two wheeler company, new motorcycles, two wheeler ... · hmc mm auto limited notes to the financial...

For and on behalf of the Board of Directors

Place : Date : m ai t

Niranjan Kum Gupta

Director DIN- 07806792

Arjun Dawan Chief Financial Officer CoMp

Oaju okken

Director D.- 01644940

anka Kliatri ny Secretary

HMC MM AUTO LIMITED Balance Sheet as at 31 March 2017

Amount in Rupees

Note No. As at

31 March 2017 As at

31 March 2016 As at

1 April 2015 ASSETS

NON-CURRENT ASSETS (a) Property, Plant and Equipment 2 145,589,802 138,919,183 141,986,237 (b) Capital Work-in-Progress 641,350 1,618,303 (c) Intangible Assets 3 166,741,745 93,094,424 64,778,416 (d) Intangible Assets Under Development (e) Financial Assets

1,286,183 55,560,458 13,110,283

Other Financial Assets 4 1,606,300 1,782,650 1,782,650 (f) Other Non-current Assets 5 19,416,809 208,269 1,663,909

SUB-TOTAL 334,640,839 290,206,334 224,939,798

CURRENT ASSETS (a) Inventories (b) Financial Assets

(i) Investments

6

7

27,553,041

32,144,954

12,656,729

24,632,373

4,903,493

74,247,650 (ii) Trade Receivables 8 40,563,928 668,329 288,318 (iii) Cash and Cash Equivalents 9 293,185 609,405 8,717,808 (vi) Other Financial Assets 4 119,695 606,500 293,500

(c) Other Current Assets 5 18,932,384 28,936,579 20,812,832

SUB-TOTAL 119,607,187 68,109,915 109,263,601 TOTAL ASSETS 454,248,026 358,316,249 334,203,399

EQUITY AND LIABILITIES

EQUITY (a) Equity Share Capital 10 384,500,000 214,500,000 214,500,000 (b) Other Equity 10A (221,519,577) (89,949,259) (34,238,218)

SUB-TOTAL 162,980,423 121,550,741 180,261,782

LIABILITIES

NON-CURRENT LIABILITIES (a) Financial Liabilities

Borrowings 11 79,444,440 108,333,332 120,000,000 (b) Provisions 12 3,204,837 2,043,712 766,951 SUB-TOTAL 82,649,277 110,377,044 120,766,951

CURRENT LIABILITIES (a) Financial Liabilities

(i) Borrowings 13 116,831,704 37,251,585 (ii) Trade Payables 14 43,159,943 18,589,945 13,104,202 (iii) Other Financial Liabilities 15 40,014,640 57,677,305 15,817,844

(b) Provisions 12 3,221,653 1,440,457 1,269,204 (c) Other Current Liabilities 16 5,390,386 8,419,172 2,983,416

SUB-TOTAL 208,618,326 123,388,464 33,174,666 TOTAL 454,248,026 358,316,249 334,203,399

The accompanying notes 1 to 38 are an integral part of the Financial Statements

In terms of our report attached For Deloitte Haskins & Sells Chattered Accountants

4\-(1./\ NA, 'Ne -7•k

Jaideep Bhargava

Partner

Place : 4u^(3o-NA-\ Dat.er\Acti 2,

HMC MM AUTO LIMITED

Statement of Profit and Loss for the year ended 31 March 2017

Amount in Rupees

Particulars Note No. For the year ended 31 March 2017

For the year ended 31 March 2016

I Revenue from operations 17 217,296,396 1,014,745

II Other Income 18 10,243,624 5,384,723

III Total Revenue (I + II) 227,540,020 6,399,468

IV EXPENSES

(a) Cost of materials consumed 19(a) 115,950,777 3,073,451

(b) Purchases of Stock-in-trade 25,620,002 - (c) Changes in stock of finished goods, work-in-progress and stock- 19(b) (4,231,400) (1,828,500) (d) Employee benefit expense 20 73,678,028 38,341,927 (e) Finance costs 21 19,303,473 17,545,358 (f) Depreciation and amortisation expense 2, 3 33,647,310 17,792,084 (g) Other expenses 22 58,431,849 23,317,837

V Total Expenses 322,400,039 98,242,157 VI Profit/(loss) before tax (III - V) (94,860,019) (91,842,689) VII Tax Expense - VIII Profit/(loss) after tax (VI - VII) (94,860,019) (91,842,689) IX Other comprehensive income

Items that will not be re-classified to profit or loss

Remeasurements of the defined benefit plans (512,960) 131,648 X Total comprehensive income for the year (VIII + IX) (95,372,979) (91,711,041)

XI Earnings per equity share :

(1) Basic 23 (2.79) (4.28) (2) Diluted 23 (2.79) (4.28)

In terms of our report attached For and on behalf of the Board of Directors For Deloitte Haskins & Sells Cha ered Accountants

■

/\ CV\ ClAlTh‘ Jaideep Bhargava y Niranjan Kum r A U Saju ookken Partner Director , , Director

DIN- 07806792 IN- 01644940

•

NEW DELHI -,

A-,:i c, ,... ii.., -,_,

Arjil Dewan P iicnka Khatri

Chief Financial Officer Company Secretary

Place : (-IVY-P-8'4" Place : Nekol Date : /1/411,azL- 7/0 n--- Date : McL44 -

HMC MM AUTO LIMITED Statement of Cash flows for the year ended 31 March 2017

Amount in Rupees

Particulars 31 March 2017 31 March 2016 For the year ended For the year ended

Cash flows from operating activities Profit before tax for the year (94,860,019) (91,842,689) Adjustments for:

Finance costs 19,303,473 17,545,358 Net gain on sale of investment (1,917,573) (6,169,976) Gain on discard of property, plant and equipment (2,984,044) Net (gain)/loss arising on financial assets mandatorily measured at FVTPL (1,595,008) 785,253 Depreciation and amortisation 33,647,310 17,792,084

(48,405,861) (61,889,970)

Movements in working capital: (Increase)/decrease in trade receivables (39,895,599) (380,011) (Increase)/decrease in inventories (14,896,312) (7,753,236) (Increase)/decrease in other non current assets (18,138,304) 3,000 (Increase)/decrease in other assets 12,122,099 (8,123,747) (Increase)/decrease in other financial assets 663,155 (313,000) Increase/(Decrease) in trade and other payables 24,569,998 5,485,743 Increase/(Decrease) in short term provisions 1,781,196 171,253 Increase/(Decrease) in long-term provisions 648,165 1,408,409 Increase/(Decrease) in other liabilities 74,776 3,546,004

Cash generated from operating activities (81,476,687) (67,845,555) Income taxes paid (2,117,904)

Net cash used in by operating activities (83,594,591) (67,845,555)

Cash flows from investing activities

Payments to acquire financial assets (20,000,000) Proceeds from sale of financial assets 16,000,000 55,000,000 Capital expenditure on fixed assets, including capital advances (102,071,576) (60,979,540) Proceeds from discard of property, plant and equipment 16,435,000

Net cash used in by investing activities (89,636,576) (5,979,540)

Cash flows from financing activities

Proceeds from issue of equity instruments of the Company 134,000,000 36,000,000 Equity Share Issuance Costs (197,339) Proceeds from borrowings 79,570,119 47,261,585 Repayment of borrowings (21,666,669) Interest paid (18,791,164) (17,544,893)

Net cash generated by financing activities 172,914,947 65,716,692

Net increase in cash and cash equivalents (316,220) (8,108,403)

Cash and cash equivalents at the beginning of the year 609,405 8,717,808

Cash and cash equivalents at the end of the year 293,185 609,405

In terms of our report attached For Deloitte Haskins & Sells For and on If of he :oard of Dir ctors Ch rt red Accountants

Tk ( \,--■ c C'1,---1, --r- Jaideep Bhargava Niranjan Kum. Gupta Saju ookken Partner A ti /.,:. , Director Director

C". Ci \ DIN- 07806792 N 01644940

(...) 1 NEW DELHI \ 1,_ . ,c-,_,

, At ,, l-,

'Si • C) Arjun Dewan Pr\y1k Khatri Chief Financial Officer Company S retary

CI ■_' v , Place : 1' • Place : i\-1,...; 0 cak,. Date : V‘ACui 9 , 2<)1 )-- Date : 8`1c'.,„ 1_ , 1-,1 1-

HMC MM AUTO LIMITED Statement Of Changes In Equity for the year ended 31 March 2017

A. Equity share capital

As at 1 April 2015 Changes in equity share capital during the year As at 31 March 2016 Changes in equity share capital during the year

Issue of share capital (refer note -10) As at 31 March 2017

B. Other Equity

Amount in Rupees

214,500,000 -

Amount in Rupees

214,500,000

170,000,000 384,500,000

Particulars

Share application

money pending

allotment*

Reserves and Surplus

Items of other

comprehensive

income Total

Retained Earnings

Actuarial Gain / (Loss)

As at 1 April 2015 - (34,238,218) - (34,238,218) Profit / (Loss) for the year (91,842,689) (91,842,689) Other Comprehensive Income / (Loss) 131,648 131,648 Total Comprehensive Income for the year (91,842,689) 131,648 (91,711,041) Share application money pending allotment * 36,000,000 36,000,000 As at 31 March 2016 36,000,000 (126,080,907) 131,648 (89,949,259) Profit / (Loss) for the year (94,860,019) (94,860,019) Other Comprehensive Income / (Loss) (512,960) (512,960) Total Comprehensive Income for the year (94,860,019) (512,960) (95,372,979) Equity Share Issuance Costs - (197,339) (197,339) As at 31 March 2017 - (221,138,265) (381,312) (221,519,577)

Remeasurment gain / loss (net) on defined benefit plans Rs. 5,12,960 loss (previous other comprehensive income.

* Notes: a. Number of equity shares of Rs. 10 each proposed to be issued (Nos)

b. Equity share capital proposed to be issued (Rs.)

c. The Company has sufficient authorised equity share capital to cover the share as of March 31,2016.

d. No shares are pending for allotment beyond the maximum period of allotment

In terms of our report attached For Deloitte Haskins & Sells C rtered Accountants

year Rs.1,31,648

capital amount

as of March 31,2017.

For an beh

Niranjan Kum -r Director DIN- 07806792

.., rt, ------(--,_ Ariusewan Chief Financial Officer

,i‘ • Place : Nt..,...: - t.(_-

Date : 1" ,A.--I '7 /

gain) is recognised

on allotment of shares

If o he Board of

Gupta

-,,,,

during the year

Year ended 31 March 2017

-

out of the share

Directors

as a part of

Year ended 31 March 2016

3,600,000

36,000,000

application money

S Moo :fen 'rector

1644940

kkv1 nka Khatri

Compt Secretary s

Jaideep Bhargava Partner

Place : L v(e-fs---- Date : il■-, ,,, "LI 1,--01 -'1"

lk, -

101 3-

HMC MM AUTO LIMITED

Notes to the financial statements for the year ended 31 March 2017

1. CORPORATE INFORMATION

HMC MM Auto Limited (the Company) is a public company domiciled in India and incorporatedunder the provisions of the Companies Act, 1956 on November 11, 2013 with the objective to design, develop, manufacture, distribute, assemble, buy and sell electronic fuel injection systems and related components and sub-assemblies. It is a joint venture between Hero MotoCorp Limited and MagnetiMarelli S.p.A.

SIGNIFICANT ACCOUNTING POLICIES

a. Statement of Compliance

The financial statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015.

Upto the year ended March 31, 2016, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are Company's first Ind AS financial statements. The date of transition to Ind AS is April 1, 2015.

b. Basis of preparation and presentation

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

1. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

2. Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

3. Level 3 inputs are unobservable inputs for the asset or liability.

c. Property, plant and equipment

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed

assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance. Fixed assets acquired and put to use for project purpose are capitalised and depreciation thereo the project cost till commissioning of the project.

HMC MM AUTO LIMITED


Capital work-in-progress:

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried

at cost, comprising direct cost, related incidental expenses and attributable interest.

Pre-operative expenditure (pending allocation) Expenses directly related to construction activity or incidental thereto, are allocated to fixed assets at the time

of completion of the project.

Intangible Assets

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated

amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their

estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each

reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated

impairment losses.

Internally-generated intangible assets - research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an

internal project) is recognised if, and only if, all of the following have been demonstrated:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale

• The intention to complete the intangible asset and use or sell it;

• The ability to use or sell the intangible asset;

• How the intangible asset will generate probable future economic benefits;

• The availability of adequate technical, financial and other resources to complete the development and to use

or sell the intangible asset; and

• The ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred

from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-

generated intangible asset can be recognised, development expenditure is recognised profit or loss in the

period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated

amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired

separately.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or

disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between

the net disposal proceeds and the carrying amount of the asset, and are recognised in profit or loss when the

asset is derecognised.

Intangible assets under development

Expenditure on Research and development eligible for capitalisation are carried as Intangible assets under

development where such assets are not yet ready for their intended use.Revenue expenditure pertaining to

research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the

Statement of Profit and Loss unless a product's technological feasibility has been established, in which case such

expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or

allocated on a reasonable and consistent basis to creating, producing and making the asset r `Cti‘fa ordan

qti - \ /

with the policies stated for Fixed Assets C_) intended use. Fixed assets utilised for research and development are capitalised and depreciated '

The carrying values of assets / cash generating units at each Balance Sheet d e e r viewed for i 'A

EcLefil t0

—4 0

Assets type Useful life

Plant and Machinery

Furniture and Fittings

Electrical Installation

Tool,Dies and Jigs

Office Equipment

Computers and Hardware

Servers and network

Vehicle

15 years

10 years

10 years

8 years

5 years

3 years

6 years

10 years

HMC MM AUTO LIMITED


d. Depreciation and amortisation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated

residual value.

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life

prescribed in Schedule II to the Companies Act, 2013 which are as follows

Intangible assets are amortised over their estimated useful life on straight line method as follows:

Technical know how 10 years

Computer software

5 years

Product development

5 years

The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each

financial year and the amortisation period is revised to reflect the changed pattern, if any.

e. Impairment of tangible and intangible fixed assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the

impairment loss (if any). Recoverable amount is the higher of fair value less costs of disposal and value in use. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash

flows have not been adjusted.

When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash- generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or

otherwise they are allocated to the smallest Company of cash-generating units for which a reasonable and

consistent allocation basis can be identified.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,

the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss. When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount,

but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior ye.arAt:r:-

A,

reversal of an impairment loss is recognised immediately in profit or loss.

2

HMC MM AUTO LIMITED


f. Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for

rebates and other similar allowances.

Sale of goods

Revenue from the sale of goods is recognised when the goods are dispatched and titles have passed, at which

time all the following conditions are satisfied:

• The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

• The Company retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the Company; and

• The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised by reference to the stage of completion of the

contract. Servicing fees included in the price of products sold are recognised by reference to the proportion of

the total cost of providing the servicing for the product sold.

Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to

the Company and the amount of income can be measured reliably. Interest income is accrued on, time basis, by

reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly

discounts estimated future cash receipts through the expected life of the financial asset to that asset's net

carrying amount on initial recognition.

g. Inventories

Raw materials and components, stores and spares, loose tools, finished goods and work in progress are valued

at cost or net realisable value, whichever is lower.

The basis of determining cost for various categories of inventories is as follows:-

Stores and spares, loose tools, raw materials and

components

Moving weighted average cost

Materials in transit Actual cost

Work in progress and finished goods Material cost plus appropriate share of labour, manufacturing overheads and excise duty

h. Foreign currency transactions and translations

Exchange differences are dealt with as follows:-

Transactions in foreign currency are recorded at the exchange rate prevailing at the time of the transaction. All

loss or gain on translation is charged to revenue in the period in which it is incurred.

Monetary assets and liabilities denominated in foreign currency are restated at the rate prevailing at the year

end and resultant gain or loss is recognized.

HMC MM AUTO LIMITED


i. Employee Benefits

Retirement Benefit

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected

unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-

measurement, comprising actuarial gains and losses, is reflected immediately in the balance sheet with a charge

or credit recognised in other comprehensive income in the period in which they occur. Re-measurement

recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified

to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest

is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or

asset. Defined benefit costs are categorised as follows:

• Service cost (including current service cost, past service cost, as well as gains and losses or curtailments and

settlements);

• Net interest expense or income; and

• Re-measurement The Company presents the first two components of defined benefit costs in profit or loss in the line item

'Employee benefits expense'. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the

Company's defined benefit plans.

Short-term and other long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, in the period the

related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that

service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of

the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other long-term employee benefits such as annual leave and sick leave are

measured at the present value of the estimated future cash outflows expected to be made by the Company in

respect of services provided by employees up to the reporting date

j. Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and

rewards of ownership to the lessee. All other leases are classified as operating leases. Rental expense from

operating leases is generally recognised on a straight line basis over the term of relevant lease. Where the

rentals are structured solely to increase in line with expected general inflation to compensate for the lessor's

expected inflationary cost increase, such increases are recognised in the year in which such benefits accrue.

Contingent rentals arising under operating leases are recognised as an expense in the period in which they are

incurred

k. Earnings per share

Basic earnings per share are computed by dividing the profit after tax by the weighted average number of

equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit after

tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential

equity shares, by the weighted average number of equity shares considered for deriving basic earnings per

share and the weighted average number of equity shares which could have been issued on the conversion of all

dilutive potential equity shares.

I. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

C.) NEW DELHI —

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax' as

reported in the statement of profit and loss because of items of income or expense that are taxable or

HMC MM AUTO LIMITED


deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax is recognised, subject to the consideration of prudence on timing differences, being the deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from

the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset

to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or

substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the

business combination.

m. Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can

be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Warranties

Provisions for the expected cost of warranty obligations under local sale of goods legislation are recognised at

the date of sale of the relevant products, at the management's best estimate of the expenditure required

settle the Company's obligation.

HMC MM AUTO LIMITED


n. Operating Cycle

The Company has determined its operating cycle as 12 months for the purpose of classification of its assets and

liabilities as current and non-current.

o. Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual

provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly

attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and

financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the

financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly

attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are

recognised immediately in profit or loss.

p. Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value,

depending on the classification of the financial assets.

Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for

debt instruments that are designated as at fair value through profit or loss on initial recognition):

• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash

flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of

principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other

comprehensive income ("FVTOCI") (except for debt instruments that are designated as at fair value through

profit or loss on initial recognition):

• the asset is held within a business model whose objective is achieved both by collecting contractual cash flows

and selling financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of

principal and interest on the principal amount outstanding.

Interest income is recognised in profit or loss for FVTOCI debt instruments.

All other financial assets are subsequently measured at fair value.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of

allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts

estimated future cash receipts (including all fees and points paid or received that form an integral part of the

effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt

instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets

classified as at FVTPL. Interest income is recognised in profit or loss and is included in the "Other income" line

item.

HMC MM AUTO LIMITED


Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial

recognition to present subsequent changes in fair value in other comprehensive income for investments in

equity instruments which are not held for trading.

Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In

addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated as at

FVTPL are measured at FVTPL.

A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may

be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a

measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising

the gains and losses on them on different bases. The Company has not designated any debt instrument as at

FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses

arising on re-measurement recognised in profit or loss. The net gain or loss recognised in profit or loss

incorporates any dividend or interest earned on the financial asset and is included in the 'Other income' line

item. Dividend on financial assets at FVTPL is recognised when the Company's right to receive the dividends is

established, it is probable that the economic benefits associated with the dividend will flow to the entity, the

dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be

measured reliably.

Impairment of financial assets

The Company applies the expected credit loss model for recognising impairment loss on financial assets

measured at amortised cost, debt instruments at FVTOCI, trade receivables, other contractual rights to receive

cash or other financial asset, and financial guarantees not designated as at FVTPL.

Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as

the weights.

De recognition of financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire,

or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to

another party.

q. Financial liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments issued by Company are classified as either financial liabilities or as equity in

accordance with the substance of the contractual arrangements and the definitions of a financial liability and an

equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting

all of its liabilities.

Financial liabilities

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at,anlOrti4illi, cost at the end of subsequent accounting periods. The carrying amounts of financial liabili at are 0 subsequently measured at amortised cost are determined based on the effective interest met Z I terDesEtLHI (--

expense that is not capitalised as part of costs of an asset is included in the 'Finance cysts' Line ite 2 --I .C:7

V

HMC MM AUTO LIMITED


The effective interest method is a method of calculating the amortised cost of a financial liability and of

allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts

estimated future cash payments (including all fees and points paid or received that form an integral part of the

effective interest rate, transaction costs and other premiums or discounts) through the expected life of the

financial liability. All financial liabilities are subsequently measured at amortised cost using the effective interest method or at

FVTP L.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged,

cancelled or have expired.

r. First-time adoption - mandatory exceptions, optional exemptions

Overall principle

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2015 (the transition date) by

recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or

liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required

under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is

subject to the following exceptions availed by the Company as detailed below:

Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the

amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the

transition date.

s. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company accounting policies, the management of the Company is required to make

judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily

apparent from other sources. The estimates and associated assumptions are based on historical experience and

other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognised in the period in which the estimate is revised if the revision affects only that period or in the

period of the revision and future periods if the revision affects both current and future periods.

The following are the areas of estimation uncertainty and critical judgements that the management has made in

the process of applying the Company's accounting policies and that have the most significant effect on the

amounts recognised in the financial statements:-

Recoverability of intangible asset

During the year, the Company assessed the recoverability of the intangible assets under development.

Capitalisation of cost in intangible assets under development is based on management's judgement that

technological and economic feasibility is confirmed and asset under development will generate economic

benefits in future. This situation is closely monitored, and adjustments made in future periods if future market

activity indicates that such adjustments are appropriate.

Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of such

obligation are determined using actuarial valuations. An actuarial valuation involves making various

assumptions that may differ from actual developments in the future. These include the determination of the

discount rate, future; salary increases, mortality rates and future pension increases. Due to the complexities

involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in

these assumptions. All assumptions are reviewed at each reporting date.

HMC MM AUTO LIMITED


Useful lives of depreciable assets

Management reviews the useful lives of depreciable assets at each reporting date. As at March 31, 2017

management assessed that the useful lives represent the expected utility of the assets to the Company. Further,

there is no significant change in the useful lives as compared to previous yea

HMC MM AUTO LIMITED Notes to the financial statements for the year ended 31 March 2017

Note No. 2 - Property, Plant and Equipment

Amount in Rupees

Description of Assets Plant and Equipment

Office Equipment

Furniture and Fixtures

Computers and Data processing

eauloment

Tools, Jigs & Fixtures


Vehicles Total

I. Gross Carrying Amount

Balance as at 1 April 2016 131,342,704 920,745 769,699 5,552,892 6,260,489 7,423,937 74,170 152,344,636

Additions 18,659,011 131,067 870,182 884,892 11 741,763 56,961 15,000 32,358,876

Discards 10,101.000 6,214,012 16,315,012

Balance as at 31 March 2017 139.900,715 1,051.812 1,639,881 6,437.784 11,788.240 7.480,898 89,170 168,388,500

II. Accumulated depreciation and impairment Balance as at 1 April 2016 9,838,055 312,640 83,805 1,676,158 746,069 763,166 5,560 13,425,453 Depreciation expense for the year 8,786,198 179,834 100,247 1,322,196 1,135,116 706,387 7,323 12,237,301 Eliminated on discard of assets 1,400,345 - 1,463,711 2,864,056 Balance as at 31 March 2017 17,223,908 492,474 184,052 2,998,354 417,474 1,469,553 12,883 22,798,698

III. Net carryinoti (it I-II) 122,676,807 559,338 1,455,829 3,439,430 11,370,766 6,011,345 76,287 145,589,802

Amount in Rupees

Description of Assets Plant and

Equipment Office

Equipment Furniture and

Fixtures Computers and Data processing

eauinment

Tools, Jigs & Fixtures


Vehicles Total

I. Gross Carrying Amount Balance as at 1 April 2015 127,540,699 827,697 639,627 5,276,971 4,912,108 5,211,041 144,408,143

7,936,493 Additions 3.802.005 93,048 130,072 275,921 1,348.381 2.212,896 74,170

Balance as at 31 March 2016 131.342.704 920.745 769.699 5,552.892 6.260.489 7.423,937 74,170 152,344,636

II. Accumulated depreciation and impairment Balance as at 1 April 2015 1,660,175 137,206 12,754 468,966 57,958 84,847 2,421,906

11,003,547 Depreciation expense for the year 8,177,880 175,434 71,051 1,207,192 688,111 678,319 5,560 Balance as at 31 March 2016 9,838,055 312,640 83,805 1,676,158 746,069 763,166 5,560 13,425,453

III. Net carrying amount (I-II) 121,504,649 608,105 685,894 3,876,734 5,514,420 6,660,771 68,610 138,919,183


Note No. 3 - Intangible Assets Amount in Rupees

Description of Assets Technical Knowhow

Product Development

Computer Software

Total

I. Gross Carrying Amount Balance as at 1 April 2016 99,982,160 - 1,382,022 101,364,182 Additions from separate acquisitions 36,130,260 58,927,070 - 95,057,330 Balance as at 31 March 2017 136,112,420 58,927,070 1,382,022 196,421,512

II. Accumulated depreciation and impairment Balance as at 1 April 2016 7,861,991 407,767 8,269,758 Amortisation expense for the year 11,156,364 9,977,241

9,977,241 276,404

684,171 21,410,009 29,679,767 Balance as at 31 March 2017 19,018,355

III. Net carrying amount (I-II) 117,094,065 48,949,829 697,851 166,741,745

Amount in Rupees

Description of Assets Technical Knowhow

Product Development

Computer Software

Total

Intangible Assets Gross Carrying Amount Balance as at 1 April 2015 64,991,555 1,268,082 66,259,637 Additions from separate acquisitions 34,990,605 - 113,940 35,104,545 Balance as at 31 March, 2016 99,982,160 1,382,022 101,364,182

II. Accumulated depreciation and impairment Balance as at 1 April 2015 1,335,443 - 145,778 1,481,221 Amortisation expense for the year 6,526,548 261,989 6,788,537 Balance as at 31 March, 2016 7,861,991 - 407,767 8,269,758

III. Net carrying amount (I-II) 92,120,169 - 974,255 93,094,424


Note No. 4 - Other financial assets

Amount in Rupees

Particulars As at 31 March 2017 As at 31 March 2016 As at 1 April 2015

Financial assets at amortised cost

Security Deposits

Current Non- Current Current Non- Current Current Non- Current

119,695 1,606,300 606,500 1,782,650 293,500 1,782,650

119,695 1,606,300 606,500 1,782,650 293,500 1,782,650

Refer Note 24 for disclosures related to credit risk, impairment under expected credit loss model and related financial instrument disclosures.

Note No. 5 - Other assets- Current and Non-Current

Particulars As at 31 March 2017 As at 31 March 2016 ....______

As at 1 April 2015 Current Non- Current Current Non- Current Current Non- Current

(a) Capital advances (i) For Capital work in progress 1,094,531 118,405 1,654,544 (ii) For intangible asset under development 177,609 83,499

(b) Advances other than capital advances (i) Advances to Employees 5,500 - 91,709 19,363 (ii) Balances with government authorities (other than

income taxes) 15,800,000 18,139,804 28,075,627 20,215,813 - (iii) Advance Tax 2,117,904 - - (iv) Prepaid Expenses 720,689 4,865 558,339 6,365 289,758 9,365 (v) Other Advances 288,291 - 210,904 287,898

18,932,384 19,416,809 _ 28,936,579 208,269 _ 20,812,832 _ 1,663,909

I I I Note: Short-term loan and advances include amount due

from Magneti Marelli India Pvt. Ltd.

(Private Company in which director is a director)

218,491


Note No. 6 - Inventories

Amount in Rupees

Particulars As at

31 March 2017 As at

31 March 2016 As at

1 April 2015

(a) Raw materials 21,244,989 10,700,581 4,584,609 (b) Work-in-progress 1,160,507 1,828,500 (c)Finished goods 2,955,401 - (d) Stock-in-trade of goods acquired for trading 1,943,992 - (e) Stores and spares 248,152 127,648 318,884

Total Inventories (at lower of cost and net realisable value) 27,553,041 12.656:724 4,903,493

Note No. 7 - Investments

Amount in Rupees

Particular

As at 31 March 2017 As at 31 March 2016 As at 1 A 'Hi 2015

QTY Amounts QTY Amounts QTY Amounts

Current Current Current Designated as Fair Value Through Profit and Loss

(FVTPL)

Unquoted Investments (all fully paid) Investments in Mutual Funds

ICICI Prudential Flexible Income Plan Direct Growth

Reliance Mutual Fund - direct growth plan

Total Unquoted Investments

INVESTMENTS CARRIED AT FVTPL Of the above, investments designated as FVTPL

Total investments carried at fair value

66,571.04

4,979.79

20,808,358

11,336,596

49,519.26

4,979.79

14,819,859

9,812,514

112,284.00

23,151.00

30,196,102

44,051,548

71,550.83 32,144,954 54,499.05 24,632,373 135,435.00 74,247,650

I I I 71,550.83 135,435.00 74,247,650 71,550.83

32,144,9541 54,499.051 24,632, 373

32,144,954 54,499.05 24,632,3731 135,435.00 74,247,650

71,550.83 32,144,9541 54,499.051 24,632,3731 135,435.00 74,247,650

.\,0,j\ A (i ?so

2 NEW DELHI

HMC MM AUTO LIMITED Notes to the financial statements for the year ended 31

Note No. 8 - Trade receivables _ Amount in Rupees

Particulars As at

31 March 2017 As at

31 March 2016 As at

1 April 2015

Trade receivables Unsecured, considered good

Total

Of the above, trade receivables from: - Related Parties - Others

Total

Current Current Current

40,563,928 668,329 288,318 40,563,928 668,329 288,318

34,910,008 5,653,920

668,329 -

288,318 -

40,563,928 _ 668,329 288,318

I I

Note No. 9 - Cash and cash equivalents Amount in Rupees

Particulars As at

31 March 2017 As at

31 March 2016 As at

1 April 2015

Cash and cash equivalents (a) Balances with banks (b) Cash on hand

Total Cash and cash equivalents

292,279 906

551,699 57,706

8,649,774 68,034

293,185 609,405 8,717,808

I I

A Co\ (C)

NEW DELHI r-I y7


Note No. 10 - Equity Share Capital

Particulars As at 31 March 2017 As at 31 March 2016 As at 1 AprII 2015

No. of shares Amount in Rupees No. of shares Amount in Rupees No. of shares Amount in Rupees

Authorised: Equity shares of Rs. 10 each with voting rights

Issued. Subscribed and Fully Paid: Equity shares of Rs. 10 each with voting

rights

Total

50,000,000

38,450,000

500,000,000

384,500,000

50,000,000

21,450,000

500,000,000

214,500,000

50,000,000

21,450,000

500,000,000

214,500,000

38,450,000 384,500,000 21,450,000 214,500,000 21,450,000 214,500.000

(i) Reconciliation of the number of shares outstanding at the beginning and at the end o the period. Amount in Rupees

Opening Balance Fresh Issue Closing Particulars

(a) Equity Shares with Voting rights*

Balance

Year Ended 31 March 2017 No. of Shares 21,450,000 17,000,000 38,450,000

Amount 214,500,000 170,000,000 384.500,000

Year Ended 31 March 2016 No. of Shares 21,450,000 21,450,000

Amount 214,500,000 214,500,000

Year Ended 1 April 2015 No. of Shares 21,450,000 21,450,000

Amount 214,500,000 214,500,000

(ii) Rights, preferences and restrictions attached to equity shares The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to approval of the shareholders in the ensuing annual general meeting. Further, the Board of Directors may also announce an interim dividend which would need to be confirmed by the shareholders at the forthcoming Annual General Meeting. In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(iii) Details of shares held by the holding company, the ultimate holding company, their subsidiaries and associates:

Particulars

No. of Shares Equity Shares with

Voting rights

As at 31 March 2017 Hero MotoCorp Limited, the Holding Company 23,069,993

As at 31 March 2016 Hero MotoCoro Limited, the Holding Company 12,869,993

As at 1 April 2015 Hero MotoCorp Limited, the Holding Company 12,869,993

(iv) Details of shares held by each shareholder holding more than 5% shares:

Class of shares / Name of shareholder

As at 31 March 2017 As at 31 March 2016 As at 1 April 2015

Number of shares held

% holding in that class of shares





Equity shares with voting rights Hero MotoCorp Limited Magneti Marelli S.p.A

23,069,993 15,380,001

60 40

12,869,993 8,580,001

60 40

12,869,993 8,580,001

60 40

Note No. 10A Other Equity Amount in Rupees

Particulars As at 31 March

2017 As at 31 March 2016 As at

1 April 2015 (a) Reserves and surplus

Retained Earnings (221,138,265) (126,080,907) (34,238,218)

(b) Share application money pending allotment 36,000,000

(c) Other equity (381,312) 131,648 -

Total (221,519.577) (89.949.259) (34 238,218)


Note No. 11 - Non-Current Borrowings Amount in Rupees

Particulars Rate of Interest

Maturity As at 31 March

2017

As at 31 March 2016

As at 1 April 2015

Unsecured Borrowings - at amortised Cost Term Loans

From Banks *

Total Unsecured Borrowings

Total Borrowings

Amount Amount Amount

Bank base rate + 50 basis 'points

7 December,2020 79,444,440 108,333,332 120,000,000

79,444,440 108,333,332 120,000,000

I 79,444,440 108,333,332 120,000,000

I I I

* Repayable in 18 quarterly installments starting with effect from 07 September, 2016, last installment due on 07 December, 2020. Rate of Interest -Bank base rate + 50 basis points. The Company has not defaulted in repayment of term loan and interest thereon.(Refer note 15)

Note No. 12 - Provisions Amount in Rupees


(a) Provision for employee benefits Long-term Employee Benefits

Provision for compensated absences Provision for Gratuity

(b) Other Provisions Warranty

Total Provisions

Current Non- Current Current Non- Current Current Non- Current

693,975 1,672,992

854,686

1,371,447 1,833,390

425,832 1,014,625

922,299 1,121,413

-

259,380 1,009,824

-

110,739 656,212

3,221,653 3,204,837 1,440,457 2,043,712 1,269,204 766,951

I I I I


Note No. 13 - Current Borrowings Amount in Rupees


Unsecured Borrowings Loans repayable on demand

From Banks Total Unsecured Borrowings

Total Current Borrowings

.116,831,704 116 831 704 _

37,261,585 - 3,7 261,585

116,831,704 37,261,585 - I I

Note No. 14 - Trade Payables Amount in Rupees


Current Current Current

Trade payable - Micro and small enterprises Trade payable - Other than micro and small enterprises

Total trade payables

- 43,159,943

- 18,589,945 13,104,202

43,159,943 18,589,945 13,104,202

I I

Trade Payables represent the amount due on account of goods purchased or services received in the normal course of business. Company's credit risk management processes are explained in Note 24.

According to the records available with the Company, dues payable to entities that are classified as Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 during the year is Rs. Nil (previous year Rs. Nil). Further, no interest has been paid or was payable to such parties under the said Act during the year. Dues to Micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Company. This information has been relied upon by the auditors.

Note No. 15 - Other Financial Liabilities Amount in Rupees


Other Financial Liabilities Measured at Amortised

I

Cost Current (a) Current maturities of long-term debt * 28,888,891 21,666,668 - (b) Interest accrued but not due on borrowings (c) Other liabilities

(1) Creditors for capital supplies/services

547,295

2,893,876

34,986

31,072,338

34,521

9,312,555

(2) Retention Money - 322,297

(3) Security Deposits 300,000 350,000 250,000

(4) Employee Benefits Payable 7,384,578 4,231,016 6,220,768

Total other financial liabilities 40,014,640 57,677,30A 15,817,844

* Refer note 11 I

Note No. 16 - Other Current Liabilities Amount in Rupees


Statutory dues - taxes payable - Employee Recoveries and Employer Contributions

Total Other Current Liabilities

4,896,126 494,260

7,961,169 458,003

2,633,283 350,133

5,390,386 8,419,172 2,983,416

j NEV ELHI C:1)

HMC MM AUTO LIMITED Notes to the consolidated financial statements for the year ended 31 March 2017

Note No. 17 - Revenue from Operations

Amount in Rupees

Particulars For the year

ended 31 March 2017

For the year ended

31 March 2016

(a) Revenue from sale of products (including excise duty) Manufactured Products 191,969,686 1,014,745 Sale of Traded Goods

(b) Other operating revenue 25,312,398 -

Scrap Sales 14,312 Total Revenue from Operations 217,296,396 1,014,745

I

Note No. 18 - Other Income Amount in Rupees


ended 31 March 2017

For the year ended

31 March 2016 (a) Net Gain / (Loss) on sale of investments 1,917,573 6,169,976 (b) Forex gain/loss(net) 3,746,999 (c) Profit on discard of assets 2,984,044 -

(d) Net gain/(loss) arising on financial assets mandatorily measured at FVTPL 1,595,008 (785,253) Total Other Income 10,243,624 5,384,723

I

Note No. 19(a) - Cost of materials consumed Amount in Rupees


ended 31 March 2017

For the year ended

31 March 2016 Opening stock Add: Purchases

Less: Closing stock Cost of materials consumed

10,700,581 126,495,185

4,584,609 9,189,423

137,195,766 21,244,989

13,774,032 10,700,581

115,950,777 3,073,451

I

Note 19(b) Changes in inventories of finished goods, work-in-progress and stock-in-trade Amount in Rupees

Particulars

For the year ended

31 March 2017

For the year ended

31 March 2016

Inventories at the end of the year: Finished goods 2,955,401 -

Work-in-progress 1,160,507 1,828,500 Stock-in-trade 1,943,992

6 059,900 1,828 500

Inventories at the beginning of the year: Finished goods -

Work-in-progress 1,828,500 Stock-in-trade -

1,828,500 -

Net (increase) / decrease (4,231,400), (1,828,500)

1


Note No. 20 - Employee Benefits Expense

Amount in Rupees

Particulars For the year ended

31 March 2017 For the year ended

31 March 2016 (a) Salaries and wages, including bonus 68,696,372 34,077,204 (b) Contribution to provident and other funds 2,772,256 2,111,176 (c) Gratuity expenses 857,384 601,650 (d) Staff welfare expenses 1,352,016 1,551,897

Total Employee Benefit Expense 73,678,028 38,341,927

Note No. 21 - Finance Cost

Amount in Rupees



31 March 2016 (a) Interest expenses on loans/ borrowings (b) Interest on delayed payment of taxes

Total finance costs

19,303,473 -

17,542,521 2,837

19,303,473 17,545,358 I

Note No. 22 - Other Expenses

Amount in Rupees

Particulars For the year ended 31 March 2017


(a) Stores consumed 546,023 459,910 (b) Power and Fuel 2,176,259 695,837 (c) Rent including lease rentals 9,250,881 7,341,416 (d) Rates and taxes 113,489 47,910 (e) Insurance 757,627 364,566 (f) Repairs and maintenance - Buildings 631,452 448,200 (g) Repairs and maintenance - Machinery 634,087 374,391 (h) Repairs and maintenance - Others 724,672 416,258 (i) Freight outward 681,503 1,708 (j) Travelling and Conveyance 6,275,045 1,277,994 (k) Excise duty on sale of products 21,032,483 284,429 (I) Net loss / (gain) on foreign currency transactions

(m) Auditors remuneration and out-of-pocket expenses (i) As Auditors

-

1,000,000

221,702

1,000,000 (ii) For reimbursement of expenses 36,060 35,340

(n) Legal and other professional 5,839,667 7,145,409 (o) Royalty 2,282,174 (p) Warranty 854,686 -

(q) Communication expenses 1,490,665 1,175,650 (r) Printing and stationery 157,491 188,871 (s) Security charges 980,031 826,692 (t) House keeping expenses 174,001 234,048 (u) Director's sitting fees 474,400 320,000 (v) Recruitement Expenses 148,979 134,823 (w) Increase/ (Decrease) in excise duty on closing stock 422,911 (x) Miscellaneous expenses 1,747,263 322,683

Total Other Expenses 58,431,849 23 3 7,837

("N.\ I vh,....._Aji), 4,ck

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0

CTE


Note No. 23 - Earning Per Share

Particulars



Basic earnings per share

Diluted earnings per share

(2.79) (4.28)

(2.79) (4.28)

Basic earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

Amount in Rupees For the year ended


31 March 2016

Profit / (loss) for the year attributable to owners of the Company (94,860,019) (91,842,689)

Profit / (loss) for the year used in the calculation of basic earnings per share (94,860,019) (91,842,689)

Weighted average number of equity shares 33,976,028 21,450,000

Earnings per share from continuing operations - Basic (2.79) (4.28)

Diluted earnings per share

Amount in Rupees For the year ended


31 March 2016 Profits used in the calculation of diluted earnings per share (94,860,019) (91,842,689)

The weighted average number of ordinary shares for the purpose of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:



Weighted average number of equity shares used in the calculation of Basic EPS Add: Effect of potential equity shares Weighted average number of equity shares used in the calculation of Diluted EPS

33,976,028 21,450,000 Nil * Nil *

33,976,028 21,450,000

*Nil, as anti-dilutive potential shares in view of loss for the year.

ELHI JOV


Note No. 24 - Financial Instruments

Capital management The Company's capital management objectives are:

- to ensure the Company's ability to continue as a going concern - to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

The Company manages capital risk in order to maximize shareholders' profit by maintaining sound/optimal capital structure through monitoring of financial ratios, such as debt-to-equity ratio on a monthly basis and implements capital structure improvement plan when necessary. There is no change in the overall capital risk

management strategy of the Company compared to last year.

The Company uses debt ratio as a capital management index and calculates the ratio as total borrowings (including interest accrued) divided by total equity.

The Company is not subject to externally enforced capital regulation.

Debt-to-equity ratio as of 31 March 2017, 31 March 2016 and 1 April 2015 is as follows:

31-Mar-17 31-Mar-16 1-Apr-15

Debt (A) 225,712,330 167,296,571 120,034,521

Equity (B) 162,980,423 124,550,741 180,261,782

Debt Ratio (A / B) 1.38 1.34 0.67

Categories of financial assets and financial Amount in Rupees —.....—

Particulars

As at 31 March 2017 As at 31 March 2016 As at 1 April 2015

Amortised Costs FVTPL Amortised Costs

FVTPL Amortised Costs FVTPL

Non-current Assets Security Deposits 1,606,300 1,782,650 1,782,650

Current Assets Investments 32,144,954 - 24,632,373 74,247,650

Trade Receivables 40,563,928 668,329 288,318

Cash and Cash Equivalents 293,185 609,405 8,717,808

Security Deposits 119,695 606,500 293,500

Non-current Liabilities Borrowings 79,444,440 108,333,332 120,000,000

Current Liabilities Borrowings 116,831,704 37,261,585

Trade Payables 43,159,943 18,589,945 13,104,202

Other Financial Liabilities Current maturities of long-term debt 28,888,891 21,666,668 Interest accrued but not due on long term horrowinas

547,295 34,986 34,521

Creditors for capital supplies/services 2,893,876 31,072,338 9,312,555 -

Retention Money 322,297

Security Deposits 300,000 350,000 250,000

Employee Benefits Payable 7,384,578 4,231,016 6,220,768

Financial Risk Management Framework The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk. In order to manage the aforementioned risks, the Company operates a risk management policy and a program that performs close monitoring of and responding to each risk factors.

CREDIT RISK Credit risk management Credit risk arises when a counterparty defaults on its contractual obligations to pay resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collatarel , where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company only transacts with entities that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies where available and, if not available, the Company uses other publicly available financial information and its own trading records to rate its major customers. The Company's exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counter party limits that are reviewed and approved by the management annually.

Trade receivables consist of Hero MotoCorp which is holding company and TVS Motors. Ongoing credit evaluation is performed on the financial condition of accounts

receivable. is

LIQUIDITY RISK (I) Liquidity risk management Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework

for the management of the Company's short-, medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by

maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the

maturity profiles of financial assets and liabilities.

(ii) Maturities of financial liabilities The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The amount

disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be

required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual

maturity is based on the earliest date on which the Company may be required to pay.

Amount in Rupees

Particulars Less than 1 Year 1-3 Years 3 Years to

5 Years 5 years and

above INR INR INR INR

Non-derivative financial liabilities 31 March 2017 Non-interest bearing 54,285,692 Variable interest rate instruments 116,831,704 Fixed interest rate instruments 28,888,891 57,777,780 21,666,660

Total 200,006,287 57,777,780 21,666,660 -

31 March 2016 Non-interest bearing 54,600,582 Variable interest rate instruments 37,261,585 -

Fixed interest rate instruments 21,666,668 57,777,781 50,555,551

Total 113,528,835 57,777,781 50,555,551 -

01 April 2015 Non-interest bearing 28,922,046 Fixed interest rate instruments 46,666,670 53,333,337 19,999,993

Total 28,922,046 46,666,670 53,333,337 19,999,993

(iii) Financing arrangements The Company had access to following undrawn borrowing facilities at the end of the reporting period:

Amount in Rupees

Particulars 31 March 2017 31 March 2016 01 April 2015

Secured Bank Overdraft/CC/ WCDL facility - Expiring within one year - Expiring beyond one year

Letter of Credit - Expiring within one year - Expiring beyond one year

158,162,628

75,000,000

-

237,739,000

75,000,000

75,000,000

75,000,000 233,162,628 312,739,000 150,000,000

(iv) Maturities of financial assets The following table details the Company's expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted

contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is

necessary in order to understand the Company's liquidity risk management as the liquidity is managed on a net asset and liability basis.

Amount in Rupees

Particulars Less than 1 Year 1-3 Years 3 Years to 5

Years 5 years and above

INR INR INR INR

Non-derivative financial assets 31 March 2017 Non-interest bearina Total

31 March 2016 Non-interest bearing Total

01 April 2015 Non-interest bearing Total

73.121,762 1.129.500 476.800 7 121.762 I 1 179.511(1 I - 476 Ann

26,516,607 376,350 376,350

1,129,500 1,129,500

276,800 276,800 26,516,607

83,547,276 376,350 1,406,300 83,547,276 376,350 - 1,406,300

C

MARKET RISK Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises currency risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

There has been no significant changes to the Company's exposure to market risk or the methods in which they are managed or measured.

Currency Risk The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company's exposure to currency risk relates primarily to the Company's operating activities when transactions are denominated in a different currency from the Company's functional

currency.

The carrying amounts of the Company's unhedged foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

Amount in Rupees

Particulars Currency 31-Mar-17 31-Mar-16 1-Apr-15 Trade Payables USD 19,350 500,000 70,320

EUR 296,726 169,073 22,582 RMB 508,477 142,339 224,000

Advances USD - EUR 1,150 RMB 2,677

Foreign Currency Sensitivity The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and RMB exchange rates, with all other variables held constant. The impact on the Company's profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company's exposure to foreign currency

changes for all other currencies is not material.

Currency Change in rate Effect on profit/ (loss)

before tax

31 March 2017 USD +10% (125,460) USD -10% 125,460 EUR +10% (2,054,754) EUR -10 0/0 2,054,754 RMB +10 0/0 (478,985) RMB -10 0/0 478,985

31 March 2016 USD +10°/0 (3,316,645) USD -10% 3,316,645 EUR +10% (1,269,738) EUR -10% 1,269,738 RMB +10°/0 (148,033) RMB -10% 148,033

Profit is less sensitive to movements in the INR/USD rates in 2017 than 2016 because of the decreased USD denominated payables.

In management's opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the expos re at the end of the reporting period

\\7 14,t,

0

0 ( N DELHI

'A-- 1- :

7.1

does not reflect the exposure during the year.


Note No. 25 - Fair Value Measurement

Fair Valuation Techiques and Inputs used - recurring Items Amount in Rupees

Financial assets/ financial liabilities measured at Fair value

Fair value as at .

Fair value hierarchy

Valuation technique(s) and key input(s)

31-Mar-17 31-Mar-16 1-Apr-15

Financial assets Investments

Mutual fund investments

Total financial assets

32,144,954 24,632,373 74,247,650 Level 1 Published NAV value by MF Houses

32,144,954 24,632,373 74,247,650

Fair value of financial assets and financial liabilities that are not measured at fair value Amount in Rupees

31-Mar-17 31-Mar-16 1-Apr-15

Particulars Carrying Carrying Carrying amount Fair value amount Fair value amount Fair value

Financial assets Financial assets carried at Amortised Cost -Security Deposits 1,725,995 1,725,995 2,389,150 2,389,150 2,076,150 2,076,150

-trade receivables 40,563,928 40,563,928 668,329 668,329 288,318 288,318

-Balances with banks 292,279 292,279 551,699 551,699 8,649,774 8,649,774

-Cash on hand 906 906 57,706 57,706 68,034 68,034

Total 42,583,108 42,583,108 3,666,884 3,666,884 11,082,276 11,082,276

Financial liabilities Financial liabilities held at amortised cost - trade and other payables 43,159,943 43,159,943 18,589,945 18,589,945 13,104,202 13,104,202

- Current maturities of long-term debt 28,888,891 28,888,891 21,666,668 21,666,668 -

- Interest accrued but not due on long term borrc 547,295 547,295 34,986 34,986 34,521 34,521

- Creditors for capital supplies/services 2,893,876 2,893,876 31,072,338 31,072,338 9,312,555 9,312,555

- Retention Money 322,297 322,297 -

- Security Deposits 300,000 300,000 350,000 350,000 250,000 250,000

- Employee Benefits Payable 7,384,578 7,384,578 4,231,016 4,231,016 6,220,768 6,220,768

Total 83,174,583 83,174,583_ 76,267,250 76,267,250 28,922,046 28,922,046

The Management consider the nature of financial assets/ liabilities recognised in the financial statements approximating their fair value.

(\\

HMC MM AUTO LIMITED Notes to the consolidated financial statements for the year ended 31 March 2017

Note No. 26 - Leases mount in Rupees

Particulars As at

31 March 2017

As at 31 March 2016

As at 1 April 2015

Details of leasing arrangements Operating Lease The Company has entered into operating lease arrangements for certain facilities and office premises. The leases are non-cancellable and are for a period of one to five years and may be renewed for a further period based on mutual agreement of the parties. The lease agreements provide for an increase in the lease payments by 5% every year.

Future Non-Cancellable minimum lease commitments not later than one year later than one year and not later than five years later than five years

Total

Expenses recognised in the Statement of Profit and Loss Minimum Lease Payments

2,036,119 6,656,678 20,490.219

6,640,503 8.333.387

2,036,119 27,146,897 _ 14,973,890

9,250,881 7,341,416 2,995,490

HMC MM AUTO LIMITED Notes to the financial statements for the year ended 31 March 2017 Note No. 27 - Employee benefits

(a) Defined Contribution Plan The Company's contribution to Provident Fund Rs. 3,04,394 (Previous year Rs. 1,187,305) has been recognised in product development expense and Rs. 27,22,564 (Previous year Rs.21,09,656) has been recognised in the Statement of Profit or Loss under the head Employee

Benefits Expense in Note 18.

(b) Defined Benefit Plans: Gratuity The Company operates a 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 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.

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

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 bonds discount rate, this will create or increase a deficit. The defined benefit plans hold a significant proportion of equity type assets, which are expected to outperform government bonds in the long-term while providing volatility and risk in

the short-term.

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 and interest rate hedging instruments.

Inflation risk Some of the Company's pension obligations are linked to inflation, and higher inflation will lead to higher liabilities (although, in most cases,

caps on the level of inflationary increases are in place to protect the plan against extreme inflation).

Life expectancy The majority of the plan's obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plan's liabilities. This is particularly significant in the Company's defined benefit plans, where inflationary increases result in

higher sensitivity to changes in life expectancy.

The significant actuarial assumptions used for the purposes of the actuarial valuations were as follows:

Significant Actuarial Assumptions For the year ended 31 March 2017


Discount rate(s) 7.54 8.00

Expected rate(s) of salary increase 5.50% 5.50%

Average Longevity 58 Years 58 Years

Defined benefit plans - as on 31st March, 2017 Amount in Rupees

Particulars Unfunded Plan

Gratuity

Amounts recognised in comprehensive income in respect of these

defined benefit plans are as follows:

Current Service Cost Net interest expense Components of defined benefit costs reconised in profit or loss

Remeasurement on the net defined benefit liability Actuarial gains and (loss) arising form changes in financial

assumptions Actuarial gains and (loss) arising form experience adjustments

Components of defined benefit costs recognised in other comprehensive income

Total

Year ended March 31 2017

Year ended March 31 2016

686,501 170,883

472,532 129,118

857,384 601,650

88,065

424,895

762

(132,410)

512,960 (131,648)

1,370,344 I 470,002

I. Net Asset/(Liability) recognised in the Balance Sheet as at 31 March 1. Present value of defined benefit obligation as at 31st March 3,506,382 2,136,038

2. Current portion of the above 1,672,992 1,014,625 3. Non current portion of the above 1,833,390 1,121,413

II. Change in the obligation during the year ended 31 March

1. Present value of defined benefit obligation at the beginning of th 2,136,038 1,666,036 2. Expenses Recognised in Profit and Loss Account - Current Service Cost 686,501 472,532 - Interest Expense (Income) 170,883 129,118

3. Recognised in Other Comprehensive Income Remeasurement gains / (losses) - Actuarial Gain (Loss) arising from:

ii. Financial Assumptions 88,065 762 iii. Experience Adjustments 424,895 132 410

4. Present value of defined benefit obligation at the end of t 3,506,382 _ 2,136,038

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

Amount in Rupees

Principal assumption Year Changes in Impact on defined benefit assumption obli ation

Increase in assumption

Decrease in assumption

Discount rate 2017 0.50% (99,504) 107,819 2016 0.50% (61,789) 66,688

Salary growth rate 2017 0.50% 109,452 (101,820) 2016 0.50% 67,999 (63,483)

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice this is

unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit

obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised

in the Balance sheet. The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to previous year.

Amount in Rupees VIII. Experience Adjustments : Year Ended

20171 2016

Experience adjustment on plan liabilities f(Gain)/Lossl

Gratuity

424,895 I (132,410)

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant

factors, such as supply and demand in the employment market. Since the liability is not funded, therefore information with regard to plan assets has not been furnished. The current service cost and the net interest expense pertaining to the gratuity expense for the year are incl." d in the employee benefits

expense in profit or loss under note 20.

u 0

NEW DELHI r---1 .0


Note No. 28 - Related Party Transactions

Name of the parent Company

Party in respect of which the Company is associate

Subsidiary of party of which Company is associate

Hero Motocorp Limited

Magneti Marelli S.p.A

Magnetti Marelli UM Electronics Systems Pvt. Ltd. Magnetti Marelli India Pvt. Ltd. Magnetti Marelli (China) Co. Ltd.

Details of transaction between the Company and its related parties are disclosed below: Amount in Rupees


Parent Company


Magnetti Marelli UM Electronics Systems Pvt. Ltd.

Magnetti Marelli India Pvt. Ltd.

Magnetti Marelli (China) Co. Ltd.

Nature of transactions with Related Parties Sale of goods* 31-Mar-17

31-Mar-16

202,506,147

1,057,362

16,418

Purchase of goods 31-Mar-17

31-Mar-16

45,297,458

828,604

43,038,243

3,764,944

46,837,511

1,846,838

Purchase of property and other assets 31-Mar-17

31-Mar-16

1,886,250

Compensation for assets discared # 31-Mar-17

31-Mar-16

18,900,250

Receiving of services/ Expense Reimbursement 31-Mar-17

31-Mar-16

7,201,381

12,593,799

1,326,385

Royalty 31-Mar-17

31-Mar-16

2,259,578

Equity contribution to the Company 31-Mar-17

31-Mar-16

102,000,000 68,000,000

Share application money received 31-Mar-17

31-Mar-16 36,000,000

Other transactions : Technical Know How 31-Mar-17

31-Mar-16

34,085,150

33,166,450

Nature of Balances with Related Parties Balance as on

Parent Company


Magnetti Marelli UM Electronics Systems Pvt. Ltd.

Magnetti Marelli India Pvt. Ltd.

Magnetti Marelli (China) Co. Ltd.

Equity share capital 31-Mar-17 230,699,930

128,699,930

153,800,010

85,800,010

-

31-Mar-16

Share Application Money 31-Mar-17

31-Mar-16 36,000,000

Trade payables 31-Mar-17

31-Mar-16

16,450,414

41,052,983

5,255,920

858,593

6,802,284

1,427,076

Trade Receivables 31-Mar-17

31-Mar-16

34,910,008

668,329

* including sales tax and excise duty

# Including service tax

)„

Amount in Rupees

PARTICULARS

Year ended 31 March 2016 Previous

GAAP Ind AS

Adjustments Ind AS

Net cash flows from operating activities (67,845,555) (67,845,555)

Net cash flows from investing activities (5,979,540) (5,979,540)

Net cash flows from financing activities 65,716,692 65,716,692

Net increase (decrease) in cash and cash equivalents (8,108,403) (8,108,403)

Cash and cash equivalents at beginning of period 8,717,808 8,717,808

Cash and cash equivalents at end of period 609,405 609,405

(v) Mat

Analysis of cash and cash equivalents as at 31 March 2016 and 1 April 2015 for the purpose of Statement

Amount in Rupees

PARTICULARS As at 31

March 2016 As at 1 April

2015

Cash and cash equivalents for the purpose of Statement of Cash flows as per Previous GAAP 609,405 8,717,808

Cash and cash equivalents for the purpose of Statement of Cash flows as per Ind AS 609,405 8,717,808

h flows under Ind AS

Vc,

HMC MM AUTO LIMITED Notes to the consolidated financial statements for the year ended March 31, 2017

Note No. 29 - First-time adoption of Ind-AS

First Time Ind AS Adoption reconciliations (i) Reconciliation of Total Equity as at 31 March 2016 and 1 April 2015:

Amount in Rupees

Particulars Notes As at 31 March

2016 As at 1 April

2015

Equity as reported under previous GAAP 85,320,995 176,246,783

Ind AS: Adjustments increase (decrease): Employee future benefits - actuarial gains and losses b 131,648 Acturial gain recognised in other comprehensive income (131,648) Cheange due to FVTPL of Investment 3,229,746 4,014,999

Share application money pending allotment 36,000,000

Equity as reported under IND AS 124,550,741 180,261,782

(ii) Reconciliation of Total Comprehensive Income for the year ended 31 March 2016: Amount in Rupees

PARTICULARS Notes Year ended

31 March 2016

Profit or Loss as per previous GAAP (90,925,788) Ind AS: Adjustments increase (decrease): Fair value of investments under Ind As a (785,253) Employee future benefits - actuarial gains and losses b (131,648)

Total adjustment to profit or loss Profit or Loss under Ind AS (91,842,689)

Other comprehensive income 131,648

Total comprehensive income under Ind ASs (91,711,041)

Note: No statement of comprehensive income was produced under previous GAAP. Therefore the reconciliation starts with profit under previous GAAP.

(iii) Reconciliation of Balance sheet items as at 31 March 2016 and 1 April 2015: Amount in Rupees

Particulars Notes As at 31 March

2016 As at 1 April

2015

Incestment as reported under previous GAAP 21,402,627 70,232,651

Ind AS: Adjustments increase (decrease): Increase/ (Decrease ) in Investment due to FVTPL under Ind AS a 3,229,746 4,014,999

Closing Balance as per Ind AS 24,632,373 74,247,650

(iv) Reconciliation of statement of profit and loss items as at 31 March 2016: Amount in Rupees

Particulars Notes Year ended 31 March 2016

Previous GAAP Ind AS

Adjustments Ind AS

Revenue from operations c 730,316 284,429 1,014,745

Other Income a 6,169,976 (785,253) 5,384,723

Employee benefit expense b 38,210,279 131,648 38,341,927

Other expenses c 23,033,408 284,429 23,317,837

Notes: (a) Under previous GAAP, current investments were measured at lower of cost or fair value. Under Ind AS, these financial assets have been classified as FVTPL on the date of transition. The fair value changes are recognised in profit or loss, on transitioning to Ind AS, these financial assets have been measured at their fair values which is higher than cost as per previous GAAP as on 1.4.15, resulting in an increase in carrying amount by Rs.4,014,999 and as on 31.3.16 the carrying value decrease by Rs.785,253 due to which other income has been decreased and remained at Rs.5,384,723, net increase in carrying value of investment after taken both in to account is Rs.3,229,746 making the closing balance of investment as on 31.3.16 Rs.

24,632,373. (b) Under previous GAAP, actuarial gains and losses were recognised in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in other comprehensive income. Thus the employee benefit cost is increased by Rs. 131,648 and Remeasurement gains on defined benefit plans has been recognized in the OCI.

(c) Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind-AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind-AS has increased by Rs. 284,429 with a

corresponding increase in other expense.

mer from its

NEW DELHI

ti


Note No. 30 - Specified Bank Note

As per the notification of Ministry of Corporate Affairs (MCA) dated March 30, 2017, the details in respect of specified bank notes (SBN) is

Amount in Rupees Other

Particulars SBNs denomination notes

Total

Closing cash in hand as on November 8, 2016 41,500 328 41,828

(+) Permitted receipts - -

(-) Permitted payments - (-) Amount deposited in Banks 41,500 - 41,500

Closing cash in hand as on December 30, 2016 - 328 328

Note No. 31 - Expenditure on research and development

Revenue Expenditure Amount in Rupees



31 March 2016

Salaries and allowances 20,257,682

Power and Fuel 1,481,375

Staff welfare expenses 35,789

Travelling Expenses 381,574 -

Material consumed 678,552

Other Expense 2,476,314 - Total 25,311,286 -

Capital Expenditure Amount in Rupees



31 March 2016

Computers and Data processing equipment 199,920 -

Office Equipments 9,900 -

Plant and Equipments 117,750 2,198,574

Vehicles 15,000 74,170

Furniture and Fixtures - 42,442

Tools, Jigs and Fixtures - 71,500 Total 342,570 2,386,686

Note No. 32 - Segment information

The operating segment of the Company has been identified in a manner consistent with the internal reporting provided to the Management, based on which there is only one operating segment in which the Company operates i.e."Manufacturing & Trading of automobile parts" within one geographical segment i.e. India.

Revenue from major products and services

The following is an analysis of the Company's revenue from continuing operations from its major products: Amount in Rupees

Particulars Year Ended

31 March 2017 Year Ended

31 March 2016

Throttle body assembly 73,837,899 448,098 Fuel pump 73,743,615 222,704 Injector Assembly 22,880,351 59,514 ECU Unit (MBC ECU) 23,227,176 - Total 193,689,041 730,316

The following is an analysis of the Company's revenue from continuing operations from its major c major products:

Amount in Rupees

Particulars Year Ended

31 March 2017 Year Ended

31 March 2016

yero MotoCorp Ltd TVS Motors Company Ltd Total

/

173,015,557 23,227,176

730,316 -

196,242,733 730,316

I

Saiu nook n D ector

DIN- 0 44940

Priyanka Khatri C pony Secretary

Niranian Kum r Gupta Director DIN- 07806792

A, Arjun Dewan Chief Financial Officer

IIMC MM AUTO LIMITED Notes to the financial statements for the year ended 31 March 2017

Note No. 33 - Capital Commitments Amount in Rupees

Particulars As at

31 March 2017 As at

31 March 2016

As at 1 April 2015

Commitments # (a) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances paid of Rs. 12,72,140 ,Rs. 201,904 & Rs.

16,54,544 for 2016-17, 2015-16 & 2014-15 respectively)

30,678,742 64,582,135 98,006,856

Note No. 34

The Company has carried out its deferred tax computation in accordance with Ind AS 12 'Income Taxes' notified under the Companies (Indian

Accounting Standards) Rules, 2015.

Significant coponents & classification of deferred tax assets and liabilities are as follows: Amount in Rupees

Particulars As at

31 March 2017 As at

31 March 2016

Deferred tax liabilities Related to depreciation of fixed assets 28,768,028 20,645,975

Related to fair value of investment 1,490,849 3,229,746

Total deferred tax liability (a) 30,258,877 23,875,721

Deferred tax assets Provision for warranty 264,098

Provision for gratuity 1,083,472 660,036

Provision for leave encashment 638,215 416,572

Unabsorbed Depreciation 44,980,595 27,349,795

Carry forward losses 53,189,293 33,036,191

Total deferred tax assets (b) 100,155,673 61,462,594

Net deferred tax assets/ (liabilities) (b-a) 69,896,796 37,586,873

Having regard to the accumulated losses, the Company has not recognised the net deferred tax assets in the absence of reasonable certainty at this

stage that there will be sufficient future taxable income available to realize such assets.

Note No. 35

The Company does not have any pending litigations which would impact its financial position.

Note No. 36

The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

Note No. 37

There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Note No. 38

Wherever required by Ind AS, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

For and n behalf f the Board of Directors

Place : Date : yvk cui

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