Kalyani Commercials Ltd Management Discussions.


The automobile industry was hit hard in fiscal 2021 as sales fell across vehicle segments. The COVID outbreak has cast a long shadow over a much-anticipated mild recovery in the Indian economy in fiscal 2022. In FY21, the sector recorded its worst annual volume decline for the two-wheelers and passenger cars, while the medium and heavy commercial industry saw the worst fall in the history.

Auto industry body, Society of Indian Automobile Manufacturers (SIAM) has forecasted weak bleak scenario for the current fiscal in terms of sales as well as investments. The industry body said during the current year the auto sector is looking at a decline of 26-45% depending on the vehicle category. COVID-19 pandemic is majorly responsible for such depressing figures. (Description regarding NBFC)


The automobile sector is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy. The Indian automobile industry comprises of a number of Indian-origin and multinational players, with varying degree of presence in different segments. Automobile dealer Industry plays the vital role of link between the manufacturer of the automobile and the consumer. With large inventories of cars, dealers provide consumers with a wide array of vehicles to meet their needs at different price points.

However due to pandemic automobile dealers dont expect demand to recover anytime soon, especially in urban regions, despite lockdown curbs being eased.

Weak consumer confidence, especially in urban areas, continues to haunt as buyers stayed away from concluding their purchase due to threat of community spread [of virus] and return of the complete lockdown.


The Company is engaged in trading of Heavy Commercial Vehicles, Three Wheelers and servicing (Dealership of Bajaj and TATA), Petroleum Product Dealership.


India being one of the largest automobile markets in the world, has a bright future because of several factors like rapid urbanisation, Car buyers getting younger, growing middle class, overall growth of other industries, infrastructure development and the improved road infrastructure. This along with rising disposable income, aspirations for a better lifestyle and a slew of new product launches lined up by companies would aid overall increase in sales volumes. The Company, with its wide portfolio is expected to benefit from the same. Further, per capita penetration at around eighteen cars per thousand is among lowest in the world. This growing consumerism is expected to lead to an increase in car penetration.


The impact of the COVID-19 pandemic has created significant volatility in the global economy and led to reduced economic activity. There have been extraordinary actions taken by international, federal, state, and local public health and governmental authorities to contain and combat the outbreak and spread of COVID-19 in regions throughout the world, including travel bans, quarantines, "stay-at-home" orders, and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. The pandemic has resulted, and may continue to result, in significant economic disruption that has and likely continue to adversely affect our business.

The ultimate impact of the pandemic on our business, results of operations and financial condition will depend on numerous evolving factors and future developments, including the ultimate duration, spread, severity and repetitiveness of the outbreak; the ultimate extent and duration of its effect on the global economy and how quickly and to what extent normal economic and operating conditions resume.


India is expected to emerge as the Third Largest passenger Vehicle market by 2021; however Auto industry body, Society of Indian Automobile Manufacturers (SIAM), has projected single digit growth in FY 2020-21. The Indian automotive sector has the potential to generate up to US$251.4-282.8 billion annual revenue by 2026. While automotive industry is likely to remain impacted in the short-term due to COVID-19 pandemic, encouraging recovery is seen in China. It is expected that other economies will follow a similar pattern in due course. Increased urbanisation and localised transport policies have opened up new opportunities for Mobility as a service, most notably in cities. Electric vehicles are gaining a lot of traction in shared mobility space and TML has been a front-runner in this newly evolving segment, entering into various strategic partnerships


Risks Associated with Companys Business and the Automotive Industry Company has been, and may in the future be, adversely affected by the COVID-19 pandemic, the duration and economic, governmental and social impact of which is difficult to predict, and which may significantly harm Companys business, prospects, financial condition and results of operation.

Since the end of 2019, a disease caused by a novel strain of coronavirus (COVID-19), has spread in China and throughout the world, and the World Health Organisation declared the COVID-19 outbreak a pandemic in March 2020. No fully effective treatments or vaccines have been developed as of the date of this Annual Report, and such development of treatments or vaccines may take a significant amount of time. The COVID-19 pandemic and associated governmental responses have adversely affected workforces, consumer sentiment, economies and financial markets. Such adverse effects, along with decreased consumer spending, have led to a global economic downturn.

The COVID-19 pandemic and the resulting business disruptions in several jurisdictions where Company operates could have a material adverse impact of Company operations, liquidity, business, financial conditions

Any future impact on the Companys business may take some time to materialize and may not be fully reflected in the results for the last quarter of FY 2020-21. Even after the COVID-19 pandemic subsides, Company may continue to experience an adverse impact to the business as a result of its global economic impact, including any recession that has occurred or may occur.

Deterioration in global economic conditions could have a material adverse impact on Companys sales and results of operations.

The automotive industry could be materially affected by the general economic conditions and developments in India and around the world and investors reaction to such conditions and developments. The automotive industry, in general, is cyclical, and economic slowdowns in the recent past have affected the manufacturing sector in India, including automotive and related industries. Deterioration of key economic Metrics, such as the growth rate, interest rates and inflation, reduced availability of competitive financing rates for vehicles, implementation of burdensome environmental and tax policies, work stoppages and increase in freight rates and fuel prices could materially and adversely affect Companys automotive sales and results of operations

Intensifying competition could materially and adversely affect Companys sales, financial condition and results of operations. SUBSIDIARY COMPANY

S. No. Company Subsidiary/Joint Venture/Associates Company Shareholding
1 Ganganagar Vehicles Private Limited Associate 42.02%


The Companys relations with the employees continued to be cordial.


The Financial performance of the Company for the Financial Year ended 31st March, 2021 is summarized below:-

(Rs. In Crore, except EPS)

Particulars Consolidated For the year Ended Standalone For the year Ended
31.03.2021 31.03.2020 31.03.2021 31.03.2020
Total Revenue 227.37 640.68 135.05 227.72
Total Expenses 225.22 641.01 134.41 227.64
Profit Before Tax & Extraordinary Item 2.48 1.14 0.98 1.13
Extraordinary Item Tax Expenses 0.00 0.00 0.00 0.00
- Current Tax 0.54 0.50 0.34 0.24
- Deferred Tax Liability(Net) (0.03) (0.05) (0.03) (0.00)
- Income Tax Earlier Year 0.03 0.00 (0.03) (0.00)
Profit / Loss For The Year After Tax 2.45 0.69 0.63 0.88
Total Other Comprehensive Income / Loss (0.19) 0.07 (1.88) 0.07
Total Comprehensive Income / Loss 2.26 0.76 0.44 0.95
Profit attributable to
c) Parent 1.61 0.01 - -
d) Non-Controlling Interest 0.65 (0.00) - -
Earnings Per Share (EPS)
c) Basic 16.16 8.53 4.43 9.55
d) Diluted 16.16 8.53 4.43 9.55


The company operates in two segments. Hence segment wise performance is discussed as follows:

Primary Segment: Business Segment

Based on the guiding principles given in Accounting Standard AS 17 "Segment Reporting" notified under Companies (Accounting standard) Rules 2006, the Companys operating business are organized and managed separately according to the nature of products.

The Two identified reportable segments. One is Automobile segment in which trading of vehicle and servicing (Including Heavy Commercial Vehicles and Three wheelers) and other includes and Retail out let of petroleum products (BPCL).

Secondary Segment: Geographical segment

The analysis of Geographical segment is based on the geographical location i.e. domestic and overseas markets of the customers,

Secondary Segment Reporting (By Geographical segment)

The following is the distributions of the companys consolidated revenue from operation (net) by Geographical markets, regardless of where the goods were produced:

(Rs. In Lacs)

Particulars 2020-21 2019-20
Revenue from Domestic Market 22737.03 64068.29
Revenue from Overseas Market 0.00 0.00
Total 22737.03 64068.29
Geographical segment wise receivables:
Particulars 2020-21 2019-20
Receivables from Domestic Market 1373.57 3413.29
Receivables from Overseas Market 0.00 0.00
Total 1373.57 3413.29
Geographical segment wise Fixed Assets:
Particulars 2020-21 2019-20
In India 433.76 2670.24
Outside India 0.00 0.00
Total 433.76 2670.24

Segment accounting polices:

In addition to the significant accounting policies applicable to the business segment, the accounting policies in relation to segment accounting are as under:

i) Segment revenue & expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

ii) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, receivables, inventories and fixed assets, net of allowance and provisions, which are reported as direct off sets in the balance sheet. Segment Liabilities include all operating Liabilities and consist principally of trade payables & accrued liabilities. Segment assets and liabilities do not include deferred income taxes except in the division of Commercial Vehicle. While most of the assets/liabilities directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two more segments are allocated to the segments on a reasonable basis.

iii) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation. The main division is Ganganagar Motors (A division of Commercials Vehicles) and funds provided by the Ganganagar Motors to other division and interests on such balances are not charged.

iv) Information about business segments :

For the year ending as on 31st March, 2021.

(Rs. In Lacs)

Particulars Automobile Others Total
Curr. Year Prev. Year Curr. Year Prev. Year Curr. Year Prev. Year
Segment Revenue : 21956.01 63174.48 781.01 893.81 22737.02 64068.29
External sales/income (Net)
Other receipt 33.95 145.82 0.00 0.00 33.95 145.82
Total Revenue 21989.96 63320.30 781.01 893.81 22770.97 64214.11
Segment Results : 542.51 1394.13 15.89 12.46 558.40 1406.59
Segments results
Unallocated expenses (Net) 0.00 0.00 0.00 0.00 0.00 0.00
Operation profit before Interest 542.51 1394.13 15.89 12.46 558.40 1406.59
Financial exp. (310.42) (1293.02) 0.00 0.00 (310.42) (1293.02)
Income tax current/Earlier Year (56.98) (49.70) 0.00 0.00 (56.98) (49.70)
Less: Deferred tax Liability 2.61 4.65 0.00 0.00 2.61 4.65
Net Profit 210.49 63.11 15.89 12.46 226.38 75.57
Other Information : 6247.71 9462.58 151.34 125.47 6399.05 9588.05
Segment Assets
Inter Branch 0.00 0.00 0.00 0.00 0.00 0.00
Unallocated assets
Total Assets 6247.71 9452.58 151.34 125.47 6399.05 9588.05
Segments Liabilities : 100.00 100.00 0.00 0.00 100.00 100.00
Share Capital
Reserve & Surplus 812.28 666.53 141.20 125.30 953.48 791.83
Secured & Unsecured Loan 3208.89 4775.53 0.00 0.00 3208.89 4775.53
Segment liabilities 2126.53 3516.73 10.14 0.17 2136.68 3516.90
Unallocated liabilities 0.00 403.78 0.00 0.00 0.00 403.78
Deferred tax liabilities 0.00 0.00 0.00 0.00 0.00 0.00
Total Liabilities 6247.71 9462.57 151.34 125.47 6399.05 9588.04
Capital Expenditure 0.00 110.19 0.00 0.00 0.00 110.19
Depreciation 243.39 472.66 0.00 0.00 243.39 472.66


Your Company has an effective system of accounting and administrative controls supported by an internal audit system with proper and adequate system of internal check and controls to ensure safety and proper recording of all assets of the Company and their proper and authorised utilization.

As part of the effort to evaluate the effectiveness of the internal control systems, your Companys internal audit department reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The internal audit department is manned by highly qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the, an Information Security Assurance Service is also provided by independent external professionals. Based on their recommendations, the Company has implemented a number of control measures both in operational and accounting related areas, apart from security related measures.


This report describing the Companies activities, projections about future estimates, assumptions with regard to global economic conditions, government policies, etc. may contain "forward looking statements" based on the information available with the company. Forward-looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the companys operations are affected by the many external and internal factors, which are beyond the control of the management. Hence the company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

By the order of the Board
For Kalyani Commercials Limited
Sourabh Agarwal Shankar Lal Agarwal
(Whole Time Director) (Managing Director)
DIN: 02168346 DIN: 01341113
Address: AE- 166, Shalimar Bagh, Address: AE-166, Shalimar Bagh,
New Delhi- 110088 New Delhi- 110088
Date: 03/09/2021
Place: New Delhi