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Notes to Accounts of Jamna Auto Industries Ltd.

Mar 31, 2015

1 Contingent liability

As at As at March 31, 2015 March 31, 2014

Contingent liability

i. Income tax 1,305.00 954.85

ii. Claims against company not acknowledged as debts (civil cases) 294.09 336.56

iii. Custom and excise duty / service tax 59.90 46.03

iv. Sales tax and entry tax 38.82 6.37

v. Guarantee given by the Company 5,000.00 5,000.00

vi. Bank guarantees 286.52 41.81

6,984.33 6,385.62

In relation to i above income tax matters contested by the Company comprise of:

1) With respect to assessment year 2010-11 to 2012-13, the assessing officer has added to the income of the Company, a notional interest amounting to Rs 32.40 on certain interest free advances given by the Company. The tax impact of the same is Rs 11.01 (Previous year: Rs. Nil). The Company has preferred appeal with CIT (A) and based on internal assessment, the Company is confident of a favorable outcome.

2) With respect to assessment year 2008-09 to 2012-13 the assessing officer has disallowed certain expenses amounting to Rs. 143.74 on adhoc basis. Tax impact of the same is Rs. 48.85 (Previous year: Rs. 39.66). The Company has preferred an appeal with CIT (A) and based on internal assessment and discussion with its legal counsel is confident of a favorable outcome.

3) With respect to assessment year 2009-10 the assessing officer has increased income of the Company by Rs. 2,560.85 contending that the Company has concealed production and sales to that extent. Tax impact of the same is Rs. 870.43 (Previous year: Rs. 870.43). The Company has preferred an appeal with CIT (A) and based on internal assessment and discussion with legal counsel, the management is confident of a favorable outcome.

4) During the year, the Company received an assessment order with respect to assessment year 2012-13. The assessing officer has increased the taxable income of the Company by Rs 1,095.73 contending that it has sold material of its subsidiary form (Jai Suspension System LLP (JSSLLP) at lower margin in order to divert its profits to JSSLLP as JSSLLP was enjoying tax exemption during that year. Tax impact of the same is Rs. 372.46 (Previous year: Rs. Nil). The Company is in process of fling an appeal against this order and based on discussion with the legal counsel is confident of a favorable outcome.

5) With respect to the assessment year 2010-11, the assessing officer has increased the taxable income of the Company by Rs 6.62 contending that it has disclosed lower scrap sales during that year. Tax impact of the same is Rs 2.25 (Previous year: Rs. 7.07). The Company, based on internal assessment and discussion with its legal counsel is confident of a favorable outcome.

6) With respect to the assessment years 2005-06, 2006-07 and 2008-09 the assessing officer has added to the income of the Company notional interest amounting to Rs. 92.61 on certain interest free deposits given by it. The matter has been settled during the year. Tax impact of the same is Rs. Nil (Previous year: Rs. 31.47).

7) With respect to the assessment years 2008-09 the assessing office has disallowed certain penalties amounting to Rs. 18.29 which were already disallowed by the Company while fling its return of income. The matter has been settled during the year. The tax impact of the same is Rs. Nil (Previous year: Rs. 6.22).

In relation to iii above Custom and excise matters contested by the Company comprise of:

1) Matter pending with Central Excise and Service Tax Appellate Tribunal (CESTAT) in respect of Cenvat Credit availed by the Company on Additional Duty of Custom paid while import the material during the year 2008-09. The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs. 40.24 (Previous year Rs. 40.24).

2) Matter pending with Commissioner Appeal in respect of Cenvat Credit availed by the Company on service tax paid on charges of Custom House Agent for export of finished goods after clearance from the factory for the period from November 2005 to March 2010. The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs. 2.62 (Previous year Rs. 2.62).

3) Matter pending with Commissioner Appeal in respect of Cenvat Credit availed by the Company on service tax paid to the transport agency for outward transportation of the goods for the period 2008-09 to 2013-14. The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The amount involved is Rs. 17.04 (Previous year Rs. 3.17).

In relation to iv above sale tax/entry tax matters contested by the Company comprise of:

1) Matter pending with High court Allahabad in respect of penalty demanded by sales tax department against incomplete information in form 38 for the year 2009. During the year, the matter has been decided in favour of the Company. The amount involved is Rs. Nil (Previous year Rs. 6.37).

2) Matter pending before Sales Tax Appellate Tribunal, Chennai in respect of demand by sales tax department against sales tax not paid on finished goods treated as export of goods. The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The Amount involved is Rs. 4.85 (Previous year Rs. Nil).

3) Matter pending before High Court, Gwalior in respect of demand by sales tax department against entry tax paid on raw material. The Company has done an analysis and is of the opinion that it has fair chance of favorable decision. The Amount involved is Rs. 33.97 (Previous year Rs. Nil).

2. Related party disclosures

A) Names of related parties and relationship

I. Related parties where control exists Jai Suspension Systems LLP

II. Related parties under Accounting Standard-18 (AS-18), "Related Parties Disclosure", with whom transactions have taken place during the year

a. Associates MAP Auto Limited

b. Key Managerial Personnel and their relatives

Mr. B.S. Jauhar Chairman

Mr. R.S. Jauhar CEO and Executive Director

Mr. P.S. Jauhar COO and Executive Director

Mr. S.P.S. Kohli up to 30th May 2013 President and Executive Director

Mr. H.S. Gujral w.e.f 31st May 2013 Executive Director

c. Relatives of Key Managerial Personnel

Mrs. Khem Kaur Relative of Key Managerial Personnel

Mrs. Sonia Jauhar Relative of Key Managerial Personnel

Mrs. Kiran Chadha Relative of Key Managerial Personnel

d. Enterprises controlled, owned or significantly influenced by individuals having significant influence over the Company

or their relatives

Jamna Agro Implements Private Limited

S.W. Farms Private Limited

Map Auto Limited

Winthrop Marketing up to 30th May 2013

B.S. Jauhar (HUF)

III Additional Related parties as per the Companies Act 2013, with whom transactions have taken place during the year:

Chief Financial Officer Mr. Vivek Bhatia

Company Secretary Mr. Praveen Lakhera

Enterprises in which Director is a member MAP Auto Limited

Jamna Agro Implements Private Limited S.W. Farms Private Limited

3. Obligation on long term non-cancellable operating lease

The Company has entered into certain operating leases for office premises and guest houses. These leases have an average life of 11 months. These leases are renewable on mutual consent of lessor and the Company. There are no restrictions placed upon the Company by entering into these leases. During the year, the Company has incurred Rs. 120.72 (Previous year: Rs. 154.32) as rental expense. There is no non-cancellable period under these leases.

4. Segment Information

(a) Business segment

The Company is engaged in the business of manufacturing and selling of parabolic and tapered leaf springs. The entire operations are governed by the same set of risk and returns and, hence, the same has been considered as representing a single primary segment.

Since the Company's business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 'Segment Reporting' other than those already provided in the Financial Statements.

(b) Geographical segment

The analysis of geographical segment is based on the geographical location of the customers. The company operates primarily in India and has presence in international market as well. Its business is accordingly aligned geographically catering to two markets i.e., India and Outside India. For customers located outside India, the company has assessed that they carry same risks and rewards. The company has considered India and Outside India markets as geographical segments and accordingly disclosed these as separate segments. The geographical segment considered for reporting are as follows:

- Sales within India includes sales to customers located within India

- Sales outside India includes sales to customers located outside India

The following is the distribution of the company's revenue from operation (Net) by geographical market, based on the location of the customer, regardless of where the goods were produced

All other assets (other than trade receivables) used in the company's business are located in India and are used to cater both the customers (Within India and Outside India), accordingly the total cost incurred during the year to acquire tangible and intangible fixed assets has not been disclosed.

5. Share based compensation

(a) The Company has issued stock options to its employees in accordance with the Company's Employee Stock Option Scheme 2006 and 2008. Both the Schemes are administered by the Compensation Committee constituted pursuant to SEBI (Share based employee benefits) Regulations, 2014. All the permanent employees of the company and the subsidiaries, including Directors but excluding promoters of the Company are eligible to participate in the Schemes. The Committee grants stock options to the employees at its discretion depending upon criteria such as role/designation of the employee, length of service with the company, past performance record, future potential of the employee and/or such other criteria that may be determined by the Committee.

The stock option shall vest proportionately over the period of 5 years from the date of grant in the ratio of 15% for the first year, 20% for second to forth year and 25% for the ffth year. The options would be granted at the exercise price that is equivalent to the prevailing market price at the time of grant. The exercise price, in cash, is paid by the employee at the time of exercise of the stock option. The option lapses if not exercised within a period of 3 years from the date of vesting of option. The lapsed option is available for being re-granted/ re-issue at a future date. The maximum number of options that may be granted to any specific employee is up to 0.5 % of the issued capital of the company.

(f) The Company had been using intrinsic value method of accounting ESOP expenses as prescribed by SEBI (Share based employee benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based Payments, to account for stock options issued under the Company's stock option schemes. Under this method, compensation expenses are recorded on the basis of excess of the market price of share at the date of grant of option over exercise price of the option. There would be no impact on the profit or earnings per share had the company used the fair value of the options as the method of accounting instead of intrinsic value as the fair value is less than the intrinsic value of the option.

6. Gratuity and other Employee benefits

The Company operates two plans viz ,gratuity and long term service awards for its employees. Under the gratuity plan every employee who has completed at least five years of service gets Gratuity on departure @15 days of last drawn salary for each completed year of service. The scheme is funded with an Insurance Company in the form of a qualifying insurance policy. Under long term service award the employee is entitle to a fixed amount on completion of ten years and fifteen year of service. The Gratuity scheme is funded with an insurance Company in the form of a qualifying insurance policy. The Scheme of Long term service award is unfunded.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

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

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

7. CSR expenditure

(a) Gross amount required to be spent by the Company during the year 54.29

(b) Amount spent during the year on other than construction of assets 56.43

8. During the previous year, the Company had paid Rs. 191.33 towards Directors remuneration. This amount is in excess of permissible remuneration determined under the Companies Act, 1956. Management has fled an application with the Central Government for approval of payment of salary to the Directors in excess of permissible limits. Pending such approval from the government, management has taken a confirmation from the Directors that they shall refund the amounts in the event of such approvals being refused.

9. The Company has been allotted a land at Chennai by State Industrial Promotion Corporation of Tamilnadu Limited (SIPCOT). As per the agreement with SIPCOT the Company was required to start production within 24 months of allotment. The staid period expired in March 2014 and the Company applied for extension for such period up to December 31, 2014 which was approved by SIPCOT. The Company started construction of building and further requested for an extension, on which it is waiting for response from SIPCOT. The management on the basis of discussion, is confident that it shall be able to resolve the issue with SIPCOT amicably and no provision is required in this regard.

10. Previous year figures have been regrouped / reclassified, where necessary, to conform to this year's classification.


Mar 31, 2014

1 Corporate information

Jamna Auto Industries Limited (hereinafter referred to as ''the Company'' or ''JAI'') is a manufacturer of Tapered Leaf and Parabolic springs. The Company''s manufacturing facilities are located at Malanpur, Chennai, Yamuna Nagar, Jamshedpur and Hosur.

2 Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspect of the Accounting Standard (AS) Notifed by the Companies Accounting Standard Rules, 2006 (as amended), and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014, issued by the Ministry of Corporate Affairs to the extent applicable. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

All assets and liabilities have been classifed as current or non- current as per the Company''s normal operating cycle, and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as up to twelve months for the purpose of current/non-current classifcation of assets and liabilities.

3 Related party disclosures

Names of related parties and related party relationship

I. Parties where control exists Jai Suspension Systems LLP

II. Related parties with whom transactions have taken place during the year A. Associates

MAP Auto Limited

B. Key managerial personnel and their relatives

Mr. B.S. Jauhar Chairman

Mr. R.S. Jauhar CEO and Executive Director

Mr. P.S. Jauhar COO and Executive Director

Mr. S.P.S. Kohli up to 30th May 2013 President and Executive Director

Mr. H. S. Gujral wef 31st May 2013 Executive Director

C. Relatives of key managerial personnel

Mrs. Khem Kaur Relative of key managerial personnel

Mrs. Sonia Jauhar Relative of key managerial personnel

Mrs. Kiran Chadha Relative of key managerial personnel

III. Enterprises controlled, owned or significantly infuenced by individuals having significant infuence over the Company or their relatives Jamna Agro Implements Private Limited S.W. Farms Private Limited Randeep Investment Map Auto Limited

Winthrop Marketing up to 30th May 2013 B S Jauhar (HUF)

4 Segment Information

(a) Business segment

The Company is engaged in the business of manufacturing and selling of parabolic and tapered leaf springs. The entire operations are governed by the same set of risk and returns and, hence, the same has been considered as representing a single primary segment.

Since the Company''s business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 ''Segment Reporting'' other than those already provided in the Financial Statements.

(b) Geographical segment

The manufacturing facilities are common to both the segments and it is not possible to segregate expenses, assets (except for Sundry Debtors balances) and liabilities between the two segments on any reasonable basis.

5 Share based compensation

(A) The Company has issued stock options to its employees in accordance with the Company''s Employee Stock Option Scheme 2006 and 2008. Both the Schemes are administered by the Compensation Committee constituted pursuant to SEBI (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. All the permanent employees of the company and the subsidiaries, including Directors but excluding promoters of the Company are eligible to participate in the Schemes. The Committee grants stock options to the employees at its discretion depending upon criteria such as role/ designation of the employee, length of service with the company, past performance record, future potential of the employee and/or such other criteria that may be determined by the Committee.

The stock option shall vest proportionately over the period of 5 years from the date of grant in the ratio of 15% for the frst year, 20% for second to fourth year and 25% for the ffth year. The options would be granted at the exercise price that is equivalent to the prevailing market price at the time of grant. The exercise price, in cash, is paid by the employee at the time of exercise of the stock option. The option lapses if not exercised within a period of 3 years from the date of vesting of option. The lapsed option is available for being re-granted/ re-issue at a future date. The maximum number of options that may be granted to any Specific employee is upto 0.5 % of the issued capital of the company.

(F) The Company had been using intrinsic value method of accounting ESOP expenses as prescribed by SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guide Lines 1999, to account for stock options issued under the Company''s stock option schemes. Under this method, compensation expenses are recorded on the basis of excess of the market price of share at the date of grant of option over exercise price of the option.

There would be no impact on the Profit or earnings per share had the company used the fair value of the options as the method of accounting instead of intrinsic value as the fair value is less than the intrinsic value of the option.

6 Employee benefits

The Group has a Defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months. The benefit vests on the employees after completion of 5 years of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of Profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

7 The Company, during the year, has carried a detailed exercise to identify stocks that are no longer required for various reasons and has accordingly disposed off such stocks. The loss, which is estimated around Rs. 618 has been included in the consumption of raw materials (Rs. 225), consumption of components, stores and spares (Rs. 321) and change in inventories of FG and WIP (Rs. 347) less scrap sale of Rs. 275 which is included in other operating income.

8 Employee benefit expenses under note 23 include Rs. 191.33 towards director''s remuneration. This amount is in excess of permissible remuneration determined under the Companies Act, 1956. Management is in process of filling an application with the central government for approval of payment of salary to the directors in excess of permissible limits. Pending such approval from the government, management has taken a confirmation from the director that they shall refund the amounts in the event of such approvals being refused.

9 The Company has been allotted land at Chennai by SIPCOT. While the final relief date for the commercial production is in July 2014, the management on the basis of discussions, is confdent that it shall be able to resolve the issue amicably with the State Government and no provision is required in this regard.

10 Previous year financial statements have been audited by another auditor.

11 Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification


Mar 31, 2013

NOTE NO. 1 CORPORATE INFORMATION

Jamna Auto Industries Limited (hereinafter referred to as ''the Company'' or ''JAI'') is a manufacturer of Tapered Leaf, Parabolic springs and Lift Axle. The Company''s manufacturing facilities are located at Malanpur, Chennai, Yamuna Nagar, Jamshedpur, Lucknow and Hosur.

NOTE NO: 2 RELATED PARTY DISCLOSURES

List of related parties

Enterprise in which the Company holds controlling interest

Jai Suspension Systems LLP

Key managerial personnel and their relatives

Mr. B. S. Jauhar Chairman

Mr. R. S. Jauhar CEO and Executive Director

Mr. P. S. Jauhar COO and Executive Director

Mr. S. P. S. Kohli President and Executive Director

Mrs. Khem Kaur Relative of key managerial personnel

Mrs. Sonia Jauhar Relative of key managerial personnel

Mrs. Kiran Chadha Relative of key managerial personnel

Entities over which key managerial personnel/ their relatives are able to exercise signifcant infuence

Jamna Agro Implements Private Limited Mrs. Khem Kaur

S.W. Farms Private Limited Mr. R. S. Jauhar

Map Auto Limited Mr. B. S. Jauhar

Winthrop Marketing Mr. S. P. S. Kohli

NOTE NO: 3 OBLIGATION ON LONG TERM NON-CANCELLABLE OPERATING LEASE

The Company has taken Lucknow plant space on operating lease. The lease rentals charged during the year in respect of cancellable and non cancellable operating leases and maximum obligations on long term non-cancellable operating lease payable as per the rentals stated in the agreement are as follows:

NOTE NO: 4 SEGMENT INFORMATION

(a) Information about primary business segment

The Company recognises ''Parabolic/ Tapered Leaf Spring/Lift axle'' as its only primary segment since its operations consist of manufacturing of these products and related activities. Accordingly, ''Parabolic/ Tapered Leaf Spring'' segment is the only segment comprising the primary basis of segmental information set out in these fnancial statements.

(b) Information on secondary/ geographical segment

The Company sells its products to various manufacturers within the country and also exports to other companies. Considering the size and proportion of exports to local sales, the Company considers sales made within the country and exports as two geographical segments. Information of geographical segment is based on the geographical location of the customers.

NOTE NO: 5 SHARE BASED COMPENSATION

A The Company has issued stock options to its employees in accordance with the Company''s Employee Stock Option Scheme 2006 and 2008. Both the Schemes are administered by the Compensation Committee constituted pursuant to SEBI (Employee Stock Options Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. All the permanent employees of the Company and the subsidiaries, including Directors but excluding promoters of the Company are eligible to participate in the Schemes. The Committee grants stock options to the employees at its discretion depending upon criteria such as role/designation of the employee, length of service with the Company, past performance record, future potential of the employee and/or such other criteria that may be determined by the Committee.

The stock option shall vest proportionately over the period of 5 years from the date of grant in the ratio of 15% for the frst year, 20% for second to forth year and 25% for the ffth year. The options would be granted at the exercise price that is equivalent to the prevailing market price at the time of grant. The exercise price, in cash, is paid by the employee at the time of exercise of the stock option. The option lapses if not exercised within a period of 3 years from the date of vesting of option. The lapsed option is available for being re-granted/ re-issue at a future date. The maximum number of options that may be granted to any specifc employee is upto 0.5 % of the issued capital of the Company.

NOTE NO: 6

Until 31 March 2011, Company was recognising revenue on dispatch of material to customers from factory gate. The Company had refned its revenue recognition policy in the year ended 31 March 2012 to recognise revenue on transfer of signifcant risk and rewards to customers coinciding with the time of delivery. The impact of correction on previous year ended 31 March 2012 is as given below and formed part of the adjustments related to prior period expenditure in the previous year:

NOTE NO: 7

The Company is in the process of establishing a comprehensive system of maintenance of information and documents of specifed domestic transactions as required by the transfer pricing legislation under Section 92-92F of the Income Tax Act, 1961, The Company expects such records to be in existence latest by 30 November 2013. The management is of the opinion that its domestic transactions are at arm''s length so that the aforesaid legislation will not have any impact on the fnancial statements, particularly on the amount of tax expense and that of provision for taxation.


Mar 31, 2012

NOTE NO. 1 CORPORATE INFORMATION

Jamna Auto Industries Limited (hereinafter referred to as 'the Company' or 'JAI') is a manufacturer of Tapered Leaf and Parabolic springs. The Company's manufacturing facilities are located at Malanpur, Chennai, Yamuna Nagar, Jamshedpur and Lucknow.

a. Term and rights attached to Equity shares

The Company has only one type of equity shares having par value of Rs10 each. All shares rank pari passu with respect to dividend, voting rights and other terms. Each shareholder is entitled to one vote per share except, in respect of any shares on which any calls or other sums payable have not been paid. The Company pays and declares dividends in Indian '. The dividend proposed, if any, by the Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. During the year, the Company has declared two interim dividends of Rs1 per share each (Previous year one interim and final dividend of Rs1 each). The repayment of equity share capital in the event of liquidation and buy back of shares are possible subject to prevalent regulations. In the event of liquidation, normally the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b. Terms and rights of preference shares including the terms of conversion/redemption

The preference shares were issued to IFCI Limited pursuant to the debt restructuring scheme entered between erstwhile Jai Parabolic Springs Limited and IFCI Limited in the year ended 31 March 2003. The redemption of preference share capital will be made in two equal instalments of Rs175 each on 1 October 2013 and 1 October 2014. The preference shareholders are not entitled to any voting rights. The preference shares are entitled to dividend as follows-

The Boards of Directors have recommended a cumulative preference dividend amounting to Rs432 lakhs relating to the period December 2002 to 31 March 2012 in the board meeting held on 7 June 2012. The preference dividend for the year ended 31 March 2012 amounts to Rs43.75 (previous year Rs43.75). The same is subject to the approval of shareholders.

c. S8ares reserved for issue under Options and contracts/commitments for t8e sale of s8ares/ disinvestment, including t8e terms and amounts

The Company provides shares based payment schemes to its employees. During the year ended 31 March 2012, employee stock option schemes were in existence and 853,775 stock options (Previous year: 1,202,857) is eligible to be exercised by the employees as per their vesting and in accordance with the terms of issue of stock option. Refer note 38 on employee stock option plan.

During the year ended 31 March 2008 pursuant to the scheme of amalgamation, erstwhile Jai Parabolic Springs Limited and MAP Springs Limited amalgamated with the Company with effect from 1 July 2007. In accordance with the scheme, the Company had issued and alloted:

(A) 12,395,821 equity shares of face value of Rs10 each fully paid up to the shareholders of esrtwhile Jai Parabolic Springs Limited and MAP Springs Limited;

(B) 1,795,227 equity shares of face value of Rs10 each fully paid up were issued to Clearwater Capital Parnters (Cyprus) Limited in lieu of 3,590,455 optionally convertible debentures of Rs72 each held in Jai Parabolic Springs Limited.

(C) 350,000 Preference shares of Rs100 each fully paid up were issued to IFCI Limited held in erstwhile Jai Parabolic Springs Limited. Also, refer note 3(c).

b. During the previous year, in the Annual General Meeting held on 7 August 2010, the Company had made preferential allotment of 15,78,947 equity shares of Rs10 each to Clearwaters Capital Partners Singapore Fund III Private Limited and 10,52,631 equity shares of Rs10 each to MAP Auto Limited at a premium of Rs85 per equity share aggregating to equity share capital amounting to Rs263.16 lakhs and share premium amounting to Rs2,236.84 lakhs.

The share application money includes amount received from employees against the employee stock option plan. The Company has sufficient authorised share capital to cover the share capital amount on allotment of shares out of share application money. The share application money pending allotment was received between 23 February 2011 to 14 March 2012 and the corresponding shares have been allotted in the compensation committee meeting held on 30 May 2012.

(a) Includes Rs150 lakhs representing 10% of the issued price of 2,083,333 convertible warrants as application money received towards the subscription of such warrants by the promoters in erstwhile Jai Parabolic Springs Limited. Such application money was forfeited in accordance with SEBI guidelines on the expiry of 18 months from the date of issue. It includes Rs97 lakhs representing application money received towards the subscription of 1,343,210 convertible warrants alloted to MAP Auto Limited. Such application money was forfeited on 27 June 2007.

(b) Total interim dividend of Rs2 (previous year Rs1) per equity share was declared in the current year ended 31 March 2012.

(A) Working capital term loan (Rs1,217.43 (Previous year : Nil))

The working capital term loan from Kotak Mahindra Bank is an unsecured facility and shall be repaid in 24 equal instalments of Rs70.96 and 25th instalment of Rs71.05. The instalment is inclusive of interest @ 12.5% per annum.

(B) Deferred sales tax loan (Rs1,614.91 (previous year Rs1,859.71))

As per the eligibility certificate issued, the Company is eligible for waiver of deferred sales tax repayable over the period from 1 March 2010 to 28 February 2019 and is unsecured and interest free.

(C) Ve8icle loans (Rs34.98 (previous year Rs53.91))

Vehicle loans are secured by the hypothecation of specific vehicles. The loans are repayable in equated monthly instalments in accordance with terms and conditions of bank. The period of loan ranges from 3 to 5 years.

# Buyer's credit is a part of term loan facility from ICICI Bank Limited. For details of security, refer note 5(B) on security related to term loans from banks

The Company has not availed any fund based working capital facility from the consortium limits. The details of security are as follows-

working capital

(a) First pari passu charge by way of hypothecation on the current assets (inventory, spares (not relating to plant and machinery), bills receivable and book debts) of the Company.

(b) Second pari passu charge on the immovable fixed assets of the Company and other movable fixed assets of the borrower.

(c) Personal guarantees of Mr. R. S. Jauhar, CEO & Executive Director and Mr. P. S. Jauhar, COO & Executive Director. (Refer Note 34 on related party)

(d) First pari passu charge on 15 lakhs shares of the Company held by Promoters/Promoters group given as collateral securities for working capital. (Refer Note 34 on related party)

Note (a) : Details of dues to micro and small enterprises defined under the MSMED Act, 2006

Based on the information presently available with the Company, there are no dues outstanding to micro and small enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006.

(i) During the year ended 31 March 2012, the management had re-assessed the classification of expenditure incurred in earlier years on development of design and prototypes for which the Company has obtained copyrights amounting to Rs3,497.58 (previous year: 3,497.58) (net of accumulated depreciation as at 31 March 2011: Rs1,921.34 (previous year Rs971.05)) and has correctly reclassified the same as part of Intangible Assets. Consequently, the amortisation charge of Rs755.19 (previous year Rs950.29) for the year ended 31 March 2012 has been included in depreciation. Such expenses were previously classified under deferred revenue expenditure.

(ii) Additions include directly attributable borrowing cost capitalised amounting to Rs62.05 for factory building (Previous year nil) and Rs288.94 for plant and machinery (previous year Rs454.10).

NOTE NO: 2 CONTINGENT LIABILITY As at As at 31 March 2012 31 March 2011 Claims against Company not acknowledged as debts 872.32 152.05

Guarantee given by Company 7.89 6.50

Import of machinery under Export Promotion of Capital Goods scheme 335.48 288.32

Income tax and other demands 20.63 20.63

1,236.32 467.50

NOTE NO: 3 SEGMENT INFORMATION

(a) Information about primary business segment

The Company recognises 'Parabolic/ Tapered Leaf Spring' as its only primary segment since its operations consist of manufacturing of these products and related activities. Accordingly, 'Parabolic/ Tapered Leaf Spring' segment is the only segment comprising the primary basis of segmental information set out in these financial statements.

(b) Information on secondary/ geograp8ical segment

The Company sells its products to various manufacturers within the country and also exports to other companies. Considering the size and proportion of exports to local sales, the Company considers sales made within the country and exports as two geographical segments. Information of geographical segment is based on the geographical location of the customers.

# The Company has common assets for producing goods for domestic market and overseas markets. Hence, separate figures for other assets/ additions to other assets cannot be furnished.

NOTE NO: 4 SHARE BASED COMPENSATION

(A) The Company has issued stock options to its employees in accordance with the Company's Employee Stock Option Scheme 2006 and 2008. Both the Schemes are administered by the Compensation Committee constituted pursuant to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. All the permanent employees of the Company and the subsidiaries, including Directors but excluding promoters of the Company are eligible to participate in the schemes. The Committee grants stock options to the employees at its discretion depending upon criteria such as role/ designation of the employee, length of service with the Company, past performance record, future potential of the employee and/or such other criteria that may be determined by the Committee.

The stock option shall vest proportionately over the period of five years from the date of grant in the ratio of 15% for the first year, 20% for second to fourth year and 25% for the fifth year. The options would be granted at the excercise price that is equivalent to the prevailing market price at the time of grant. The exercise price, in cash, is paid by the employee at the time of exercise of the stock option. The option lapses if not exercised within a period of 3 years from the date of vesting of option. The lapsed option is available for being re-granted/ re-issue at a future date. The maximum number of options that may be granted to any specific employee is upto 0.5 % of the issued capital of the Company.

*Not applicable since the Company has not granted stock options during the year

(F) The Company had been using intrinsic value method of accounting ESOP expenses as prescribed by SEBI (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999, to account for stock options issued under the Company's stock option schemes. Under this method, compensation expenses are recorded on the basis of excess of the market price of share at the date of grant of option over exercise price of the option.

There would be no impact on the profit or earnings per share had the Company used the fair value of the options as the method of accounting instead of intrinsic value as the fair value is less than the instrinsic value of the option.

ii) The guidance on implementing AS-15 issued by Accounting Standards Board of the Institute of Chartered Accountants of India states that benefit involving employer established provided funds, which requires interest shortfall to be re-compensated, are to be considered as defined benefit plans. Considering a confirmation by the actuary that there is no formal guidance available from Actuarial Society of India in this regard, the Company believes that actuarial valuation at present is not necessary. Amount charged to the Profit and Loss Account in this regard is Rs161.31 lakhs (Previous year Rs135.98 lakhs).

Experience adjustments

The disclosure relating to experience adjustments have not been given in the financial statements, the management is of the view that the same will not be material to the overall financial statement disclosure and presentation.

NOTE NO: 5

Until 31 March 2011, Company had recognised revenue on dispatch of material to customers from factory gate. The Company has refined its revenue recognition policy during the year to recognise revenue on transfer of significant risk and rewards to customers that coincides at the time of delivery. The impact of correction on the year ended 31 March 2012 is as given below and forms part of the adjustments related to prior period expenditure:

* In the year ended 31 March 2012, revenue amounting to Rs1905 lakhs had been recognised on the basis of dispatch of goods to its customers, however the goods were actually delivered in the year ended 31 March 2012. As a consequence, revenue relating to previous year has been adjusted in the current year financial statements.

# As explained above, the consequential impact of finished goods in transit amounting to Rs1,767 lakhs relating to those goods that had not been delivered as on 31 March 2011 has been adjusted to the Changes in inventory of finished goods in the current year financial statements.

## The cumulative effect of the above on the profit after tax amounting to Rs138 lakhs has been disclosed as a prior year expenditure.

NOTE NO: 6

In the previous year ended 31 March 2011, erstwhile Jai Suspension Systems Limited (JAI), a wholly owned subsidiary of the Company, converted into a Limited Liability Partnership Firm in accordance with the Limited Liability Partnership Act, 2008 w.e.f. 21 October 2010 and was named Jai Suspension Systems LLP (LLP). The shareholders that existed as on the date of conversion became the partners of the LLP with their profit sharing ratios determined on the basis of the shareholding in JAI as on the date of conversion.

As a consequence, the profit of JAI upto 20 October 2010 aggregating to Rs718.59 lakhs was recognized as an income and was disclosed as an exceptional item in the Statement of Profit and Loss.


Mar 31, 2011

I. Contingent Liabilities not provided for in respect of

Rs. in Lacs

As at 31 As at 31 March 2011 March 2010

a. Demands against the 49.42 92.56 company not acknowledged as debts.

b. Claim pending against the 116.45 55.19 company not acknowledged as debts.

c. Import machinery under 288.32 280.58 EPCG Scheme

d. Bank Guarantees 6.50 6.50

ii. Capital commitments outstanding (net of advances) and not provided for Rs.1617.01 lacs (previous year Rs.299.38 lacs).

iii. Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development Act, 2006 which came into force with effect from 02 October 2006. As per the Act, the company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The information related to their dues / overdue has been furnished by the company for those parties from whom the data is received towards the same.

iv. Fixed Deposits with Banks are pledged against Letter of Credit and Guarantees by the company.

v. In the opinion of the Management, Current Assets, Loans & Advances are approximately of the value stated, if realized in the ordinary course of business.

vi. The company has changed the method of valuation of Inventories as compared to the method as adopted erstwhile by the company. The company has valued the stock by considering weighted average purchase price on the basis of rolling average due to wide fluctuation in purchase price, whereas, earlier Inventory had been valued by considering the weighted average price of goods for the entire period of relevant financial year. As a result of such change, value of inventory has increased by Rs.353.76 lacs and accordingly the profit for the period is higher with the similar amount

vii. Deferred Revenue Expenditure has been amortised over a period of five years. A sum of Rs.971.71 lacs has been amortised for the current year. However, from the current financial year, the company has not allocated any sum toward Deferred Revenue Expenditure on account of sample development expenses (previous year Rs.1425.40 lacs including depreciation of Rs.255.40 lacs). If the company had continued the same practice, profit for the year would have been higher by Rs.1158.40 lacs and the Deferred Revenue Expenditure in the Balance Sheet would have been higher by the same amount.

viii. Balances of some parties are subject to confirmation/ reconciliations

ix. The company operates in a single business segment i.e. manufacturing of Parabolic/Tapered leaf Spring and has its production facilities and all other assets in India. During the year Domestic Segment Revenue is Rs.89541.32 lacs (previous year Rs.60064.45 lacs) and International Segment Revenue is Rs.964.85 lacs (previous year Rs.538.05 lacs).

x. Jai Suspension Systems Ltd. was converted into Jai Suspension Systems LLP w.e.f. 21 October 2010. Consequently the profit of Jai Suspension Systems Ltd. upto 20 October 2010 agreegating to Rs.718.59 lacs has been shown as Exceptional Items in the Profit & Loss Accounts.

Actuarial Assumptions

a) Economic Assumptions

The principal assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yields available on Government Bonds at the accounting date with a term that matches that of the liabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevant factors on long term basis. Valuation assumptions are as follows which have been agreed by the company

Actuarial Method

a) Actuary has used the projected unit credit (PUC) actuarial method to assess the plan's liabilities of exit employees for retirement, death-in-service and withdrawals (Resignations / Terminations).

b) Under the PUC method a projected accrued benefit is calculated at the beginning of the period and again at the end of the period for each benefit that will accrue for all active member of the plan. The projected accrued benefit is based on the plan accrual formula and upon service as of the beginning or end of period, but using member's final compensation, projected to the age at which the employee is assumed to leave active service. The plan liability is the actuarial present value of the projected accrued benefits as on the date of valuation.

Actuarial Value

Leave encashment is accounted on the basis of actual leaves outstanding to the credit of respective employees at the end of the financial year as per the company's policy.

Note:

In Malanpur unit fund value as per the records of LIC is Rs.150.28 lacs. Since as per actuarial valuation total obligation of Rs.142.92 lacs is less than fund value with LIC, no provision for gratuity has been made during the year in Malanpur unit.

xiv. Debtors includes debts of Jai Suspension Systems LLP to the extent of Rs.1393.25 lacs.

xi. As required by Accounting Standard 28 on Impairment of Assets, the company has reviewed potential generation of economic benefits from fixed assets. Accordingly, the provision for impairment loss amounting to Rs. Nil (previous year Rs.17.01 lacs) has been made during the year.

xii. Related party disclosures

Names of related parties and nature of related party relationships are as under: Companies/entities in which the company has substantial *Jai Suspension Systems Limited interest (i.e. more than 20% in voting power) *Jai Suspension Systems LLP

Key Management Personnel and their relatives

1. Mr. B. S. Jauhar (Chairman)

2. Mr. R. S. Jauhar (CEO & Executive Director)

3. Mr. P. S. Jauhar (COO & Executive Director)

4. Mr. S. P. S. Kohli (President & Executive Director)

5. Mrs. Khem Kaur (W/o Mr. B. S. Jauhar)

6. Mrs. Sonia Jauhar (W/o Mr. R. S. Jauhar)

7. Mrs. Kiran Chadha (Relative of Mr. B. S. Jauhar, Mr. R. S. Jauhar and Mr. P. S. Jauhar)

Entities over which key management personnel/their relatives are able to exercise significant influence

1. Jamna Agro Implements Pvt. Ltd. (Mrs. Khem Kaur/ Mrs. Kiran Chadha)

2. S.W. Farms Pvt. Ltd. (Mrs. Sonia Jauhar/Mr. R. S. Jauhar)

3. MAP Auto Ltd. (Mr. B. S. Jauhar/ Mr. R. S. Jauhar/Mr. P. S. Jauhar)

4. Jai Suspension Systems Ltd Wholly owned subsidiary company

5. Jai Suspension Systems LLP Majority partner in LLP

6. Winthrop Marketing (Relative of Mr. S. P. S. Kohli)

* (Jai Suspension Systems Ltd was converted into Jai Suspension System LLP w.e.f. 21 October 2010)

xiii. Previous year figures have been regrouped / rearranged wherever necessary to make them comparable with those of current year.


Mar 31, 2010

I. Contingent Liabilities not provided for in respect of:

(Rs in lacs) For the year ended on

31.03.2010 31.03.2009

(i) Remuneration 168.35 172.42

(ii) Provident Fund 13.05 12.47

(iii) Perquisites 4.21 0.48

ii. Capital commitments outstanding (net of advances) and not provided for Rs 299.38 lacs (previous year Rs 1682.31 lacs).

iii. Managerial Remuneration

iv. Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development Act, 2006 which came into force with effect from October 2, 2006. As per the Act, the company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. The information related to their dues / overdue has been furnished by the company for those parties from whom the data is received towards the same. The total liability of interest is Rs 0.16 lacs on a liability of Rs 21.82 lacs.

v. Fixed Deposit Receipts with Banks are pledged against guarantees and other facilities availed of by the company.

vi. In the opinion of the Management, Current Assets, Loans & Advances are approximately of the value stated, if realized in the ordinary course of business.

vii. The company has charged depreciation on Plant and Machinery on Double Shift basis for the period 01.04.2009 to 30.09.2009 and on Triple Shift basis for the period 01.10.2009 to 31.03.2010. Depreciation on other fixed assets is provided at the rate provided by Schedule XIV to the Companies Act, 1956 under the straight line method.

viii. Balances in debtors are subject to confirmation.

ix. Deferred revenue expenditure has been amortised over a period of five years. A sum of Rs 1053.35 lacs has been amortised for the current year.

x. The company operates in a single business segment i.e. manufacturing of Parabolic/Tapered leaf Spring and has its production facilities and all other assets in India. During the year Domestic Segment revenue is Rs 60064.45 lacs (previous year Rs 51067.21 lacs) and International Segment Revenue is Rs 538.05 lacs (previous year Rs 310.96 lacs).

xi. Gratuity liability is provided on the basis of actuarial valuation.

xii. The company has allocated and apportioned during the year a sum of Rs 1425.40 lacs including depreciation of Rs 255.40 lacs (previous year Rs 1203.89 lacs including depreciation of Rs 116.29 lacs) being expenditure incurred towards Sample Development, based on the technical and costing estimates/ reports. The Management is of the view that the company shall be deriving future benefits on this account and hence such expenditure has been considered as Deferred Revenue Expenditure.

xiii. In compliance to accounting of various exchange contracts under Accounting Standards-30 and clarification issued by the Institute of Chartered Accountants of India from time to time the Mark to Market loss of Rs 199.74 lacs against forward contracts taken by the company has been provided as foreign exchange loss in the Profit & Loss Account.

xiv. Debtors includes debts of wholly owned subsidiary Jai Suspension Systems Limited to the extent of Rs 1122.76 lacs.

xv. The company has changed method of charging depreciation on Fixed Assets other than Building and Plant & machinery installed at its Chennai plant with effect from 1st April 2009. An amount of Rs. 58.89 lacs has arisen as surplus on account of retrospective computation of depreciation in Straight Line Method. This surplus is accounted and disclosed under exceptional item in the Profit & Loss account.

xvi. As required by Accounting Standard - 28 on Impairment of Assets, the company has reviewed potential generation of economic benefits from fixed assets. Accordingly, the provision for impairment loss amounting to Rs.17.01 lacs (Previous year 8.06 lacs) has been made during the year.

xvii. a) Transaction with the wholly owned subsidiary company Rs 7065.00 lacs. Amount receivable Rs 1122.76 lacs.

b) Related party disclosures:

Names of related parties and nature of related party relationships are as under:

Companies in which the company has substantial interest (i.e. more than 20% in voting power)

Jai Suspension Systems Limited

Key Management Personnel and their relatives:

(1) Mr. B. S. Jauhar (Chairman)

(2) Mr. R. S. Jauhar (CEO & Executive Director)

(3) Mr. P. S. Jauhar (COO & Executive Director)

(4) Mr. S. P. S. Kohli (President & Executive Director)

(5) Mrs. Khem Kaur (W/o Mr. B. S. Jauhar)

(6) Mrs. Sonia Jauhar (W/o Mr. R. S. Jauhar)

(7) Mrs. Kiran Chadha (Relative of Mr. B. S. Jauhar,

Mr. R. S. Jauhar and Mr. P. S. Jauhar)

(8) Mrs. Inder Beer Kaur (W/o Mr. S. P. S. Kohli)

Entities over which key management personnel/their relatives are able to exercise significant influence

(1) Jamna Agro Implements Pvt. Ltd. (Mrs. Khem Kaur/ Mr. R. S, Jauhar/ Mr. P.S. Jauhar/Mr. B. S. Jauhar)

(2) S.W. Farms Pvt. Ltd. (Mrs. Sonia Jauhar/R.S.Jauhar)

(3) MAP Auto Ltd. (Mr.B.S.Jauhar/ Mr.R.S.Jauhar/ Mr.P.S.Jauhar)

(4) Mrs. Inder Beer Kaur (Mr.S.P.S.Kohli)

xx. Previous year figures have been regrouped / rearranged wherever necessary to make them comparable with those of current year.

 
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