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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 532500ISIN: INE585B01010INDUSTRY: Auto - Cars & Jeeps

BSE   ` 7147.00   Open: 7290.00   Today's Range 7120.05
7360.00
-100.10 ( -1.40 %) Prev Close: 7247.10 52 Week Range 5447.00
7929.00
Year End :2019-03 

Notes to the Financial Statements

(All amounts in Rs. million, unless otherwise stated)

35 Operating Lease Arrangements The Company as a Lessee

Leasing arrangements

The Company has entered into operating lease arrangements for various land. These arrangements are non-cancellable in nature and range between fifteen to ninty nine years. Lease rental expense is set out in note 28 as 'Rent' in 'Other expenses'. The future minimum lease commitments under non-cancellable operating leases are as under:

Non-cancellable operating lease commitments

As at 31.03.2019

As at 31.03.2018

Within one year

60

59

Later than one year but less than five years

268

257

Later than five years

294

366

622

682

The Company as a Lessor

Leasing arrangements

The Company has entered into operating lease arrangements for various land and premises. These arrangements are both cancellable and non-cancellable in nature and range between three to fifteen years. Lease rental income earned by the Company is set out in Note 22 as 'Rental income'. The future minimum lease receivables under non-cancellable operating leases are as under:

Non-cancellable operating lease receivables

As at 31.03.2019

As at 31.03.2018

Within one year

88

102

Later than one year but less than five years

353

437

Later than five years

597

1,117

1,038

1,656

36 Capital & Other Commitments

As at 31.03.2019

As at 31.03.2018

Estimated value of contracts on capital account, excluding capital advances, remaining to be executed and not provided for

27,587

32,718

Outstanding commitments under Letters of Credit established by the Company

2,192

2,162

37 Export Promotion Capital Goods (EPCG)

Export Promotion Capital Goods (EPCG) allows import of capital goods including spares for pre-production, production and post production at zero duty subject to an export obligation of 6 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from authorization issue date.

The Company has been availing the benefit and has been importing capital goods under the scheme at zero custom duty. The Company has accounted for the benefits received in accordance with the Ind AS 20- Accounting for Government Grants and Disclosure of Government Assistance.

The benefits (saving of custom duty) obtained from government has been treated as a Government Grant, which has been accounted for as deferred benefit under other current liabilities in note no 19 and recognised as a cost of property, plant and equipment. As per the EPCG scheme, the Company has an export obligation equivalent to 6 times of duty saved. The deferred benefit accounted for, shall be credited to statement of profit and loss on a pro-rata basis as and when the export obligation is fulfilled.

38 Contingent Liabilities

A) Claims against the Company disputed and not acknowledged as debts:

As at 31.03.2019

As at 31.03.2018

(0

Excise Duty

(a) Cases decided in the Company's favour by Appellate authorities and for which the department has filed further appeals and show cause notices / orders on the same issues for other periods

1,624

1,598

(b) Cases pending before Appellate authorities in respect of which the Company has filed appeals and show cause notices for other periods

13,884

12,691

Total

15,508

14,289

Amount deposited under protest

1,694

1,601

00

Service Tax

(a) Cases decided in the Company's favour by Appellate authorities and for which the department has filed further appeals and show cause notices / orders on the same issues for other periods

1,210

1,060

(b) Cases pending before Appellate authorities in respect of which the Company has filed appeals and show cause notices for other periods

3,569

2,851

(c) Show cause notices on issues yet to be adjudicated

12

158

Total

4,791

4,069

Amount deposited under protest

60

61

(iii)

Income Tax

(a) Cases decided in the Company's favour by Appellate authorities and for which the department has filed further appeals

10,370

5,447

(b) Cases pertaining to issues decided in favour of the Company for an earlier year but the Income Tax Department have raised a demand for a similar issue for subsequent years and are pending before Appellate authorities / Dispute Resolution Panel pursuant to appeals filed by the Company

30,529

28,464

(c) Other cases pending before Appellate authorities / Dispute Resolution Panel in appeals filed by the Company

23,830

18,984

Total

64,729

52,895

Amount deposited under protest

4,789

3,899

(iv)

Custom Duty

(a) Cases pending before Appellate authorities in respect of which the Company has filed appeals

81

108

(b) Others

70

60

Total

151

168

Amount deposited under protest

-

25

(v)

Sales Tax

Cases pending before Appellate authorities in respect of which the Company has filed appeals

10

67

Amount deposited under protest

1

18

(vi)

Claims

Claims against the Company lodged by various parties

1,043

1,017

Others

1,929

31

(vii) In respect of disputed Local Area Development Tax (LADT) (upto April 15, 2008) / Entry Tax, the amounts under dispute are Rs. 21 million (as at 31.03.2018: Rs. 21 million) for LADT and Rs. 20 million (as at 31.03.2018: Rs. 20 million) for Entry Tax. The State Government of Haryana has repealed the LADT effective from April 16, 2008 and introduced the Haryana Tax on Entry of Goods into Local Area Act, 2008 with effect from the same date.

(viii) The Competition Commission of India ("CCI") had passed an order dated August 25, 2014 stating that the Company has violated certain sections of the Competition Act, 2002 and has imposed a penalty of Rs. 4,712 million. An interim stay is in operation on the above order of the CCI pursuant to the writ petition filed by the Company before the Delhi High Court.

(ix) The Hon'ble Supreme Court in a recent ruling has passed a judgement on the definition and scope of 'Basic Wages' under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Pending issuance of guidelines by the regulatory authorities on the application of this ruling, the impact on the Company, if any, cannot be ascertained.

B) The amounts shown in the item (A) represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately or relate to a present obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate cannot be made. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

39 Excise Duty

Consequent to the introduction of Goods and Services Tax (GST) with effect from July 01, 2017; Central Excise, Value Added Tax (VAT) etc. have been subsumed into GST. In accordance with Ind AS 115 on Revenue Recognition and Schedule III of the Companies Act, 2013, unlike Excise Duty, levies like GST, VAT etc. are not part of revenue. Accordingly, the figure for the year ended March 31, 2019 is not comparable with year ended March 31, 2018. The following additional information is being provided to facilitate such understanding:

Year ended 31.03.2019

Year ended 31.03.2018

A.

Sale of products

830,265

803,365

B.

Excise duty

-

22,317

C.

Sale of products excluding excise duty (A) - (B)

830,265

781,048

40 The Company entered into a 'Contract Manufacturing Agreement' (CMA) with Suzuki Motor Gujarat Private Limited (SMG), a fellow subsidiary of Suzuki Motor Corporation (SMC) on December 17, 2015 for a period of 15 years which automatically extends for a further period of 15 years, unless terminated by mutual agreement. SMG during the term of this agreement, shall manufacture and supply vehicles on an exclusive basis to MSIL in accordance with the terms of the CMA . Accordingly, expenses recorded during the year includes Rs. 4,912 million (previous year Rs. 2,921 million) towards the lease of specific Property, Plant & Equipment.

41 Auditors' Remuneration*

Year ended 31.03.2019

Year ended 31.03.2018

Statutory audit

16

16

Taxation matters

8

8

Other audit services / certification

3

4

Reimbursement of expenses

1

1

* excluding GST, Service Tax and Swachh Bharat & Krishi Kalyan Cess.

42 Details of Research and Development Expenses

Year ended 31.03.2019

Year ended 31.03.2018

Revenue expenditure

Employees remuneration and benefits

3,471

3,100

Other expenses of manufacturinq and administration

3,245

1,973

Capital expenditure

4,372

3,570

Less: Contract research income

(3,960)

(327)

7.128

8.316

43 CIF Value of Imports

Year ended 31.03.2019

Year ended 31.03.2018

Raw materials and components

43,969

38,879

Capital goods

13,312

6,483

Stores and spares

1,142

1,082

Dies and moulds

89

94

Others

496

567

44 Value of Imported and Indigenous Material Consumed

Year ended 31.03.2019

Year ended 31.03.2018

i)

Raw material and components

Imported

29,489

29,965

Indigenous

420,750

419,448

450,239

449,413

Percentage of total consumption

Imported

7%

7%

Indigenous

93%

93%

ii)

Machinery spares

Imported

630

581

Indigenous

2,323

2,109

2,953

2,690

Percentage of total consumption

Imported

21%

22%

Indigenous

79%

78%

iii)

Consumption of stores

Imported

131

115

Indigenous

1,962

2,247

2,093

2,362

Percentage of total consumption

Imported

6%

5%

Indigenous

94%

95%

45 Licensed Capacity, Installed Capacity and Actual Production

Product

Units

Licensed Capacity

Installed Capacity**

Actual Production

Passenger Car and Light Duty Utility Vehicles

Nos

_*

1,576,000

1,562,938

(-)*

(1,566,800)

(1,624,487)

Notes

* Licensed capacity is not applicable from 1993-94.

** Installed capacity is as certified by the management and relied upon by the auditors, being a technical matter

Previous year figures are in bracket.

46 Sales, Opening Stock and Closing Stock

Product

Sales

Opening Stock

Closing Stock

Qty (Nos)

Value

Qty (Nos)

Value

Qty (Nos)

Value

Passenger Vehicles

1,862,449

747,715

29,789

9,700

18,122

5,768

(1,779,574)

(731,314)

(33,156)

(12,330)

(29,789)

(9,700)

Spare Parts and Components

*

82,295

*

3,197

*

3,798

*

(71,803)

*

(3,072)

*

(3,197)

Dies, Moulds and Others

*

255

*

-

*

-

*

(248)

*

-

*

-

Work in Progress

*

NA

*

1,772

*

2,995

*

(NA)

*

(1,546)

*

(1,772)

Notes:

1 Traded goods comprise vehicle, spares, components, dies and moulds. During the year 289,467 vehicle (previous year 153,233 vehicle) were purchased.

2 Closing stock of vehicles is after adjustment of 199 vehicles (previous year 82 vehicles) totally damaged.

3 Sales quantity excludes own use vehicles 1,403 Nos. (previous year 1,284 Nos.)

4 Sales quantity excludes sample vehicles 21 Nos. (previous year 147 Nos.)

5 Previous year figures are in bracket.

* In view of the innumerable sizes/ numbers (individually less than 10%) of the components, spare parts and dies and moulds it is not possible to give quantitative details.

47 Statement of Raw Material and Components Consumed

Group of material

Unit

2018-19

2017-18

Qty

Amount

Qty

Amount

Steel coils

MT

284,306

15,809

290,071

14,866

Ferrous castings

MT

41 ,204

5,913

42,858

5,519

Non-ferrous castings

MT

48,354

8,916

47,730

8,339

Other components

*

415,818

*

416,671

Paints

K.LTR '

13,005

13,082

MT

11,307

3,783

11,938

4,018

450,239

449,413

* In view of the innumerable sizes/ numbers (individually less than 10%) of the components, spare parts and dies and moulds it is not possible to give quantitative details.

48 The financial statements were approved by the the Board of Directors and authorised for issue on April 25, 2019.

For and on behalf of the Board of Directors

KENICHI AYUKAWA

KAZUNARI YAMAGUCHI

AJAY SETH

SANJEEV GROVER

Managing Director & CEO

Director

Chief Financial Officer

Chief General Manager & Company Secretary

DIN : 02262755

DIN : 07961388

ICSI Membership No : F3788

Place: New Delhi

Date: 25th April, 2019