable within one year- Rs. 7.25 crore (Rs. 6.83 crore)
(b) Payable between one year and five years- Rs. 17.43 crore (Rs. 17.31
crore)
(c) Payable after five years - Rs. 17.74 crore (Rs. 19.51 crore)
17. The company has allotted bonus shares on 13 September 2010 in the
ratio of one equity share for every equity share of Rs. 10 each held in
the company on the record date. The Basic and Diluted Earnings Per
Share (EPS) has been calculated for the current year and previous year
after taking into account the bonus issue as required by AS-20
ÃEarnings Per ShareÃ.
18. Segment Information based on the Consolidated Financial Statements
attached to the Independent Financial Statements has been disclosed in
the Statement annexed to this Schedule.
19. Disclosure of transactions with Related Parties, as required by
Accounting Standard 18 Related Party Disclosures has been set out in
a separate statement annexed to this Schedule. Related parties as
defined under clause 3 of the Accounting Standard have been identified
based on representations made by key managerial personnel and
information available with the Company.
20. 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 ÃThe
Micro, Small and Medium Enterprises Development Act 2006Ã 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.
21. Amounts less than Rs. 50,000 have been shown at actual against
respective line items statutorily required to be disclosed.
22. Previous year figures have been regrouped, wherever necessary, to
make them comparable with those of the current year.
Mar 31, 2010
As at
31 March 2009
Rs. In Million Rs. In Million
1 (A) Contingent liabilities not
provided for in respect of:
(i) Sales Bills Discounted -- --
(ii) Claims against the Company not
acnowledged as debts 4,112.8 4,166.5
(iii) Guarantees given by the Company
to banks, on behalf of its
subsidiary, PTBajaj Auto Indonesia 233.5 263.7
(iv) Guarantees given by the Company to
Housing Development Finance
Corporation Limited-for loans to
Employees 4.5 6.6
(v) Excise and Customs demand - matters
under dispute and Claims for refund
of Excise Duty, if any, against
Excise
Duty Refund received in the earlier
year 681.2 775.8
(vi) Sales Tax matters under dispute 2,764.5 2,602.0
(vii) Claims made by temporary workmen
Pending before various courts in
respect of similar matters
adjudicated by the Supreme Court
in the past.The matter is
contingent on the facts
and evidence presented before the
courts / adjudicating authorities
and not necessarily Liability
Liability likely to be influenced Liability Liability
by the Supreme Courts order unascertained unascertained
(B) The Company has imported Capital Goods under the Export Promotion
Capital Goods Scheme, of the Government of India, at concessional
rates of duty on an undertaking to fulfill quantified exports,
which have been entirely fulfilled by the close of the year.
However , formal discharge from obligation by discharge of
license by the appropriate authorities is in progress.
(C) The Sales tax benefit availed by the company by virtue of
assignment of incentives attached to the wind farm business,
has been passed-on to the Bajaj Finserv Limited. The obligation
to repay could devolve on the companny if not settled by Bajaj
Finserv Limited.Total amount passed on to date aggregates
Rs.3,107.6 million (Previous year Rs.3,107.6 million).
(e) Foreign exchange derivatives and exposures outstanding at close of
the year:
(disclosed in equivalent US Dollars for sake of brevity, uniformity and
comparability)
2 Details of raw materials consumption, goods traded in and Machinery
Spares Consumption
3) a) Voluntary Retirement:
During the previous year, company decided to recognise the expenditure
incurred on voluntary retirement of employees of its Akurdi plant,
aggregating to Rs.3666 million over a period of two years in line with
the option of the special transitional provision introduced in the
Accounting Standard -15 "Employee Benefits" allowing such expenditure
to be deferred forrecognition over the payback period but not
extending beyond 1 April 2010. A charge of Rs.1833 million has already
been recognised during 2008-09. Accordingly, the company has recognised
the balance charge for the year amounting to Rs.1833 million.
b) Instruments acquired to hedge highly probable forecast transaction:
In order to recognise the impact of fluctuation in foreign currency
rates arising out of instruments acquired to hedge highly probable
forecast transactions, in appropriate accounting periods, the company
has decided to apply the principles of recognition set out in the
Accounting Standard 30 - Financial Instruments-Recognition and
Measurement (AS-30) as suggested by the Institute of Chartered
Accountants of India.
Accordingly, the unrealised loss/gain (net) consequent to foreign
currency fluctuations, in respect of effective hedging instruments,
represented by simple forward covers, to hedge future exports, are
carried as a Hedging Reserve, during the year, and to be ultimately set
off in the profit and loss account when the underlying transaction
arises, as against the past practice of recognising the losses, in
respect of such derivatives, in the profit and loss account at the end
of each period determined with reference to the foreign exchange rates
at the close of the period. The amount outstanding in the hedge reserve
at the close of the year is Rs.333.9 million.
The company has also entered into range forward contracts to hedge
highly probable forecast transactions, where the export realisations of
the company are protected below a minimum pre-determined foreign
exchange rate whereas the realisation advantages are available to the
company there from up to a higher pre-determined foreign exchange
rate.The company does not benefit by rupee depreciating beyond the
pre-determined foreign exchange rate. Though these instruments meet the
managements Foreign exchange risk management objectives, they do not
meet the test of effectiveness as per the principles of hedge
accounting. The market value of instruments outstanding at the close of
the year indicate a gain aggregating Rs.760.8 million, which as a
matter of prudence has not been recognised, as against a loss provided
for in the previous year aggregating Rs.218 million which has now been
written back.
4) Transfer of some of the titles to the assets vested with the
company consequent to the Scheme of arrangement (de-merger) could not,
where necessary, be transferred, as at 31st March 2010 pending
adjudication of stamp duty. Hence the same were held intrust for the
company by Bajaj Holdings and Investment Limited.
5) Investments:
a. Investments made by the Company other than those with a maturity of
less than one year and those intended to be held for less than one
year, being of long-term nature, diminution in the value of quoted
Investments are not considered to be of a permanent nature. On an
assessment of non-performing investments (quoted and unquoted) as per
guidelines adopted by the management, no provision has been determined
during the year ended 31 March 2010.
b. PT. Bajaj Auto Indonesia (PT. BAI), a subsidiary of the company, in
which the company holds 98.94%, has registered substantial accumulated
losses. The company through PT. BAI made a foray into the Indonesian
market, which is very competitive but promising. Considering the
challenges in setting up an appropriate dealer and service network,
creation of brand awareness, appropriate tie ups with finance agencies,
understanding customer behavior and preferences, in addition to setting
up an assembly plant, the gestation period is expected to be long but
eventually profitable. Hence diminution in the value of the investments
made in PT. BAI are not considered to be of a permanent nature and
hence no provisions are required to be made in this regard, as per the
policy followed by the company, at this point of time.
6) Deposits include a sum of Rs.92 million (Previous year Rs.80
million) against use of premises on a Leave License basis, placed with
Directors and their relatives, jointly and severally.
7) Future minimum lease rental in respect of assets
(i) given on operating lease in the form of office premises after April
1,2001 Minimum future lease payments as on March 31,2010:
(a) Receivable within one year-Rs.4.9 million (Rs.0.1 million)
(b) Receivable between one year and five years - Rs.13.1 million
(Rs.Nil)
(c) Receivable after five years- Rs. 1.6 million (Rs.Nil)
(ii) taken on operating lease in the form of office premises after
April 1,2001 Minimum future lease payments as on March 31,2010:
(a) Payable within one year- Rs. 68.3 million (Rs.58.6 million)
(b) Payable between one year and five years- Rs.173.1 million (Rs.123.3
million)
(c) Payable after five years-Rs. 195.1 million (Rs.189.4 million)
8) Segment Information based on the Consolidated Financial Statements
attached to the Independent Financial Statements has been disclosed in
the Statement annexed to this Schedule.
9) Disclosure of transactions with Related Parties, as required by
Accounting Standard 18Related Party Disclosureshas been set out in a
separate statement annexed to this Schedule. Related parties as defined
under clause 3 of the Accounting Standard have been identified based on
representations made by key managerial personnel and information
available with the Company.
10) Considering the company has been extended credit period of 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.
11) Amounts less than Rs.50,000 have been shown at actual against
respective line items statutorily required to be disclosed.
12) Previous year figures have been regrouped, wherever necessary, to
make them comparable with those of the current year.
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Bajaj Auto Ltd. ಹೆಚ್ಚಿನ ಮಾಹಿತಿ
-
Bajaj Auto Ltd. ಟೂಲ್ಸ್
- ಬಲ್ಕ್ ಡೀಲ್ಸ್
- ಬ್ಲಾಕ್ ಡೀಲ್ಸ್
-
Bajaj Auto Ltd. ಕಂಪನಿಯ ವಿವರಗಳು
- ಕಂಪನಿ ಪ್ರೋಫೈಲ್
- ಕಂಪನಿ ಇತಿಹಾಸ
- ಆಡಳಿತ ಮಂಡಳಿ
- ಬಂಡವಾಳದ ಬಗೆ
- ಉತ್ಪನ್ನ
- ಬ್ಯಾಂಕರ್ಸ್/ಅಡಿಟರ್ಸ್/ರೆಜಿಸ್ಟರ್ಸ್
-
ಕಂಪನಿ ಇತಿಹಾಸ
- ಬೋನಸ್
- ಬಿಎಸ್ಇ ಧಾರಣೆ ಇತಿಹಾಸ
- ಎನ್ಎಸ್ಇ ಧಾರಣೆ ಇತಿಹಾಸ
-
Bajaj Auto Ltd. ಹಣಕಾಸು ಅನುಪಾತದ ಲೆಕ್ಕ
- ಅನುಪಾತ
-
Bajaj Auto Ltd. ಫಲಿತಾಂಶ
- ತ್ರೈಮಾಸಿಕ ಫಲಿತಾಂಶ
- ಅರ್ಧವಾರ್ಷಿಕ ಫಲಿತಾಂಶ
- ಒಂಭತ್ತು ತಿಂಗಳ ಫಲಿತಾಂಶ
- ವಾರ್ಷಿಕ ವರದಿ
-
Bajaj Auto Ltd. ಹಣಕಾಸು ಡಾಟಾ
- ಅಡಿಟ್ ಫಲಿತಾಂಶ
- ಹಣದ ಹರಿವು
- ಬ್ಯಾಲೆನ್ಸ್ ಶೀಟ್
-
Bajaj Auto Ltd. ವರದಿಗಳು
- ಅಕೌಂಟಿಂಗ್ ಪಾಲಿಸಿ
- ಅಡಿಟರ್ಸ್ ವರದಿ
- ನಿರ್ದೇಶಕರ ವರದಿ
- ಖಾತೆಗೆ ಮುಖ್ಯ ವಿಚಾರ
-
Bajaj Auto Ltd. ಕಾರ್ಪೋರೇಟ್ ವರದಿಗಳು
- ಬುಕ್ ಕ್ಲೋಸರ್
- ಡಿವಿಡೆಂಡ್
- ಬೋರ್ಡ್ ಮೀಟಿಂಗ್
