Notes to Accounts of Force Motors Ltd.

Mar 31, 2023

(b) Terms / rights attached to Equity Shares

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

(c) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(d) Shares held by holding/ultimate holding companyand/ortheirsubsidiaries/associates

The Company is a subsidiary of Jaya Hind Industries Private Limited, which holds 57.38% (31st March 2022 : 57.38%), 75,59,928 (31st March 2022: 75,59,928) shares in the Company.

• Term Loans are secured by hypothecation, by way of exclusive first charge on specific Plant and Machinery, being movable properties, secured as a continuing security for the repayment of Term Loans together with interest. The term loans are repayable in quarterly instalments over a period upto six years, including moratorium. Term Loans include foreign currency loan.

• Non-Convertible Debentures : The Company has issued 190 (5.85%) Secured unlisted rated redeemable non-convertible debentures of '' 100 lakhs, each total amounting to '' 19,000 lakhs, on 15th February 2021. The debentures are secured by way of first ranking exclusive charge over the specific movable fixed assets. The debentures are redeemable over a period of four years (including moratorium) maturing in February 2025.

• Working Capital Loans are secured by hypothecation of Company''s stock of raw materials, work-in-progress, finished goods, consumable stores, spares, bills receivable and book debts, both present and future. The Fund Based Limits are payable on demand to the Banks.

• Inter corporate deposits from Holding Company are unsecured and are repayable in July 2024.

• The Company has used the borrowedfundsforthe specific purposefor which it was taken as at the balance sheet date.

• The quarterly returns or statements, of current assets, filed by the Company with Banks or financial institutions are in agreement with the Books of accounts of the Company.

(a) Government Incentives - During the yearunder report, the methods of availing of incentives/assistance, granted bythe Government of Madhya Pradesh, as per the Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2010, (the Scheme), were clarified by that Government. Accordingly, the Company could submit its claims for assistance, as per the Scheme, for the Financial Years 2017-2018 to 2021-2022. Sanction Orders dated 24th March 2023 were issued sanctioning the amount of assistance of '' 9,102 lakhs for the year 2017-18,''9,481 lakhsfortheyear2018-19,''9,061 lakhsfortheyear2019-20,''3,187lakhsfortheyear2020-21 and? 4,415lakhsforthe year 2021-22. The Company has also received disbursement of sanctioned assistance amounting to '' 9,992 lakhs. The assistance amounting to '' 4,415 lakhs has been recognized under the head “Other Income”, for the Financial Year 2021-2022 and assistance related to the Financial Years 2017-2018to 2020-2021 amountingto '' 30,831 lakhs istreated as “Exceptional Item”-of income.

(b) Write-off - Intangible Assets under development and Capital Work-in-Progress - In view of the changing business environment, particularly emphasis on use of alternate energy, instead of fossil fuels, the Company was required to reassess various development programs under implementation and consequential effect on capital work-in-progress.

One of the Projects, which was under implementation, viz. manufacture of Utility Van Platform, based on technical assistance, available to the Company, was reviewed by the Board and the Company came to conclusion that it is not worthwhile pursuing the Project for development of Utility Van Platform, such as T0 Platform forthe time being.

Based on this review, it is decided that the intangible assets under development, having value of'' 4,620 lakhs and amount equal to '' 7,596 lakhs, reflected in capital work-in-progress, being value of assets/investment for acquisition of specific assets, such as dies, related to the said project in Utility Van Platform, be written off. Accordingly the value of the capital asset, in the development stage, was reduced from '' 12,216 lakhs to '' 2,217 lakhs. The amount of '' 2,217 lakhs represents realisable value of those assets based on the weight and prevalent market rates, ascertained on the basis of quotations/proposals received by the Company, in respect of disposal of these assets, when scrapped.

(c) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable agreement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional / unfounded claims are not as per the applicable law nor these claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as per the provisions of Schedule III to the Companies Act, 2013, only to indicate the alleged claims made against the Company and the developments in respect thereof. Moreover, considering the period lapsed, since the conclusion of the said legal proceedings, the Company does not expect any impact of this litigation on its financial position.

The proceedings initiated by one of the suppliers, claiming to be a small scale enterprise, as perthe provisions of Section 18 of the Act, culminated into an award of claim for'' 157 lakhs with interest. The Company has not accepted the said liability. The Company has a major counter-claim against the said supplier amounting to about'' 906 lakhs, which being unearned income, is not accounted. The award is challenged by the Company, as perthe provisions of the Act and proceedings are pending before the Hon''ble District Judge, Pune, and before the Hon''ble High Court of Judicature at Bombay.

33. FOREIGN EXCHANGE DIFFERENCES

Theamountof net exchange differences included in the Profit/Loss for the year on Revenue account is'' 985 lakhs Debit (31st March 2022: '' 2,014 lakhs Credit) and on Capital account is'' 119 lakhs Debit (31st March 2022:'' 15 lakhs Debit).

35. LEASES

Operating Leases As a Lessor

(a) Industrial Shed at Chakan

The Company has entered into a Lease Agreement for Industrial shed at Chakan, Pune, for a period of 10 years. The Lease Agreement provides for a refundable interest free deposit of'' 169 lakhs, clause for escalation of lease rental and a non-terminable lock-in period of 36 months. The Lease income has been recognized in the Statement of Profit and Loss.

(b) Freehold Land

Out of the freehold land at Akurdi, Pune

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

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

These land given on lease are not considered as investment property considering the insignificant area and cost of that with respect to the total area and cost of freehold land atthe respective places.

As a Lessee Leasehold land

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

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

The fair values of Trade Payables, Trade Receivables, Cash and Cash equivalents and Other Bank Balances, are reasonable approximation of fair valueduetotheshort-termmaturities oftheseinstruments.

Investment in subsidiary and joint venture are accounted at cost in accordance with Ind AS 27 Separate financial statements, accordingly investmentinsubsidiaryandjointventurearenotfairvalued.

Allowanceforcreditloss on Trade Receivables, istaken into account, on the basis ofcredit worthiness of the customer individual.

Borrowings represents Working Capital Loan, ICD, Term Loans from Bank and NCD obtained at market rates of interest available for debt on similar terms, credit risk and remaining maturities. As of reporting date, the fair value of borrowings is measured at amortized cost, which is reasonableapproximationoffairvalue.

39. FINANCIAL RISK MANAGEMENT

Financial RiskManagementPolicyandObjectives

The Company''s principal financial liabilities comprise of Borrowings, Trade and Other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include Trade and Other receivables and Cash and Cash equivalents, which are derived directlyfrom its operations.

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

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

44. ADDITIONAL REGULATORY INFORMATION:

(a) Loans and Advances in the nature of Loan to Related Parties:

The Company has not granted any Loans or Advances in the nature of loans to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally orjointlywith any other person as on 31st March 2023.

(b) Relationshipwith Struckoff Companies:

As perourknowledge, the Company do nothave anytransactions with struckoff companies.

(c) Registration of charges or satisfaction with Registrar of Companies:

The Company has no charges or satisfaction yetto be registered with Registrar of Companies beyondthe statutory period.

(d) Compliancewith numberof layers of companies:

The Company complies with the number of layers prescribed under Clause 87 of Section 2 of the Act, read with the Companies (Restriction on numberoflayers) Rules, 2017.

(e) Compliancewith approved Scheme (s) ofArrangementsAccounted as per Scheme & IndAS

Neither the Company has approached to nor any Competent Authority has approved any scheme of arrangements so as to account for in the books of account ofthe Company, in orderto disclose any deviation in that regard.

(f) Loans, Guarantee, Security given by Company to Intermediary anditisgivingtoothers on behalf of Company:

The Company has neither advanced nor loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries).

(g) Crypto Currency orVirtual Currency:

The Company has neithertraded nor invested in Crypto currency orVirtual currency duringthefinancial year.

(h) BenamiProperty:

The Company does not have any Benami property, and hence no proceeding has been initiated or pending against the Company for holding any Benami property underthe Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(i) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

45. DIVIDEND

The Board of Directors has recommended payment of Dividend of'' 10 perfully paid Equity Shares (31st March 2022:'' 10). This proposed dividend is subjectto the approval of Shareholders in the ensuingAnnual General Meeting. This dividend is not recognized in the books of account at the end of thereportingperiod.

46. The Company is operating in aSingle Segment.

47. Previous year''s figures have been re-grouped, re-arranged and re-classified wherever necessary.

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Mar 31, 2018

1. THE CORPORATE INFORMATION

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

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

(a) Terms / rights attached to Equity Shares

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

(b) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

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

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

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

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

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

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

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

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

4. FOREIGNEXCHANGEDIFFERENCES

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

5. EXPENDITURE ON RESEARCH AND DEVELOPMENT

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

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

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

6. LEASES

Operating Leases:

(a) Leases as Lessor

(i) Industrial Shed at Chakan :

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

(ii) Freehold Land :

Out of the freehold land at Akurdi, Pune;

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

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

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

(b) Leases as Lessee Leasehold land :

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

7. EMPLOYEE BENEFITS

A. Defined Contribution Plans :

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

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

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

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

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

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

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

Fair value hierarchy and valuation techniques used

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

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

9. FINANCIALINSTRUMENT

Financial Risk Management Policy and Objectives

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

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

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

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

(c) Market Risk: Equity price Risk

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

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

10. CAPITALMANAGEMENT

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

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

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

11. DIVIDEND

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

12. TRANSFERTOINVESTOREDUCATIONAND PROTECTION FUND

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

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

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

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

(b) Amountspentduringtheyearon:

15. EXCEPTIONALITEMS

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

16. The Company is operating in a Single Segment.

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

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Mar 31, 2017

1. DISCLOSUREAS PERTHE REQUIREMENT OF SECTION 22 OFTHE MICRO, SMALLAND MEDIUM ENTERPRISE DEVELOPMENTAL, 2006:

As on 31st March 2017, the Company has not received any intimation, except in few cases, as to the status as Micro, Small or Medium Enterprises from suppliers of the Company along with a copy of the Memorandum, filed by the said suppliers, as per the provisions of Section 8 of the Micro, Small & Medium Enterprises Development Act, 2006 (the Act). The proceedings initiated by one of the suppliers, claiming to be a small scale enterprise, as per the provisions of Section 18 of the Act, culminated into an award of claim for Rs, 157 Lakhs with interest. The Company has not accepted the said liability. The Company has a major counter-claim against the said supplier amounting to about Rs, 906 Lakhs, which being unearned income, is not accounted. The award is challenged by the Company, as per the provisions of the Act and proceedings are pending before the Hon''ble District Judge, Pune and before the Hon''ble High Court of Judicature at Bombay.

2. FOREIGN EXCHANGE DIFFERENCES

The amount of Net exchange differences included in the Profit/Loss for the year on Revenue account isRs, 1,675 Lakhs Credit (31st March 2016: Rs,307 Lakhs Debit, 1st April 2015 : Rs, 1,303 Lakhs Credit) and on Capital account is Rs, 65 Lakhs Credit (31st March 2016118 Lakhs Credit, 1st April 2015:Rs,3 Lakhs Credit).

3. LEASES

(A) Operating Leases:

(a) Leases as Lessor

(i) Industrial Shed at Chakan :

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

(ii) Freehold Land:

Out of the freehold land at Akurdi, Pune;

2,700 sq. mtrs. (cost Rs, 1,374) of land is given on lease to Maharashtra State Electricity Distribution Company Limited for 99 years, w.e.f. 1st August 1989. Lease rentals are recognized in the Statement of Profit and Loss. 19,000 sq. mtrs. (cost Rs, 9,669) of land is given on lease to Navalmal Firodia Memorial Hospital Trust for 25 years, w.e.f. 12th August 2014. Lease rentals are recognized in the Statement of Profit and Loss.

(iii) Leases as Lessee Leasehold land:

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

4. RELATED PARTY DISCLOSURES

(A) Names of the related parties and nature of relationship where control exists

Name of the Related Party Nature of relationship

(a) Jaya Hind Investments Private Limited Holding Company

(b) Tempo Finance (West) Private Limited Subsidiary Company

(B) List of other related parties with whom there are transactions in the current year:

Name of the Related Party Nature of relationship

(a) Key Management Personnel (KMP)

(i) Abhaykumar Firodia Chairman

(ii) Prasan Firodia Managing Director

(iii) Sudhir Mehta Director

(iv) Pratap Pawar Director

(v) S. Padmanabhan Director

(vi) Nitin Desai Director

(vii) Dr. Indira Parikh Director

(viii) Arun Sheth Director

(ix) Arvind Mahajan Director

(x) Vinay Kothari Director

(xi) PrashantV. Inamdar Executive Director (Operations)

(xii) Sanjay Kumar Bohra Chief Financial Officer

Notes to Financial Statements for the year ended 31st March 2017

(All amounts in Rs, Lakhs, unless otherwise stated)

(b) Other Entities

(i) Jaya Hind Industries Ltd. Associate of Holding Company

(ii) Jaya Hind Montupet Pvt. Ltd. Associate of Holding Company

(iii) Pinnacle Industries Limited Entity controlled by KMP of Company

(iv) Kider (India) Private Limited Entity controlled by KMP of Company

(v) Bajaj Tempo Limited Provident Fund Post employment benefit trust

(vi) Sakai Papers Private Limited Entity controlled by KMP of Company

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

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

Allowance for credit loss on trade receivables, is taken into account, on the basis of credit worthiness of the customer individual.

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

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

During the year ended 31st March 2017, there were no transfers between level 1 and level 2 fair value measurements and no transfers into and out of level 3 fair value measurement.

5. FINANCIAL INSTRUMENT

Financial Risk Management Policy and Objectives

The Company’s principal financial liabilities comprise of short term borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, Cash and Cash equivalents, which are derived directly from its operations.

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

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

The Cash and Cash equivalents are held with Banks and financial institutions counter-parties with an external rating of “AAA”. Thus, the Company considers that its Cash and Cash equivalents have low credit risks.

6. DIVIDEND

The Board of Directors has recommended payment of Dividend of Rs, 10 per fully paid Equity Shares (31st March 2016:Rs, Nil). This proposed dividend is subject to the approval of Shareholders in the ensuing Annual General Meeting. The Company to pay distribution tax of Rs, 268 Lakhs on proposed dividend. This dividend and tax on that is not recognized in the books of account at the end of the reporting period.

7. TRANSFERTO INVESTOR EDUCATION AND PROTECTION FUND

All amounts, which became due, for transfer to the Credit of Investor Education and Protection Fund, as of 31st March 2017, have been transferred to that fund, except a sum of Rs, 1 Lakh (31st March 2016:Rs,1 Lakh) being amount of 5 (31st March 2016:5) fixed deposits and interest thereon amounting to Rs, 25,051 (31st March 2016:Rs, 25,051). In view of the directives received from the Government Authorities, these amounts are not transferred to the Fund, being involved in an investigation.

8. During the year under report the eligibility and method of availing various incentives, granted by the Government of Madhya Pradesh, as per the Industrial Promotion Policy, being clarified, the Company recognized a sum of Rs, 3,146 Lakhs (31st March 2016: Rs, 2,606 Lakhs) in the Statement of Profit and Loss as “Industrial Investment Incentives”. These incentives are accounted on accrual basis. These incentives are available as per the Industrial Promotion Policy of the Government of Madhya Pradesh, based on the investment made by the Company, in eligible assets, for eligible products, in the State of Madhya Pradesh. These incentives are monetary incentives.

9. The Company has spent Rs, 300 Lakhs (31st March 2016:Rs,138 Lakhs) towards Corporate Social Responsibility (CSR), which is shown in “Other Expenses” [Note No.28 (m)] to the Notes to Financial Statements.

10. EXCEPTIONAL ITEMS

In the month of September 2016, the Company recalled the welfare trust, created by the Company and accordingly the trustees of the said trust transferred immovable property situated at Mahabaleshwar, Taluka Wai, District Satara, admeasuring 9,408.97 Sq. mtrs. to the Company by Registered Revocation Deed. Accordingly sum of Rs, 95 Lakhs, being the amount contributed by the Company to the said trust, has been recognized as ''Exceptional Item'' and said asset is capitalized.

(viii) Proposed Dividend

Under Indian GAAP dividend proposed after the date of the financial statements, but prior to the approval of financial statements, is considered as an adjusting event and a provision for dividend is recognized in the financial statements of the period to which the dividend relates. Under Ind AS, dividend declaration is considered as a non-adjusting event and provision for dividend is recognized only in the period when the dividend is approved by the Shareholders in the Annual General Meeting.

(ix) Government Grant

Under Indian GAAP grant in the nature of Promoter''s contribution is directly recognized in Equity. Under Ind AS, grant received is not allowed to be directly recognized in Equity. The liability relating to asset related grant received is amortized to the Statement of Profit and Loss on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. This is equity neutral adjustment as assets for which grants are received are fully depreciated on Ind AS transition date i.e. 1st April 2015.

(x) Investment Property

Under Indian GAAP there is no comprehensive guidance for recognition and measurement of Investment Property. Under Ind AS, property (land or building or both) held for earnings lease rentals or for capital appreciation is treated as Investment Property. This adjustment for reclassification is equity neutral adjustment.

(xi) Deferred Taxes

Under Indian GAAP deferred taxes are recognized using income statement approach i.e. reflecting the tax effects of timing differences between accounting income and taxable income for the periods. Under Ind AS, deferred taxes are recognized using balance sheet approach (i.e. reflecting the tax effects of temporary differences between the carrying amounts of assets and liabilities) for financial reporting purposes and the amounts used for taxation purposes using the income tax rates enacted or substantively enacted at reporting date. Also, deferred taxes are recognized on account of the above mentioned changes explained in notes (d) (i) to (x), wherever applicable.

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Mar 31, 2016

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

The Fund Based Limits (sanctioned as a sub-limit to the Non-fund Based Limits), if utilized, are payable on demand to the Banks. During the year 2015-16, the Company has not utilized any fund based limits.

2. All amounts which became due, for transfer to the Credit of Investor Education and Protection Fund, as of 31st March, 2016, have been transferred to that fund, except a sum of Rs. 60,000 being amount of 5 (five) fixed deposits and interest thereon amounting to Rs. 25,051. In view of the directives received from the Government Authorities, these amounts are not transferred to the Fund, being involved in an investigation.

3. As per the Accounting Standard AS 26 - Intangible Assets, the Company has recognized Intangible Assets arising out of in-house Research and Development activities of the Company amounting to Rs. 22,14,63,548 (Rs. 6,07,27,190).

As the development activity is continued, the said asset is considered as Capital Work-in-progress, and will be amortized over the period of its life, after completion of the development phase.

4. During the year under report the eligibility and method of availing, various incentives, granted by the Government of Madhya Pradesh, as per the Industrial Promotion Policy, being clarified, the Company recognized a sum of Rs. 26,05,82,857 (Rs. 20,73,01,099) in the Statement of Profit & Loss as “Industrial Investment Promotion Assistance”. These incentives are now accounted on accrual basis. These incentives are available as per the Industrial Promotion Policy of the Government of Madhya Pradesh, based on the investment made by the Company, in eligible assets, for eligible products, in the State of Madhya Pradesh. These incentives are monetary incentives.

5. The Company has spent Rs. 1,38,00,000 towards Corporate Social Responsibility (CSR) activities, which is shown in “Other Expenses” [ Note No. 26 (n)] to the Notes to Account.

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Mar 31, 2015

1. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for)

As at 31st As at 31st March, 2015 March, 2014 Rs. Rs.

(a) Contingent Liabilities

(i) Taxes & Duties 46,73,90,719 29,66,45,603

(ii) Others (Court cases pending) 32,94,43,302 29,19,19,172

(b) Commitments

Estimated amount of contracts remaining to be executed on 76,42,58,903 77,94,02,336 capital account and not provided for

(c) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable agreement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional/unfounded claims are Not as per the applicable law nor these claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as per the provisions of Schedule III to the Companies Act, 2013, only to indicate the alleged claims made against the Company and the developments in respect thereof. Moreover, considering the period lapsed, since the conclusion of the said legal proceedings, the Company does not expect any impact of this litigation on its financial position.

2. As of 31st March, 2015, the Company has not received any intimation, except in few cases, as to the status as Micro, Small or Medium Enterprises from suppliers of the Company along with a copy of the Memorandum, filed by the said suppliers, as per the provisions of Section 8 of the Micro, Small & Medium Enterprises Development Act, 2006 (the Act). The proceedings initiated by one of the suppliers, claiming to be a small scale enterprise, as per the provisions of Section 18 of the Act, culminated into an award of claim for Rs. 1,56,61,877 with interest. The Company has not accepted the said liability. The Company has a major counter-claim against the said supplier amounting to about Rs. 9,06,40,899, which being unearned income, is not accounted. The award is challenged by the Company, as per the provisions of the Act and proceedings are pending before the Hon'ble District Judge, Pune, and before the Hon'ble High Court of Judicature at Bombay.

3. LEASES

Operating Leases :

(a) Assets taken on Lease :

The Company has taken 10 vehicles on operating lease for a period of 4 years. Lease rentals are recognised in the Statement of Profit and Loss.

(b) Assets given on Lease :

(i) Industrial Shed at Chakan :

The Company has entered into a Lease Agreement for Industrial Shed for a period of 10 years.

The said agreement provides for progressive increase in rentals during the tenure of the agreement.

The Lessee is entitled to terminate the Lease Agreement after the expiry of 60th month from the date of agreement. The Lessor is also entitled to terminate the Lease Agreement, if the Lessee defaults the terms and conditions of the Lease Agreement.

The Lease income has been recognised in Statement of Profit and Loss.

4. RELATED PARTY DISCLOSURES (As identified by the Management)

(A) Name of the related parties and nature of related party relationship where control exists are as under :

(a) Subsidiary Company : Tempo Finance (West) Private Limited

(b) Key Management : Mr. Abhaykumar Firodia, Chairman. Personnel : Mr. Prasan Firodia, Managing Director

(c) Relatives of Key Management Personnel

(i) Mr. Abhaykumar Firodia : Mr. Prasan Firodia : Son

(ii) Mr. Prasan Firodia : Mr. Abhaykumar Firodia : Father

(d) Other related parties : Jaya Hind Industries Ltd.

: Jaya Hind Investments Pvt. Ltd. : Jaya Hind Montupet Pvt. Ltd.

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

The fund based limits, if utilised, are payable on demand to the Banks. During the year 2014-15, the Company has not utilised any fund based limits.

6. All amounts which became due, for transfer to the Credit of Investor Education and Protection Fund, as of 31st March, 2015, have been transferred to that fund, except a sum of Rs. 60,000 being amount of 5 (five) fixed deposits and interest thereon amounting to Rs. 25,051. In view of the directives received from the Government Authorities, these amounts are not transferred to the Fund, being Involved in an investigation.

7. As per the Accounting Standard AS 26 - Intangible Assets, the Company has recognised Intangible Assets arising out of in-house Research and Development activities of the Company amounting to Rs. 6,07,27,190 (Rs. 11,73,96,866), in the development phase of a new model Multipurpose Vehicles, Monocoque Bus (Project T2) and TD 2650 CRDI BS IV version of the SUV. As the development activity is continued, the said asset is considered as Capital Work-in-progress, and will be amortized over the period of its life, after completion of the development phase.

8. During the year under report the eligibility and method of availing, various incentives, granted by the Government of Madhya Pradesh, as per the Industrial Promotion Policy, being clarified, the Company recognised a sum of Rs. 20,73,01,099 (Rs. 29,15,86,018) in the Statement of Profit & Loss as "Industrial Investment Promotion Assistance". These incentives are now accounted on accrual basis. These incentives are available as per the Industrial Promotion Policy of the Government of Madhya Pradesh, based on the investment made by the Company, in eligible assets, for eligible products, in the State of Madhya Pradesh. These incentives are monetary incentives.

9. The Company has spent Rs. 88,00,000 towards Corporate Social Responsibility (CSR) activities, which is included in "Miscellaneous Expenses"[ Note No. 26 (n)]to the Notes to Account.

10. The Company is operating in a Single Segment.

11. Previous year/period's figures are re-arranged wherever necessary and shown in brackets.

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Mar 31, 2014

1. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

As at 31st As at 31st March, 2014 March, 2013

(a) Contingent Liabilities

(i) Taxes & Duties 29,66,45,603 23,97,54,153

(ii) Others (Court cases pending) 29,19,19,172 26,07,24,115

(b) Commitments

Estimated amount of contracts remaining to be executed on 77,94,02,336 91,44,14,860 capital account and not provided for

(c) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable agreement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional / unfounded claims are not as per the applicable law nor these claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as per the provisions of Schedule VI to the Companies Act, 1956, only to indicate the alleged claims made against the Company and the developments in respect thereof.

2. As of 31st March, 2014, the Company has not received any intimation, except in few cases, as to the status as Micro, Small or Medium Enterprises from suppliers of the Company along with a copy of the Memorandum, filed by the said suppliers, as per the provisions of Section 8 of the Micro, Small & Medium Enterprises Development Act, 2006 (the Act). The proceedings initiated by one of the suppliers, claiming to be a small scale enterprise, as per the provisions of Section 18 of the Act, culminated into an award of claim for Rs. 1,56,61,877 with interest. The Company has not accepted the said liability. The Company has a major counter-claim against the said supplier amounting to about Rs. 9,06,40,899, which being unearned income, is not accounted. The award is challenged by the Company, as per the provisions of the Act and proceedings are pending before the Hon''ble District Judge, Pune, and before the Hon''ble High Court of Judicature at Bombay.

3. The amount of net exchange differences included in the Profit / Loss for the year on Revenue account is Rs. 3,94,14,600 Debit (Rs. 38,03,005 Credit) and on Capital account is Rs. 78,83,835 Debit (Rs. 17,58,239 Credit).

4. LEASES

Operating Leases :

(a) Assets taken on Lease :

The Company has taken 10 vehicles on operating lease for a period of four years. Lease rentals are recognised in the Statement of Profit and Loss.

(b) Assets given on Lease :

(i) Industrial Shed at Chakan :

The Company has entered into a Lease Agreement for Industrial Shed for a period of 10 years.

The said agreement provides for progressive increase in rentals during the tenure of the agreement.

The Lessee is entitled to terminate the Lease Agreement after the expiry of 60th month from the date of agreement. The Lessor is also entitled to terminate the Lease Agreement, if the Lessee defaults the terms and conditions of the Lease Agreement.

(ii) Freehold land at Akurdi :

Out of the freehold land at Akurdi, 2700 sq. mtrs. (cost ~ 1,374) of land has been given on lease to Maharashtra State Electricity Distribution Company Limited for 99 years, w.e.f. 1st August, 1989. Lease rentals are recognised in the Statement of Profit and Loss

The estimates of the future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

The Liability for Earned Leave, for Temporary Employees (short term) has been provided on actual basis, amounting to -6,23,220 (-11,86,953).

5. RELATED PARTY DISCLOSURES (As identified by the Management)

(A) Name of the related parties and nature of related party relationship where control exists are as under :

(a) Subsidiary Company : Tempo Finance (West) Private Limited

(b) Key Management : Mr. Abhaykumar Firodia, Chairman.

Personnel : Mr. Prasan Firodia, Managing Director

(c) Relatives of Key Management Personnel

(i) Mr. Abhaykumar Firodia : Mr. Prasan Firodia : Son

(ii) Mr. Prasan Firodia : Mr. Abhaykumar Firodia : Father

(d) Other related parties : Jaya Hind Industries Ltd.

: Jaya Hind Investments Pvt. Ltd.

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

The fund based limits, if utilised, are payable on demand to the Banks. During the year 2013-14, the Company has not utilised any fund based limits.

7. All amounts which became due, for transfer to the Credit of Investor Education and Protection Fund, as of 31st March, 2014, have been transferred to that fund, except a sum of Rs. 60,000 being amount of 5 (five) fixed deposits and interest thereon amounting to Rs. 25,051. In view of the directives received from the Government Authorities, these amounts are not transferred to the Fund, being involved in an investigation.

8. As per the Accounting Standard AS 26 - Intangible Assets, the Company has recognised Intangible Assets arising out of in-house Research and Development activities of the Company amounting to Rs. 11,73,96,866 (Rs. 6,65,42,452), in the development phase of a new model Multipurpose Vehicles, Monocoque Bus (Project T2) and TD 2650 CRDI BS IV version of the SUV. As the development activity is continued, the said asset is considered as Capital Work-in-progress, and will be amortized over the period of its life, after completion of the development phase.

9. During the year under report the eligibility and method of availing, various incentives, granted by the Government of Madhya Pradesh, as per the Industrial Promotion Policy, being clarified, the Company recognised a sum of Rs. 29,15,86,018 in the Statement of Profit & Loss as "Industrial Investment Promotion Assistance". These incentives are now accounted on accrual basis. These incentives are available as per the Industrial Promotion Policy of the Government of Madhya Pradesh, based on the investment made by the Company, in eligible assets, for eligible products, in the State of Madhya Pradesh. These incentives are monetary incentives.

10. The Company is operating in a Single Segment.

11. Previous year/period''s figures are re-arranged wherever necessary and shown in brackets.

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Mar 31, 2013

1. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

As at 31st As at 31st March'' 2013 March'' 2012

(a) Contingent Liabilities

(i) Taxes & Duties 23''97''54''153 21''54''37''011

(ii) Others (Court cases pending) 26''07''24''115 23''69''33''376

(b) Commitments

Estimated amount of contracts remaining to be executed on 91''44''14''860 113''24''30''846 capital account and not provided for

Part of the estimated amount of commitments supported by letter(s) of credit issued by a Bank NIL (Rs. 18''24''05''604). The Bank holds charge on the assets of the Company'' as a security'' enforceable in case of default'' being made by the Company.

(c) As reported earlier'' a foreign company has initiated legal proceedings in a foreign court'' in respect of notional and unfounded claims for damages'' without there being any enforceable agreement'' relating to export business. The Company has obtained opinion from a Senior Counsel'' in respect of these alleged claims against the Company. The Company has been advised that such notional / unfounded claims are notasper the applicable law nor these claims'' if any'' can be enforced in the Court of LawinIndia. This information is being disclosedas per the provisions ofSchedule VI to the Companies Act'' 1956'' only to indicate the alleged claims made against the Company and the developments in respect thereof.

2. As of 31st March'' 2013'' the Company has not received any intimation'' except in few cases'' as to the status as Micro'' Small or Medium Enterprises from suppliers of the Company along with a copy of the Memorandum'' filed by the said suppliers'' as per the provisions of Section 8 of the Micro'' Small & Medium Enterprises Development Act'' 2006 (the Act). The proceedings initiated by one of the suppliers'' claiming to be a small scale enterprise'' as per the provisions of Section 18 of the Act'' culminated into an award of claim with interest for Rs. 1''56''61''877. The Company has not accepted the said liability. The Company has a major counter-claim against the said supplier amounting to about Rs. 9''06''40''899'' which being unearned income'' is not accounted. The award is challenged by the Company'' as per the provisions of the Act and proceedings are pending before the Hon''ble District Judge'' Pune'' and before the Hon''ble High Court ofJudicatureat Bombay.

3. The amount of net exchange differences included in the Profit / Loss for the year on Revenue account is Rs. 38''03''005 Credit (Rs. 2''34''23''178/-Credit)andonCapital accountisRs. 17''58''239/- Credit.(Rs.29''23''553/-Credit).

4. LEASES :

Operating Leases :

(a) Assets taken on Lease :

The Company has taken 10 vehicles on operating lease for a period of four years. Lease rentals are recognised in the Statement of Profit & Loss.

(b) Assets given on Lease :

(i) Industrial Shed at Chakan :

The Company has entered into a Lease Agreement for Industrial Shed for a period of 10 years.

The said agreement provides for progressive increase in rentals during the tenure of the agreement.

The Lessee is entitled to terminate the Lease Agreement after the expiry of 60th month from the date of agreement. The Lessor is also entitled to terminate the Lease Agreement'' if the Lessee defaults the terms and conditions of the Lease Agreement.

5. RELATED PARTY DISCLOSURES (As identified by the Management) :

(A) Name of the related parties and nature of related party relationship where control exists are as under :

(a) Subsidiary Company : Tempo Finance (West) Private Limited

(w.e.f. 14th August'' 2012)

(b) Key Management : Mr. Abhaykumar Firodia'' Chairman. Personnel : Mr. Prasan Firodia'' Managing Director

(c) Relatives of Key Management Personnel

(i) Mr. Abhaykumar Firodia : Mr. Prasan Firodia : Son

(ii) Mr. Prasan Firodia : Mr. Abhaykumar Firodia : Father

(iii) Other related parties : Jaya Hind Industries Ltd.

: Jaya Hind Investments Pvt. Ltd.

6. The Consortium of Banks has sanctioned working capital limits - both fund based and non-fund based - to the Company. These limits are secured by hypothecation of Company''s stock of raw materials'' work-in-progress'' finished goods'' consumable stores'' spares'' bills receivable and book debts'' both present and future'' situated atCompany''s factories orat any other place.

The fund based limits'' if utilised'' are payable on demand to the Banks. During the year 2012-13'' the Company has not utilised any fund based limits.

7. All amounts which became due'' for transfer to the Credit of Investor Education and Protection Fund'' as of 31st March'' 2013'' have been transferred to that fund'' except a sum of Rs. 60''000/- being amount of 5 (five) fixed deposits and interest thereon amounting to Rs. 5''580/-. In view of the directives received from the Government Authorities'' these amounts are not transferred to the Fund'' being involvedinan investigation.

8. As per the Accounting Standard AS 26 - Intangible Assets'' the Company has recognised Intangible Assets arising out of in- house Research and Development activities of the Company amounting to Rs. 6''65''42''452/-'' in the development phase of a new model Multipurpose Vehicles. As the development activity is continued'' the said asset is considered as Capital Work-in- progress'' and will beamortized over the period ofits life'' after completion ofthe development phase.

9. The Companyis operatinginaSingle Segment.

10. Previous year/period''s figures are re-arranged wherever necessary and showninbrackets.

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Mar 31, 2012

(a) Terms/rights attached to equity shares :

The Company has issued equity shares. All equity shares issued rank pari passu in respect of distribution of dividend and repayment of capital. 13,032,914 equity shares are quoted equity shares with no restriction on transfer of shares. 27,600 equity shares are A' equity shares which are transferrable only to permanent employees of the Company. 1,15,748 equity shares are Second A' equity shares which are transferrable to permanent employees, who have put in five years of service with the Company.

(b) The Board of Directors has recommended a dividend of Rs.10/- (Rs. 5/-) per share on 1,31,76,262 (1,31,76,262) equity shares of Rs.10/- each fully paid up.

(c) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

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

The Company is not a subsidiary of any other company.

(i) The Term Loan availed from Banks was payable in twenty equal quarterly installments along with accrued interest till the date of payment of installment. These loans were secured by a first charge, by way of equitable mortgage, over the immovable properties of the Company and second charge on the stock of material, book debts (whether present or future) and situated at Companies factories at Akurdi, Dist. Pune, Maharashtra and Pithampur, Dist. Dhar, Madhya Pradesh. The charge created in favour of various banks ranked pari passu inter-se. The Company has prepaid the outstanding term loan amounting toRs.11,30,00,000 before 31st March, 2012.

(ii) Deposits included deposits accepted from the Promoters. These deposits were payable based on understanding with the Promoters, which have been repaid before the balance sheet date.

(iii) Other deposits accepted by the Company are for a period ranging between 1 to 3 years from the date of acceptance of each deposits.

The Consortium of Banks, have sanctioned working capital limits - both fund based and non-fund based - to the Company. These limits are secured by hypothecation of Company's stock of raw materials, work-in-progress, finished goods, consumable stores, spares, bills receivable and book debts, both present and future, situated at Company's factories or at any other place.

As of 31st March, 2012, the Company has not utilized any fund based limit. Non-fund based limits were utilized to the extent of Rs. 43,69,55,973. The fund based limits, if utilized, are payable on demand to the Banks.

(i) The Term Loan availed from Banks was payable in twenty equal quarterly installments along with accrued interest till the date of payment of installment. These loans were secured by a first charge, by way of equitable mortgage, over the immovable properties of the Company and second charge on the stock of material, book debts (whether present or future) and situated at Companies factories at Akurdi, Dist. Pune, Maharashtra and Pithampur, Dist. Dhar, Madhya Pradesh. The charge created in favour of various banks ranked pari passu inter-se. The Company has prepaid the outstanding term loan amounting to Rs. 11,30,00,000.

(ii) Deposits accepted by the Company are for a period ranging between 1 to 3 years from the date of acceptance of each deposits.

1. EXCEPTIONAL ITEMS

As reported earlier, during the year underreport, Company as per the terms and conditions of the contractual arrangement with MAN Truck and Bus AG, Germany (MAN), sold and transferred 5,57,97,100 equity shares of MAN FORCE Trucks Private Limited (the said company), now known as MAN Trucks India Private Limited, to MAN for a consideration of Euro 15,00,00,000 (equivalent amount received in Rs. 1016,50,65,000). With the transfer of these shares of the said company, the said company ceases to be a Joint Venture between the Company and MAN. The Company will continue to support the said company by rendering services for limited period. The gain arising out of sale and transfer of the shares of the said company has been treated as an exceptional item.

2. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for) As at 31st As at 31st March, 2012 March, 2011

(a) Contingent Liabilities

(i) Taxes & Duties 21,54,37,011 19,89,82,542

(ii) Others (Court cases pending) 23,69.33,376 21,75,49,955

(b) Commitments

Estimated amount of contracts remaining to be executed on 113.24,30,846 47,98,62,487 capital account and not provided for

Part of the estimated amount of commitments, referred above, being Rs. 18,24,05,604 is secured by a letter of credit issued by a Bank. The Bank holds charge on the assets of the Company, as a security, enforceable in case of default, being made by the Company.

(c) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable agreement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional / unfounded claims are not as per the applicable law nor these claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as per the provisions of Schedule VI to the Companies Act, 1956, only to indicate the alleged claims made against the Company and the developments in respect thereof.

3. As of 31st March, 2012, the Company has not received any intimation, as to the status as a Micro, Small or Medium Enterprises from any of the suppliers, with a copy of the Memorandum filed as per the provisions of Section 8 of the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). One of the suppliers initiated proceedings, under Section 18 of the Act, which were converted into arbitration proceedings as per the provisions of Section 18(3) of the Act. These proceedings culminated in an arbitration award, awarding a claim of Rs.1,56,61,877 including interest. Out of the said sum, a sum of Rs. 40,41,660 is part of the trade payables disclosed at Sr. No. 3(b) of the Balance Sheet as at 31st March, 2012. The amount of interest has not been provided by the Company, as the Company has not accepted the liability. Moreover, the Company has a counter-claim on the said supplier amounting to about Rs. 9,06,40,899, which being an unearned income is not accounted. The Company is seeking legal advice for initiating appropriate proceedings, including before the Hon'ble High Court of Judicature at Bombay, for challenging the award and/or the procedure followed by the Micro and Small Enterprises Facilitation Council, (the Arbitrator), as may be advised.

4. LEASES :

Operating Leases :

(a) Assets taken on Lease :

The Company has taken 10 vehicles on operating lease for a period of four years.

Lease rentals are recognised in the Statement of Profit & Loss.

(b) Assets given on Lease :

(i) Industrial Shed at Chakan :

The Company has entered into a Lease Agreement for Industrial Shed for a period of 10 years.

The said agreement provides for progressive increase in rentals during the tenure of the agreement.

The Lease is entitled to terminate the Lease Agreement after the expiry of 60th month from the date of agreement. The Lessor is also entitled to terminate the Lease Agreement, if the Lease defaults the terms and conditions of the Lease Agreement.

The Lease income has been recognised in Statement of Profit & Loss.

On termination of lease, due to exercise of the option by the Lessee, at the end of 60 months, the Lessee shall be liable to pay a sum ofRs. 2,00.00,000/-.

(ii) Freehold land at Akurdi :

Out of the freehold land at Akurdi, 2700 sq. mtrs. (costRs. 1,374/-) of land has been given on lease to Maharashtra State Electricity Distribution Company Limited for 99 years, w.e.f. 1st August, 1989. Lease rentals are recognised in the Statement of Profit & Loss.

5. As reported earlier, during the year under report, Company as per the terms and conditions of the contractual arrangement with MAN Truck and Bus AG, Germany (MAN), sold and transferred 55,797,100 equity shares of MAN FORCE Trucks Private Limited (the said company), now known as MAN Trucks India Private Limited, to MAN for a consideration of Euro 15,00,00,000 (equivalent amount received in Rs. 1016,50.65,000). With the transfer of these shares of the said company, the said company ceases to be a Joint Venture between the Company and MAN. The Company will continue to support the said company by rendering services for limited period. The gain arising out of sale and transfer of the shares of the said company has been treated as an exceptional item.

6. All amounts which became due, for transfer to the Credit of Investor Education and Protection Fund, as of 31 st March, 2012, have been transferred to that fund, except a sum of Rs. 60,000/- being amount of 5 (five) fixed deposits and interest thereon amounting to Rs. 25,051 /-. In view of the directives received from the Government Authorities, these amounts are not transferred to the Fund, being involved in an investigation.

7. The Company is operating in a Single Segment.

8. Previous year/period's figures are re-arranged wherever necessary and shown in brackets.

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Mar 31, 2011

1. (a) The Company's Income-tax and Wealth-tax assessments have been completed upto the accounting year 2007-2008.

(b) The Company is registered as a dealer under various State Sales Tax Laws. The Company's Sales-tax assessments have been completed upto the accounting year 2004-2005 of Akurdi Plant & 2008-2009 of Pithampur Plant.

2. Contingent Liability in respect of :

31-3-2011 31-3-2010

Rs. Rs.

(a) Letters of Credit and Bank Guarantees outstanding 28,64,21,365 16,77,31,479

(b) Taxes and Duties 19,89,82,542 17,70,06,859

(c) Others 21,75,49,955 20,86,22,597

(d) As reported earlier, a foreign company has initiated legal proceedings in a foreign court, in respect of notional and unfounded claims for damages, without there being any enforceable arrangement, relating to export business. The Company has obtained opinion from a Senior Counsel, in respect of these alleged claims against the Company. The Company has been advised that such notional / unfounded claims are not as per the applicable law nor these claims, if any, can be enforced in the Court of Law in India. This information is being disclosed as per the provisions of Schedule VI to the Companies Act, 1956, only to indicate the alleged claims made against the Company and the developments in respect thereof.

3. As of 31st March, 2011, the Company has not received any intimation as to the status as a Micro, Small & Medium Enterprises from any of the suppliers, with a copy of the Memorandum filed as per the provisions of Section 8 of the Micro, Small and Medium Enterprises Development Act, 2006.

4. Leases :

Operating Leases :

(a) Assets taken on Lease :

The Company has taken office / residential premises (including furniture fittings therein as applicable), guest houses and vehicles for the use by its employees / business use, on Operating Lease.

Lease terms in respect of office / residential premises are on the basis of individual agreements entered into with the landlord.

The lease term in respect of vehicles is for 4 years.

Lease rent payments are recognised in the Profit & Loss Account.

(b) Assets given on Lease :

The Company has entered into a Lease Agreement for Industrial Shed for a period of 10 years.

The said arrangement provides for progressive increase in rentals during the tenure of the agreement.

The Lessee is entitled to terminate the Lease Agreement after the expiry of 60th month from the date of agreement. The Lessor is also entitled to terminate the Lease Agreement, if the Lessee defaults the terms and conditions of the Lease Agreement.

The estimates of the future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market. The Liability for Earned leave, for Temporary Employees (short term) has been provided on actual basis, amounting to Rs. 14,13,732/- (Rs. 10,34,864/-). 21. Related party disclosures ( As identified by the Management )

(A) Name of the related parties and nature of related party relationship where control exists are as under :

(a) Joint Venture Company : MAN FORCE TRUCKS Private Limited

(b) Key Management Personnel : Mr. Abhay Firodia

Chairman

: Mr. Prasan Firodia Managing Director

(c) Relatives of Key Management Personnel :

(i) Mr. Abhay Firodia : Mr. Prasan Abhay Firodia : Son

: Mrs. Sunanda Sudhir Mehta : Daughter

: Mrs. Kamla Bansilal Bhandari : Sister

(ii) Mr. Prasan Firodia : Mr. Abhay Navalmal Firodia : Father

: Mrs. Sunanda Sudhir Mehta : Sister

(d) Other Related Parties : Jaya Hind Investments Pvt. Ltd.

: Jaya Hind Industries Ltd.

: Pinnacle Industries Limited

5. No amount as on 31st March, 2011, became due for transfer to the credit of the Investors Education and Protection Fund.

6. Sundry Debtors include Rs. 78,54,35,038/- being the amount receivable from MAN FORCE TRUCKS Private Limited.

7. The Company is operating in a Single Segment.

8. Previous year's figures are re-arranged wherever necessary and shown in brackets.

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Mar 31, 2010

1. (a) The Companys Income-tax and Wealth-tax assessments have been completed upto the accounting year 2006-2007.

(b) The Company is registered as a dealer under various State Sales Tax Laws. The Companys Sales-tax assessments have been completed up to the accounting year 2004-2005 of Akurdi Plant & 2006-2007 of Pithampur Plant.

2. Contingent Liability in respect of : Rupees Rupees

(a) Letters of Credit and Bank Guarantees outstanding 16,77,31,479 (11,51,92,204)

(b) Taxes and Duties 17,70,06,859 (14,04,13,794)

(c) Others 20,86,22,597 (18,31,75,443)

Based on the allegation that Education Cess is payable on Automobile Cess, the Central Excise Department, Pithampur, issued four Show Cause Notices in respect of Excise Duty paid by utilising Cenvat Credit availed by the Company demanding duty of Rs. 275,03,92,760/-. The very basis of this alleged demand does not survive, in view of the subsequent decision of the Excise Authorities at Pithampur that the Education Cess is not payable on Automobile Cess.

(d) A foreign company has initiated legal proceedings in a court, having no jurisdiction, claiming notional and unfounded damages, relating to export business, which was not entered into by the Company. The Company has not submitted to the jurisdiction of the foreign court, as advised. This information is disclosed as per the provisions of Schedule VI to the Companies Act, 1956 only to indicate the alleged claims made against the Company.

3. As of 31st March, 2010, the Company has not received any intimationastothe statusasaMicro, Small &Medium Enterprises from any of the suppliers, with a copy of the Memorandum filed as per the provisions of Section 8 of the Micro, Small andMedium Enterprises Development Act, 2006.

Considering the increase in turnover of the Company, profits for the year ended on 31st March, 2010, growth in the sale of types of products being manufactured and sold by the Company, the Board of Directors of the Company is of the opinion that the Deferred Tax Asset arising out of expenses incurred, provisions made being timing difference and the Deferred Tax Asset in respect of carry forward business losses, as on 31st March, 2009 after considering the profit for the financial year ended on that day need to be recognised as per the provisions of Accounting Standard 22 being part of the Companies (Accounting Standards) Rules, 2006. Accordingly, the Companyhas recognised the Deferred TaxAssetsofRs.22,64,16,649,asdetailed above.

The estimates of the future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and otherrelevant factors, suchasdemand and supplyinthe employment market. The Liability for Earned leave, for Temporary Employees (short term) has been provided on actual basis, amounting to Rs. 10,34,864/-(Rs. 1,59,316/-).

4. Related party disclosures(As identified by the Management )

(A) Name of the related parties and nature of related party relationship where control exists are asunder :

(a) JointVentureCompany : MANFORCETRUCKSPrivateLimited

(b) Key Management Personnel : Mr. Abhay Firodia

Chairman

: Mr. Prasan Firodia Managing Director

(c) RelativesofKey Management Personnel :

(i) Mr. Abhay Firodia : Mr. Prasan Abhay Firodia : Son

: Mrs. Sunanda Sudhir Mehta : Daughter

: Mrs. Kamla Bansilal Bhandari : Sister

(ii) Mr. Prasan Firodia : Mr. Abhay Navalmal Firodia : Father

: Mrs. Sunanda Sudhir Mehta : Sister

(d) Other Related Parties : Jaya Hind Investments Pvt. Ltd.

: Jaya Hind Industries Ltd. : Pinnacle Industries Limited

5. (a) As reported earlier, the Company obtained Licenses, in respect of Technology and Know-how, for manufacture of Gear Boxes. The Company was in discussion with the Licensor viz. ZF Friedrichshafen AG, Germany, in respect of exhaustive arrangement connected with these licensed products, but as the Company and the Licensor could not reach an agreement in respect of various aspects of technology and business, as agreed, the licensor permitted to retain part of the advance received by the Company. This arrangement; thus has resulted in gain arising out of the Licensing Agreement. The said gain of Rs. 21,11,10,000 has been treated as a non-revenue gain and exceptional item as it relates to intangible assets ownedbythe Company.

(b) During the year under report, the Company sold 4,22,050 equity shares of Rs. 10 each of Tempo Finance (West) Private Limited,erstwhile subsidiaryofthe Company, and madeagainofRs. 54,86,650.

(c) As per the provisionsofScheduleVIofthe Companies Act, 1956 and guidance note issued bythe Institute of Chartered Accountants of India, the above gains have been credited to the Profit & loss Account for the financial year 2009-10.

6. No amount, as on 31st March, 2010, became due for transfer to the credit of the Investors Education and Protection Fund.

7. Sundry Debtors include Rs.91,01,96,865, being the amount receivablefrom MAN FORCE TRUCKS Pvt. Ltd.

8. The Company is operating in a Single Segment.

The Companys interest in the Joint Venture is reported as Long Term Investments (Schedule 6)and stated at cost. The Companys share of each of the assets, liabilities, income and expenditure (each without elimination of, the effect of transactions between the Company and the joint venture), contingent liabilities and capital commitments as at 31st March, 2010 are as under :

III. Contingent Liabilities

9. Previous year / periods figures are re-arranged wherever necessary and shown in brackets. As per our separate report of even date attached