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Company Information

Home » Market » Company Information

Force Motors Ltd.

Dec 03, 09:22
1293.55 +11.00 (+ 0.86 %)
 
VOLUME : 381
Prev. Close 1282.55
Open Price 1287.55
TODAY'S LOW / HIGH
1287.20
 
 
 
1298.30
Bid PRICE (QTY.) 1293.60 (26)
Offer PRICE (Qty.) 1296.50 (3)
52 WK LOW / HIGH
1051.35
 
 
 
1740.00
Dec 03, 09:19
1298.00 +17.75 (+ 1.39 %)
 
VOLUME : 2168
Prev. Close 1280.25
Open Price 1288.00
TODAY'S LOW / HIGH
1287.80
 
 
 
1298.00
Bid PRICE (QTY.) 1295.40 (2)
Offer PRICE (Qty.) 1298.00 (187)
52 WK LOW / HIGH
1060.00
 
 
 
1740.00
Company Information Menu

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Market Cap. ( ₹ ) 1710.28 Cr. P/BV 0.93 Book Value ( ₹ ) 1,394.80
52 Week High/Low ( ₹ ) 1740/1060 FV/ML 10/1 P/E(X) 0.00
Bookclosure 28/09/2021 TTM EPS ( ₹ ) -59.27 Div Yield (%) 0.39
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2018-03 

1. THE CORPORATE INFORMATION

Force Motors Limited is a Public Limited Company domiciled and incorporated in India. The Registered Office of the Company is situated at Mumbai-Pune Road, Akurdi, Pune - 411035. The Company’s ordinary shares are listed on the Bombay Stock Exchange.

The Company is a fully, vertically integrated automobile company, with expertise in design, development and manufacture of the full spectrum of automotive components, aggregates and vehicles. Its range of products includes Light Commercial Vehicles (LCV), Multi-Utility Vehicles (MUV), Small Commercial Vehicles (SCV), Sports UtilityVehicles (SUV) and Agricultural Tractors.

(a) Terms / rights attached to Equity Shares

The Company has issued equity shares. All equity shares issued rank pari passu in respect of distribution of dividend and repayment of capital. 1,30,32,914 Equity Shares are quoted equity shares with no restriction on transfer of shares. 27,600 Equity Shares are ‘A’ equity shares, which are transferrable only to permanent employees of the Company. 1,15,748 Equity Shares are Second ‘A’ equity shares which are transferrable to permanent employees, who have put in five years of service with the Company.

(b) 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.

(d) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

(i) The Company is a subsidiary of Jaya Hind Investments Private Limited, which holds 56.86% (31st March 2017 : 56.86%), 74,92,244 (31st March 2017: 74,92,244) shares in the Company.

(ii) Jaya Hind Industries Limited, being associate company of Jaya Hind Investments Private Limited, holds 0.08% (31st March 2017 : 0.08 %) shares in the Company.

The Consortium of Banks has sanctioned Working Capital Limits to the Company. These limits are secured by hypothecation of Company’s stock of raw materials, work-in-progress, finished goods, consumable stores, spares, bills receivable and book debts, both present and future, situated at Company’s factories or at any other place.

The Fund Based Limits, if utilised, are payable on demand to the Banks.

(c) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable agreement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional / unfounded claims are not as per the applicable law northese claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as perthe provisions of Schedule III to the Companies Act, 2013, only to indicate the alleged claims made against the Company and the developments in respect thereof. Moreover, considering the period lapsed, since the conclusion ofthe said legal proceedings, the Company does not expect any impact ofthis litigation on itsfinancial position.

3. DISCLOSURE AS PER THE REQUIREMENT OF SECTION 22 OF THE MICRO, SMALL AND MEDIUM ENTERPRISE DEVELOPMENT ACT, 2006:

As on 31st March 2018, the Company has not received any intimation, except in few cases, as to the status as Micro, Small or Medium Enterprises from suppliers of the Company along with a copy of the Memorandum, filed by the said suppliers, as per the provisions of Section 8 of the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). The proceedings initiated by one of the suppliers, claiming to be a small scale enterprise, as perthe provisions of Section 18 ofthe Act, culminated into an award of claim for Rs.157 Lakhs with interest. The Company has not accepted the said liability. The Company has a major counter-claim against the said supplier amounting to aboutRs.906 Lakhs, which being unearned income, is not accounted. The award is challenged by the Company, as per the provisions of the Act and proceedings are pending before the Hon’ble DistrictJudge, Pune, and beforethe Hon’ble High Court of Judicature at Bombay.

4. FOREIGNEXCHANGEDIFFERENCES

The amount of net exchange differences included in the Profit/Loss for the year on Revenue account isRs.838 Lakhs Debit (31st March 2017: Rs.1,675 Lakhs Credit) and on Capital account isRs.20 Lakhs Credit (31stMarch 2017: Rs.65 Lakhs Credit).

5. EXPENDITURE ON RESEARCH AND DEVELOPMENT

The Company’s expenditure on its research and development activity during the year under report was as follows:

As perthe Indian Accounting Standard (Ind AS 38) - Intangible Assets, the Company has recognized Intangible Assets, arising out of in-house Research and Development activities ofthe Company.

As the development activity, of few projects, is continued, these assets are considered as Capital Work-in-progress, and will be amortized over the period of their life, afterthe completion of the development phase.

6. LEASES

Operating Leases:

(a) Leases as Lessor

(i) Industrial Shed at Chakan :

The Company has entered into a lease agreement for industrial shed at Chakan, Pune, for a period of 10 years. The lessee is entitled to terminate the lease agreement after the expiry of 60 months from the date of agreement. On termination of lease, due to exercise of the option by the Lessee, at the end of 60 months, the Lessee shall be liable to pay a sum of Rs.200 Lakhs. Agreement includes clause to enable upward revision of rental charges according to prevailing market conditions. The Lessor is also entitled to terminate the Lease Agreement, if the Lessee defaults the terms and conditions of the Lease Agreement. The lease income has been recognized in the Statement of Profit and Loss.

(ii) Freehold Land :

Out of the freehold land at Akurdi, Pune;

2700 sq. mtrs. (cost Rs.1,374) of land is given on lease to Maharashtra State Electricity Distribution Company Limited for 99 years, w.e.f. 1st August 1989. Lease rentals are recognized in the Statement of Profit and Loss.

19,000 sq. mtrs. (costRs.9,669) of land is given on lease to Navalmal Firodia Memorial Hospital Trust for 25 years, w.e.f. 12th August 2014. Lease rentals are recognized in the Statement of Profit and Loss.

These land given on lease are not considered as investment property considering the insignifcant area and cost of that with respect tototal area and cost of freehold land at Akurdi, Pune.

(b) Leases as Lessee Leasehold land :

The Company has entered into Lease Agreement for Industrial Land, at Pithampur in Madhya Pradesh for a period of 30 years. The Company, being a Lessee, may surrender the leased area after giving Lessor 3 months notice period in writing. The lease premium is not refundable to Company in case of early termination of agreement bythe Company. The Lessor is also entitled to terminate the Lease Agreement, if the Lessee defaults the terms and conditions of the Lease Agreement. The lease expense has been recognized in the Statement of Profit and Loss.

7. EMPLOYEE BENEFITS

A. Defined Contribution Plans :

An amount ofRs.660 Lakhs (31st March 2017:Rs.648 Lakhs) is recognized as an expense and included in “Employee Benefits Expense” in the Statementof Profitand Loss.

8. FINANCIAL INSTRUMENTS - FAIR VALUES Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities with it’s classification._

The following methods and assumptions were used to estimate the fair values :

The fair values of Trade Payables, Trade Receivables, Cash and Cash equivalents and Other Bank Balances, are reasonable approximation of fair valuedueto the short-term maturities ofthese instruments.

Allowance for credit loss on Trade Receivables, is taken into account, on the basis of credit worthiness ofthe customer individual.

Borrowings of the previous year represents Public Deposits and Commercial Paper obtained at market rates of interest available for debt on similar terms, credit risk and remaining maturities. As of reporting date, the fair value of borrowings is measured at amortized cost, which is reasonable approximation of fair value.

Fair value hierarchy and valuation techniques used

The fair values disclosed in level 2 category are calculated using discounted cash flow method. These fair values reasonably approximate to the carrying values of financial assets and liabilities measured at amortized cost.

During the year ended 31st March 2018, there were no transfers between level 1 and level 2 fair value measurements and no transfers into and out of level 3 fair value measurement.

9. FINANCIALINSTRUMENT

Financial Risk Management Policy and Objectives

The Company’s principal financial liabilities comprise of Trade and Other Payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include Trade and Other Receivables, Cash and Cash equivalents which are derived directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk.

The management of these risks is overseen by the senior management which is advised by a team of senior officials. The Risk Management team oversees the policies and systems, on a regular basis to reflect changes in market conditions and company’s activities and reviews the adequacy of the risk managementframework in relation to the risks faced bythe Company.

The Board of Directors reviews and agrees policies for managing each of these riskis summarized below:

(c) Market Risk: Equity price Risk

Atthe reporting date, the exposure to unquoted equity securities atfair value wasRs.5 Lakhs.

At the reporting date, the exposure to quoted equity securities at fair value wasRs.967 Lakhs. A decrease / increase of 15% on the bank Nifty market index could have an impact of approximately Rs.91 Lakhs on the OCI or equity attributable to the Company. These changes would not have aneffectonprofitorloss.

10. CAPITALMANAGEMENT

The Company’s capital includes issued Equity Capital, Share Premium and Free Reserves.

The Company’s policy is to meet the financial covenants attached to the interest-bearing borrowings / deposit from Public by maintaining a strong capital base. The Company aims to sustain investor, creditor and market confidence so as to be able to leverage such confidence for future capital/debt requirements.

Management monitors the return on capital earned, the capital / debt requirements for various business plans under consideration and determines the level of dividends to equity shareholders.

11. DIVIDEND

The Board of Directors has recommended payment of Dividend of Rs.10 per fully paid Equity Shares (31st March 2017: Rs.10). This proposed dividend is subject to the approval of Shareholders in the ensuing Annual General Meeting. The Company to pay distribution tax ofRs.271 Lakhs on proposed dividend. This dividend andtax on that is not recognized in the books of account at the end of the reporting period.

12. TRANSFERTOINVESTOREDUCATIONAND PROTECTION FUND

All amounts which became due, fortransferto the credit of Investor Education and Protection Fund, as of 31st March 2018, have been transferred to that fund, except a sum ofRs.0.60 Lakh (31st March 2017:Rs.0.60 Lakh) being amount of 5 (31st March 2017:5) fixed deposits and interest thereon amounting to Rs.0.25 Lakh (31st March 2017:Rs.0.25 Lakh). In view of the directives received from the Government Authorities, these amounts are nottransferredto the Fund, being involved in an investigation.

13. During the year under report, on the basis of the eligibility and method of availing various incentives, granted by the Government of Madhya Pradesh, as per the Industrial Promotion Policy, the Company has recognized a sum of Rs.1,830 Lakhs (31st March 2017:Rs.3,146 Lakhs) in the Statement of Profit and Loss as “Industrial Investment Incentives”. These incentives are accounted on accrual basis. These incentives are available as per the Industrial Promotion Policy of the Government of Madhya Pradesh, based on the investment made by the Company, in eligible assets, for eligible products, in the State of Madhya Pradesh. These incentives are monetary incentives.

14. The Company has spentRs.410 Lakhs (31st March 2017:Rs.300 Lakhs) towards Corporate Social Responsibility (CSR), which is shown in “Other Expenses” [Note No.28 (n)] tothe Notesto Financial Statements.

(a) Gross amount required to be spent by the Company duringthe year Rs.410 Lakhs.

(b) Amountspentduringtheyearon:

15. EXCEPTIONALITEMS

Exceptional items of previous year - The Welfare Trust created by the Company has recalled in the month of September, 2016 and accordingly the Trustees of the said trust transferred immovable property, situated at Mahabaleshwar, District Satara, admeasuring 9,408.97 sq. mtrs., to the Company, by Registered Revocation Deed.Rs.95 Lakhs, being the amount contributed by the Company to the said trust, has been recognized as “Exceptional Income” in the year 2016-17 andthe said asset has capitalized.

16. The Company is operating in a Single Segment.

17. Previous year/period’s figures are re-arranged wherever necessary.