1. These properties are in the name of Bill Forge Private Limited, Mahindra Ugine Steel Company Limited, Coimbatore City Building Private Ltd and Vishrant Engineering Private Ltd. These Properties have vested into the Company pursuant to amalgamations of these entities with the Company. The Company is in the process of getting these properties transferred in its name.
2. The Company has change its name from Mahindra CIE Automotive Limited to CIE Automotive India Limited in the current year ended 31st December 2023. The Company is in the process of getting these properties transferred in its name.
6. Goodwill
Goodwill is tested for impairment on an annual basis. Goodwill is monitored by management at the level of cash generating units, which is India in this case. For the current and previous financial year, the recoverable amount of Cash Generating Unit (CGU) was determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five year period.
Sensitivity to changes in assumptions of CGU
The management believes that no reasonably possible change (say 10%) in any of the key assumptions used in the value in use calculation would cause the carrying value of the CGU to materially exceed its value in use.
Results of the analysis
Based on the above assessment, the Company concluded that in both current year as well as previous year, goodwill has not suffered any impairment. Further, the result of using before-tax cash flows and discount rates does not differ significantly from the outcome of using after-tax cash flows and discount rates.
a) During the year, the Company has made additional investment amounting ' 41.60 Millions in Clean Max Deneb Power LLP and amounting ' 9.24 Millions Strongsun Solar Private Limited which are engaged in solar energy business.
b) In September 2018, the Board of Directors of CIE Automotive India Limited (formerly known as Mahindra CIE Automotive Limited) decided to dispose off the forging business in the United Kingdom, corresponding to the company Stokes Group Limited. The Stokes Group Limited has been liquidated on September 05, 2023.
Transferred Receivables
The carrying amount of the trade receivable includes receivables which are subject to factoring arrangement. Under this arrangement, the Company has transferred the relevant receivables to the factor in exchange for Cash and is prevented from selling or pledging the receivables. However, the Company has retained late payment and credit risk. The Company therefore continues to recognize the transferred assets in their entirety in its balance sheet. The amount repayable under the factoring agreement is presented as borrowing. The Company considers the held to collect business model to remain appropriate for these receivables and hence continues measuring them at amortized cost.
Write-downs in inventories of finished goods, work-in-progress & raw materials amounted to ' 251.35 Million (31 December 2022: ' 267.02 million) as at the period end. Accordingly, an amount of ' 15.65 million (31 December 2022: ' 34 million) was reversed during the year. The write-downs and reversals are included in cost of material consumed.
*Shareholders of the Company had approved reclassification of authorised preference share capital vide EGM held on 13th Oct 2016. Amount is below the rounding off norm adopted by the Company.
AMahindra Composites Limited which was merged with the company in the year 2013 had issued 1,050 equity shares and not allotted the same to the shareholders. Based on the swap ratio the Company has issued 945 equity shares and not allotted the same and the same has been kept in abeyance.
Information regarding issue of shares in the last five years
- The Company has not issued any shares without payment being received in cash.
- The Company has not issued any bonus shares.
- The Company has not undertaken any buy-back of shares
Shares reserved for issue under options
Information relating to CIE Automotive India Limited Employee Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 36.
Nature and purpose of Reserves Securities premium reserve
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of the law.
Equities settled employees' benefits reserve
The Equities settled employees benefits reserve is used to recognize the grant date fair value of options issued to employees under the CIE Stock Options Scheme.
Capital reserve
Capital reserve is reserves generated on account of:
1. Merger under the Integrated Scheme of Amalgamation and the Composite Scheme of Amalgamation (Sections 391-395 of the Companies Act, 1956) for the merger of Mahindra Ugine Steel Company Limited (MUSCO), Mahindra Hinoday Industries Limited (MHIL), Mahindra Gears International Limited (MGIL), Mahindra Investment India Private Limited (MIIPL), Participaciones Internacionales Autometal Tres S.L. (PIA3) and Mahindra Composites Limited (MCL). The merger was approved by the Honourable High Court of Judicature at Bombay on October 31, 2014. The Schemes came into effect on December, 10, 2014, the day on which the order was delivered to the Registrar of Companies. The reserve is capital in nature and is not available for distribution as dividend.
2. Merger under the Scheme of Amalgamation (Sections 230-234 and other applicable provisions of the Companies Act, 2013) of Mahindra Gears and Transmission Private Limited, Mahindra Forging Global Limited, Mahindra Forging International Limited and Crest Geartech Private Ltd. The merger was approved by the Honourable National Company Law Tribunal (NCLT) at Mumbai on December 13, 2017. The reserve is capital in nature and is not available for distribution as dividend.
General reserve
General reserve created by virtue of merger of Mahindra Stokes Holding Company Limited, Mahindra Forgings Overseas Limited and Mahindra Forgings Mauritius Limited into the Company vide High Court Order dated 27th December, 2007, is reserve available for distribution as dividend.
Capital redemption reserve
Capital redemption reserve is transferred by virtue of the merger referred to above, which was in the books of MUSCO and was crea ted to redeem preference shares issued by MUSCO before merg er. These shares ha ve since been redeemed and this reserve is available for use as per the relevant provisions of Companies Act, 2013.
# Provision of ' 262 million is towards an ongoing dispute with the Irrigation Department (Water Resource Department) in respect of levy of charge for use of water for the period July 1991 to May 2012 for an aggregate amount of ' 587 million including penal charge of ' 102 million and late fee charge of ' 223 million. Presently the matter is being legally pursued. The Company has provided ' 262 million towards arrears of water charges. Refer Note 30 Contingent liabilities and commitments.
a Majorly includes provision of ' 120 million (31 December, 2022: ' 120 Million) has been recognised for Provident Fund liability basis Supreme Court judgement in 'Regional provident fund commissioner (ll) West Bengal vs Vivekananda Vidyamandir and Others' in accordance with Ind AS-37. The remaining amount pertains to provision against levy of cross subsidy charges and additional surcharge by Maharashtra State Electricity Distribution Company Limited during the year on account of power consumption from non-captive generating plant.
* This represents provisions made for probable liabilities payable to regulatory authorities. Above provisions are affected by various uncertainties and management has taken all efforts to make a best estimate. It is not practicable for the Company to estimate the accurate timing of cash outflows, if any, in respect of the above.
Financial instrument carried at amortized cost
Fair value of financial assets and financial liabilities carried at amortized cost is not materially different from the carrying amount. This disclosure is not applicable for lease liabilities.
Investments do not include investments in subsidiaries which are carried at cost and hence are not required to be disclosed as per Ind AS 107 Financial Instruments Disclosures.
29. Employee benefits plans
(a) Defined Contribution plan
The Company's contribution to Provident Fund and other funds aggregating ' 150.46 Million (' 128.00 Million) has been recognised in the statement of Profit or Loss under the head Employee Benefit expenses.
(b) Defined benefit plans
(i) Gratuity
The Company operates gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company's scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual
contribution to the Company gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.
(ii) Compensated absences
Company's liability towards leave encashment are determined using the Projected Unit Credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past service costs are recognised on straight line basis over the statement of Profit or loss as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.
(c) Risks
Through its defined benefit plans the Company is exposed to risks, the most significant of which are detailed below:
(i) Asset Volatility
The plan liabilities are calculated using a discount rate set with references to government bond yields; if plan assets under perform compared to the government bond's discount rate, this will create or increase a deficit.
(ii) Changes in Bond Yields
A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the plans' bond holdings.
*Maharashtra State Electricity Distribution Company Limited (MSEDCL) has levied the Cross Subsidy Surcharge (CSS) and Additional Surcharge levied (ASC) on the units of power consumed by the Company as a captive consumer from two Captive Generating Plant (CGP) Units of Sai Wardha Power Generation Limited (SWPGL) which was an independent Special Purpose Vehicle set up for Generation and supply of electricity. The Hon'ble Maharashtra Electricity Regulatory Commission (MERC) vide its separate orders dated October 22, 2020 and October 29, 2020 has rejected the captive status of the said two CGP units of SWPGL for the year 2016-17 and the year 2017-18 respectively. MSEDCL has raised supplementary invoices of ' 208.00 million (including interest) for the year 2016-17 and of ' 263.00 million (including interest) for the year 2017-18 towards alleged Cross Subsidy Surcharge and Additional Surcharge applicable for non-captive power consumption. The Company has challenged the impugned orders before Hon'ble Appellate Authority of Electricity (APTEL). Hon'ble APTEL vide its Order dated November 26, 2021 (APTEL Order) set aside the Orders of MERC and remanded the matter to MERC for fresh determination of captive status based on the opinion expressed in the APTEL Order. MERC vide its Order dated 16th March, 2022 (MERC Remand Order) held Unit 3 and Unit 4 of Sai Wardha Power Generating Limited as captive generating plant for FY 2016-17 and FY 2017-18. MERC further held that 24.73 MUs and 53.53 MUs for FY 2016-17 and FY 2017-18 respectively were injected from the non-captive units and thus unscheduled power. Hence, the Distribution Licensees were directed to treat this unscheduled power in accordance with the applicable provisions of the Electricity Act, 2003 and the relevant Rules and Regulations. However, DISCOMs have filed an appeal against the APTEL Order before Hon'ble Supreme Court of India which is sub-judice. The Company has also filed appeal against the MERC Remand Order for limited issue of the units which were held as Unscheduled Power.
The Hon'ble Maharashtra Electricity Regulatory Commission vide its dated February 09, 2018 in Case No.77 of 2015 for FY 2014-15 and order dated March 19, 2018 in Case No.159 of 2016 for FY 2015-16 (Original MERC Order) had upheld the captive status of the units of SWGPL for those years. However, it had treated the units supplied by SWGPL from other two non-CGP units of SWGPL, as non-contracted power for 2015-16. MSEDCL has accordingly raised a supplementary bill of ' 33 million for the year 2015-16 towards the units supplied by SWGPL from non-CGP units. Thereafter MERC had in its review order, allowed review of the said MERC orders and held that the captive status of SWPGL be redetermined for FY 2014-15 and FY 2015-16. APTEL vide the APTEL Order set aside the Review Order and upheld the Original MERC Orders holding SWPGL as captive for these two years as well. However, DISCOMs have filed an appeal against the APTEL Order before Hon'ble Supreme Court of India. The Company is also contesting the issue of non-CGP units of 2015-16.
During the year, the Hon'ble Supreme Court of India have delivered a common judgment on 9th October, 2023, whereby the Court has elucidated the interpretation of the relevant provisions of the Electricity Act, 2003 and Rule 3 of the Electricity Rules, 2005. The Court has also mentioned that these principles shall be applied to the facts and circumstances of each case. As per the record of proceedings issued separately, the matters will be listed for hearing and disposal before the appropriate Bench of the Court.
** Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgement/decisions pending with various forums/authorities.
Further, the Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in the standalone financial statements. The management believes that the ultimate outcome of above proceeding will not have a material adverse effect on the Company's financial position and results of operations.
36. Employee Stock Option Scheme (ESOS 2007)
The Company instituted the Employees Stock Options Scheme 2007 (ESOS 2007) plan for employees in pursuance of a special resolution passed by the shareholders approving the scheme on July 25, 2007, amended by special resolution dated July 29, 2008, August 02, 2011 and pursuant to the Integrated scheme of Amalgamation and Composite Scheme of Amalgamation in terms of High Court dated October 13, 2014. Further, the Company instituted the Employees Stock Options Scheme 2015 (ESOS 2015) plan for employees in pursuance of a special resolution passed by the shareholders approving the scheme on September 15, 2015
Pursuant to the schemes, the Company has granted options to eligible employees at various exercise prices per equity share of ' 10 each. Under the terms of scheme, the vesting period will be spread equally over 4 years (ESOS 2007) and 3 years (ESOS 2015). Options will vest at 25% (ESOS 2007) and 33% (ESOS 2015) from the grant date. When exercisable, each option is convertible into one equity share of the Company.
38. Additional disclosures required by schedule III
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iv) The Company have not any such 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)
(v) The Company does not have any investments through more than two layer of investment companies as per section 2(87)(d) and section 186 of Companies Act, 2013
(vi) The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the year.
(vii) The Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India.
39. The Company have not advanced or loaned or invested funds to any other person(s) or entity(is), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
40. The Company have not received any fund from any person(s) or entity(is), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
41. The following table summarises the transactions with the companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies Act, 1956 for the year ended / as at December 31, 2023:
42. Secured Loan with only bank of Baroda non fund base for the period was ' 110 million. The quarterly returns or statements filed by the Company for working capital limits with Bank of Baroda banks are in agreement with the books of account of the Company except for statements filed for quarters ended March, 2023/ September, 2023/ March, 2022/ June, 2022 and September, 2022 where differences were noted between the amount as per books of account for respective quarters and amount as reported in the quarterly statements. The differences are due to some of the items where not taken while reporting to banks due to grouping mismatch. The differences were in case of Payables with respect to period ended March, 2023/ September, 2023/ March, 2022/ June, 2022 and September, 2022 are 173.36 million/ 109.60 million/ 652.18 million/ 682.09 million and 941.07 million respectively. For Receivables with respect to period March, 2022 difference was 102.89 million.
43. There are no significant events subsequent to year ended 31 December 2023.
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