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Union Budget 2017-18
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Notes to Accounts of JK Tyre & Industries Ltd.

Mar 31, 2016

NOTE - 1

Estimated amount of contracts remaining to be executed on capital account Rs.179.37 crores (Previous year: Rs.470.44 crores).

NOTE - 2

Contingent liabilities in respect of claims not accepted and not provided for Rs.50.34 crores (Previous year: Rs.40.84 crores) pertain to Excise & Customs duty matters in appeal Rs.8.41 crores, Service tax matters Rs.0.31 crore, Sales Tax matters in appeal Rs.2.19 crores, Income tax matters in appeal Rs.2.83 crores & other matters Rs.36.60 crores (Previous year: Rs.8.41 crores, Rs.0.04 crore, Rs.2.14 crores, Rs.2.97 crores & Rs.27.28 crores respectively).

NOTE - 3

Bills discounted with Banks outstanding Nil (Previous year: Rs.8.06 crores).

NOTE - 4

Capital work in progress includes Machinery in stock / transit, construction / erection materials, cost paid for land and the following pre-operative expenses pending allocation:

NOTE - 5

Debts over six months / Advances include Rs.3.62 crores (Previous year: Rs.3.92 crores) for which legal and other necessary action has been taken. In the opinion of the Management, these debts are recoverable and the same have been classified as good.

NOTE - 6

In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

NOTE - 7

The Company has taken certain specified Plant & Machinery on operating lease basis, which is cancellable at the option of lessee.

NOTE - 8

The Company has worked out reversal of Modvat Credit availed on exports under Value Based Advance Licence in earlier years and reversed the same in accounts. Pursuant to special scheme announced by the Government, the Company has also paid interest on such reversals. Further, the Excise department has issued certain basis for reversal of Modvat, which is disputed and has been contested by the Company in a Writ Petition before the Hon''ble Delhi High Court and directions have been issued to treat the reversal already made by the Company as provisional.

NOTE - 9

a. Forward Contracts for hedging Receivables - US $ 47 Million (Previous year: US $ 24 Million) and for hedging Payables - US $ 38.50 Million (Previous year: Nil) are outstanding as at 31.03.2016.

b. Foreign currency exposure unhedged net payable is Rs.1054.83 crores - US $ 159.02 Million (Previous year: Rs.997.28 crores - US $ 159.34 Million) as at 31.03.2016.

NOTE - 10

The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of information available with the Company are as under:

(i) Principal & Interest amount due and remaining unpaid as at 31.03.2016: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) Interest Accrued and unpaid as at 31.03.2016: Nil (Previous year: Nil).

NOTE-11

The Company has not provided diminution in the value of certain long term strategic investments, since in the opinion of the Board, such diminution in their value is temporary in nature, considering the inherent value, nature of investments, the investees'' assets and expected future cash flow from such investments.

NOTE - 12

The Company has, pursuant to the approval granted by its Board of Directors in their meeting held on September 12, 2015, completed the acquisition of 64% shareholding in Cavendish Industries Limited (CIL) on April 13, 2016 for an amount of Rs.448.05 crores. CIL has a tyre manufacturing plant at Laksar, Uttarakhand, where it manufactures a range of tyres, tubes and flaps. The remaining 36% shareholding in CIL has been acquired by Associates / Group Companies on the same date.

This strategic acquisition further strengthens JK Tyre''s leadership position in Truck / Bus Radial segment. Furthermore, JK Tyre gets entry into the fast growing 2/3 wheeler segment.

NOTE - 13

Miscellaneous expenses include Nil (Previous year: Rs.0.75 crore) for political purpose.

NOTE - 14

Exceptional items include net impact of unfavourable Foreign Exchange Rate fluctuation Rs.1.41 crores (Previous Year: Rs.7.24 crores), net gain on sale of certain assets Rs.0.08 crore (Previous Year: Rs.0.36 crore), and expenditure on VRS for the employees Rs.12.86 crores (Previous Year: Rs.2.55 crores).

NOTE - 15 Related Parties

a) Subsidiaries:

J. K. International Ltd.

J. K. Asia Pacific Ltd.

J. K. Asia Pacific (S) Pte. Ltd. (JKAPPL - Subs. of J. K. Asia Pacific Ltd.) Natext Biosciences Pvt. Ltd. (NBPL) (related w.e.f. 30th Jun, 2015) Lankros Holdings Ltd. (LANKROS)

Sarvi Holdings Switzerland AG. (SARVI - Subs. of Lankros Holdings Ltd.) JK Tornel S.A. de C.V. (JKTSA - Subs. of Sarvi Holdings Switzerland AG.) Comercializadora America Universal, S.A. de C.V*

Compania Hulera Tacuba, S.A. de C.V*

Compania Hulera Tornel, S.A. de C.V (CHT)*

Compania Inmobiliaria Norida, S.A. de C.V*

General de Inmuebles Industriales, S.A. de C.V*

Gintor Administracion, S.A. de C.V*

Hules y Procesos Tornel, S.A. de C.V*

* Subsidiary of JKTSA

b) Associates:

Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) Valiant Pacific LLC. (VPL)

Florence Investech Ltd. (FINVL)

Dwarkesh Energy Ltd. (DEL)

c) Key Management Personnel (KMP):

(i) Dr. Raghupati Singhania Chairman & Managing Director

(ii) Shri Bharat Hari Singhania Managing Director

(iii) Shri Vikrampati Singhania (ceased to be a director w.e.f. 21st Jan, 2016) Dy. Managing Director

(iv) Shri Anshuman Singhania (director w.e.f. 16th Mar, 2016) Whole Time Director

(v) Shri Swaroop Chand Sethi (ceased to be a director w.e.f. 15th May, 2015) Whole Time Director

(vi) Shri Arun Kumar Bajoria Director & President - International Operations

(vii) Shri Ashok Kumar Kinra Chief Financial Officer

(viii) Shri Pawan Kumar Rustagi Vice President (Legal) & Co. Secretary

d) Enterprise overwhich KMP is able to exercise Significant Influence:

JK Lakshmi Cement Ltd. (JKLC)

J.K. Fenner (India) Ltd. (JKFIL) (ceased to be related w.e.f. 21st Jan, 2016)

Nav Bharat Vanijya Ltd. (NBVL)

e) Other Related Parties with which Company has transactions:

Bengal & Assam Company Ltd. (BACL) - Public company in which Directors of the Company are directors and hold more than two percent of its paid-up share capital

Pushpawati Singhania Research Institute for Liver, Renal & Digestive Diseases (PSRI) - Private company in which Directors are Directors & members

Niyojit Properties Pvt. Ltd. (NPPL) - Private company in which a Director is member (ceased on 30th Mar, 2015 and subsequently became related w.e.f. 16th Mar, 2016)

O.P Khaitan & Co. (OPKC) - Firm in which Director was a partner (since deceased on 06th Dec, 2015)

Shardul Amarchand Mangaldas & Co. (SAMC) - Firm in which Director is a partner (related w.e.f. 10th May, 2015)

NOTE - 16

Figures less than Rs.50000 have been shown at actual in bracket.

NOTE - 17

Previous year figures have been reclassified / regrouped / recast, wherever necessary.


Mar 31, 2015

NOTE - 1

Estimated amount of contracts remaining to be executed on capital account Rs.470.44 crores (Previous year: Rs.603.54 crores).

NOTE - 2

Contingent liabilities in respect of claims not accepted and not provided for Rs.40.84 crores (Previous year: Rs.41.89 crores) pertain to Excise & Customs duty matters in appeal Rs.8.41 crores, Service tax matters Rs.0.04 crore, Sales Tax matters in appeal Rs.2.14 crores, Income tax matters in appeal Rs.2.97 crores & other matters Rs.27.28 crores (Previous year: Rs.8.60 crores, Rs.0.04 crore, Rs.3.40 crores, Rs.2.97 crores &Rs.26.88 crores respectively).

NOTE - 3

Bills discounted with Banks outstanding Rs.8.06 crores (Previous year: Rs.14.09 crores).

NOTE - 4

Excise Duty liability on account of valuation of Finished Goods is disputed and is yet to be determined. Without prejudice to the Company''s stand in this behalf, as per Government''s desire an adhoc amount of Rs.5.45 crores was paid under protest in earlier years and debited to ''Advances Recoverable'' and an equivalent amount was provided in Profit and Loss Statement. On Writ Petition filed by the Company in the Hon''ble Delhi High Court, the said Court directed the Excise Authorities to determine the valuation of finished goods in accordance with law and observations made in the order.

NOTE - 5

Debts over six months / Advances include Rs.3.92 crores (Previous year: Rs.3.28 crores) for which legal and other necessary action has been taken. In the opinion of the Management, these debts are recoverable and the same have been classified as good.

NOTE - 6

In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

NOTE - 7

The Company has taken certain specified Plant & Machinery on operating lease basis, which is cancellable at the option of lessee.

NOTE - 8

The Company has worked out reversal of Modvat Credit availed on exports under Value Based Advance Licence in earlier years and reversed the same in accounts. Pursuant to special scheme announced by the Government, the Company has also paid interest on such reversals. Further, the Excise department has issued certain basis for reversal of Modvat, which is disputed and has been contested by the Company in a Writ Petition before the Hon''ble Delhi High Court and directions have been issued to treat the reversal already made by the Company as provisional.

NOTE - 9

a. Forward Contracts for hedging Receivables - US $ 24 Million (Previous year: Nil) and for hedging Payables - Nil (Previous year: US $ 41.60 Million and Euro 0.79 Million) are outstanding as at 31.03.2015.

b. Foreign currency exposure unhedged net payable is Rs.997.28 crores - US $ 159.34 Million (Previous year: Rs.158.18 crores - US $ 26.32 Million) as at 31.03.2015.

NOTE -10

The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of information available with the Company are as under:

(i) Principal & Interest amount due and remaining unpaid as at 31.03.2015: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) Interest Accrued and unpaid as at 31.03.2015: Nil (Previous year: Nil).

NOTE - 11

The Company has not provided diminution in the value of certain long term strategic investments, since in the opinion of the Board, such diminution in their value is temporary in nature, considering the inherent value, nature of investments, the investees'' assets and expected future cash flow from such investments.

NOTE - 12

Pursuant to adoption of Schedule II to the Companies Act, 2013, the depreciation charge for the year is lower by Rs.31.72 crores

NOTE - 13

Miscellaneous expenses include contribution to Satya Electoral Trust Rs.0.75 crore (Previous Year: Nil) for political purpose.

NOTE - 14

Exceptional items include net impact of unfavourable Foreign Exchange Rate fluctuation Rs.7.24 crores (Previous Year: Rs.70.94 crores), net gain on sale of certain assets Rs.0.36 crore (Previous Year: Rs.1.19 crores), and expenditure on VRS for the employees Rs.2.55 crores (Previous Year: Rs.6.08 crores).

NOTE - 15

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules, 2006 are as given below:

NOTE - 16 Related Parties

a) Subsidiaries:

J. K. International Ltd.

J. K. Asia Pacific Ltd.

J. K. Asia Pacific (S) Pte. Ltd. (Subs. of J. K. Asia Pacific Ltd.)

Lankros Holdings Ltd.

Sarvi Holdings Switzerland AG. (Subs. of Lankros Holdings Ltd.)

JK Tornel S.A. de C.V. (JKTSA- Subs. of Sarvi Holdings Switzerland AG.)

Comercializadora América Universal, S.A. de C.V*

Compañía Hulera Tacuba, S.A. de C.V*

Compañía Hulera Tornel, S.A. de C.V (CHT)*

Compañía Inmobiliaria Norida, S.A. de C.V*

General de Inmuebles Industrials, S.A. de C.V*

Gintor Administración, S.A. de C.V*

Hules y Procesos Tornel, S.A. de C.V*

* Subsidiary of JKTSA

b) Associates:

Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) Valiant Pacific LLC. (VPL) Florence Investech Ltd. (FINVL)^ Dwarkesh Energy Ltd. (DEL)^

d) Enterprise over which KMP is able to exercise Significant Influence:

JK Lakshmi Cement Ltd. (JKLC) J.K. Fenner (India) Ltd. (JKFIL) Nav Bharat Vanijya Ltd. (NBVL)^

e) Other Related Parties with which Company has transactions:

Bengal & Assam Company Ltd. (BACL)^ - Public company in which Directors of the company are directors and hold more than two percent of its paid-up share capita

Pushpawati Singhania Research Institute for Liver, Renal & Digestive Diseases (PSRI) - Private company in which Directors are Directors & members

Niyojit Properties Pvt. Ltd. (NPPL)^ - Private company in which Directors are members (ceased to be related w.e.f. 30.03.2015)

O.P. Khaitan & Co. (OPKC)^ - Firm in which Director is a partner

^ Related w.e.f. 01.04.2014 pursuant to Companies Act, 2013.

NOTE - 17

Figures less than Rs.50000 have been shown at actual in bracket.

NOTE - 18 Previous year figures have been reclassified / regrouped / recast, wherever necessary.


Mar 31, 2014

Rights and preferences attached to Equity Shares:

a. The Company has only one class of Equity Shares having face value of Rs. 10/- each and each shareholder is entitled to one vote per share.

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.

c. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

During the year, the Company allotted 43,03,350 warrants on preferential basis, pursuant to section 81 (1A) of the Companies Act, 1956 to the Promoter Group at a price determined in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. An amount of Rs. 12.37 crs. being 25% of the consideration has been received. Each warrant is convertible into one Equity Share of the Company on payment of balance 75% within a period of 18 months from the date of allotment, failing which, the amount already received shall stand forfeited.

The proceeds of the issue have been used for the purpose, for which it was raised.

Notes:

1. Term Loan of Rs. 30 crs. from a Bank, secured by a first pari passu charge created on movable and immovable assets of Company''s Plant in Madhya Pradesh, both present and future is repayable in 21 equal quarterly instalments.

2. Term Loans aggregating Rs. 97.87 crs. from Banks are secured by a first pari passu charge created on movable and immovable assets at a Company''s Plant in Karnataka, both present and future and also secured by way of hypothecation created / to be created on the specified movable assets at Company''s Plants in Rajasthan, Madhya Pradesh and Karnataka. Term Loan from one bank amounting to Rs. 54.54 crs. is repayable in 17 equal quarterly instalments and from another bank Rs. 43.33 crs. is repayable in 13 equal quarterly instalments.

3. Term Loans aggregating Rs. 93.87 crs. from Banks, secured by a first pari passu charge created on movable and immovable assets at a Company''s Plant in Karnataka, both present and future are repayable in 36 equal quarterly instalments commencing from 01.04.2014.

4. Term Loans aggregating Rs. 530 crs. from Banks and Foreign Currency Loan from a Financial Institution amounting to Rs. 225.42 crs. (including Rs. 33.07 crs. for foreign exchange fluctuation), secured by a first pari passu charge created on movable and immovable assets at a Company''s Plant in Tamilnadu, both present and future are repayable in 36 equal quarterly instalments commencing from 01.04.2014. The first instalment of loan from the financial institution has already been paid.

5. Foreign Currency Loans of Rs. 113.07 crs. (net of Rs. 1.39 crs. foreign exchange fluctuation) from a Bank, secured by charge by way of hypothecation of specified assets at Company''s Plants in Rajasthan, Karnataka and Tamilnadu, is repayable in 32 equal quarterly instalments commencing from February 2016.

6. Term Loan of Rs. 0.03 cr. from a body corporate, secured by hypothecation of specified vehicle is repayable in 6 equated monthly instalments.

7. Term Loan of Rs. 49.04 crs. from a body corporate to be secured by way of hypothecation on the specified assets at a Company''s Plant in Karnataka is repayable in 24 equal quarterly instalments.

8. Deferred Sales Tax Loan outstanding Rs. Nil from Madhya Pradesh State Industrial Development Corporation Limited, was secured by first available charge on movable and immovable assets (subject to charges referred to in note 1 & 2 on movable and immovable assets of Company''s Plant in Madhya Pradesh).

9. Loan of Rs. 50 crs. from a Bank, secured by a subservient charge on current assets of the Company, is repayable on 31.03.2016.

10. Term Loans carrying first pari passu charge on the movable and immovable assets, are subject to prior charge of banks on stocks and book debts for working capital borrowings.

11. Unsecured Deferred Sales Tax Rs. 102.72 crs. is repayable in 4 equal annual instalments.

12. Fixed Deposits of Rs. 8.38 crs., Rs. 13.41 crs. and Rs. 12.27 crs. (aggregating Rs. 34.06 crs.) are due for repayment in 2014-15, 2015-16 and 2016-17 respectively.

* Represents Working Capital borrowings secured by hypothecation of stocks and book debts etc. of the Company, both present and future and second charge created on movable and immovable assets of the Company''s Plants in Rajasthan, Madhya Pradesh, Karnataka and Tamilnadu.

* Buildings include Rs. 2.05 crs. constructed on leased land and 32 shares held in co-operative housing societies,

# Being amortised over a period of 5 years,

* Includes capitalisation of foreign exchange fluctuation Rs. 22.22 crs. (Unamortised fluctuation as on 31.03.2014 : Rs. 32.40 crs.)

* Government Subsidy of Rs. 0.47 cr. is reduced from cost of Plant & Equipments,

Factory & Service buildings and Plant and Equipments of Company''s Plant at Jaykaygram were revalued as at 1st January 1985 & 1st April 1991. On 1st April 1997 the revaluation of such assets was updated along with similar assets of Banmore plant. The revaluation of said assets of Jaykaygram and Banmore was further updated alongwith Factory Land and Township building as at 1st April 2002 based on replacement cost by a Valuer. The Gross Value includes revaluation of Rs. 545.21 crs. (Previous year: Rs. 556.25 crs.)

# Under lien with Issuer.

* Pledged with bank for loans availed by certain foreign subsidiaries.

** Net of provision for diminution.

@ Pursuant to the merger of JK Sugar Ltd. with Dhampur Sugar Mills Ltd., the company has received 18,01,817 no(s) of Cumulative Redeemable Preference Shares of Dhampur Sugar Mills Limited against the Preference Shares of JK Sugar Ltd.

$ Pursuant to the merger of JK Sugar Ltd. with Dhampur Sugar Mills Ltd., the company has received 4,60,075 shares of Dhampur Sugar Mills Ltd.

against 16,73,000 shares of JK Sugar Ltd. in the ratio of 275:1000.

A During the year, bonus shares received.

13. Estimated amount of contracts remaining to be executed on capital account Rs. 603.54 crs. (Previous year: Rs. 46.53 crs.).

14. Contingent liabilities in respect of claims not accepted and not provided for Rs. 41.89 crs. (Previous year: Rs. 30.71 crs.) pertain to Excise & Customs duty matters in appeal Rs. 8.60 crs., Service tax matters Rs. 0.04 cr., Sales Tax matters in appeal Rs. 3.40 crs., Income tax matters in appeal Rs. 2.97 crs. & other matters Rs. 26.88 crs. (Previous year: Rs. 4.00 crs., Rs. 0.04 cr., Rs. 3.64 crs., Rs. 3.78 crs. & Rs. 19.25 crs. respectively).

15. Bills discounted with Banks outstanding Rs. 14.09 crs. (Previous year: Rs. 4.24 crs.).

16. Excise Duty liability on account of valuation of Finished Goods is disputed and is yet to be determined. Without prejudice to the Company''s stand in this behalf, as per Government''s desire an adhoc amount of Rs. 5.45 crs. was paid under protest in earlier years and debited to ''Advances Recoverable'' and an equivalent amount was provided in Profit and Loss Statement. On Writ Petition filed by the Company in the Hon''ble Delhi High Court, the said Court directed the Excise Authorities to determine the valuation of finished goods in accordance with law and observations made in the order.

17. Debts over six months / Advances include Rs. 3.28 crs. (Previous year: Rs. 2.88 crs.) for which legal and other necessary action has been taken. In the opinion of the Management, these debts are recoverable and the same have been classified as good.

18. In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

19. The Company has taken certain specified Plant & Machinery on operating lease basis, which is cancellable at the option of lessee.

20. The Company has worked out reversal of Modvat Credit availed on exports under Value Based Advance Licence in earlier years and reversed the same in accounts. Pursuant to special scheme announced by the Government, the Company has also paid interest on such reversals. Further, the Excise department has issued certain basis for reversal of Modvat, which is disputed and has been contested by the Company in a Writ Petition before the Hon''ble Delhi High Court and directions have been issued to treat the reversal already made by the Company as provisional.

21. a. Forward Contracts for hedging Payables - US $ 41.60 Million and Euro 0.79 Million (Previous year: US $ 26.31 Million, Euro 0.31 Million and GBP 0.69 Million) are outstanding as at 31.03.2014.

b. Foreign currency exposure unhedged net payable is Rs. 158.18 crs. - US $ 26.32 Million (Previous year: Rs. 455.43 crs. - US $ 83.73 Million) as at 31.03.2014.

22. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of information available with the Company are as under:

(i) Principal & Interest amount due and remaining unpaid as at 31.03.2014: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) Interest Accrued and unpaid as at 31.03.2014: Nil (Previous year: Nil).

23. The Company has not provided diminution in the value of certain long term strategic investments, since in the opinion of the Board, such diminution in their value is temporary in nature, considering the inherent value, nature of investments, the investees'' assets and expected future cash flow from such investments.

24. Exceptional items include net impact of unfavourable Foreign Exchange Rate fluctuation Rs. 70.94 crs. (Previous Year: Rs. 52.09 crs.), net gain on sale of certain assets Rs. 1.19 crs. (Previous Year: Rs. 24.83 crs.), and expenditure on VRS for the employees Rs. 6.08 crs. (Previous Year: Rs. 3.66 crs.).

(iii) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

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

(v) Contributions to PF (trust) during the 12 months ended 31st March, 2014 of Rs. 1.27 crs. (Previous Year: Rs. 1.07 crs.) has been included under the head Employee Benefits Expense. (Refer Note 27)

(b) Defined Contribution Plans -

Employer''s Contributions to Provident and other Funds charged off during the 12 months ended 31st March, 2014 of Rs. 19.62 crs. (Previous Year: Rs. 19.23 crs.) has been included under the head Employee Benefits Expense. (Refer Note 27)

II. Remuneration to Chairman & Managing Director Rs. 7.74 crs. (Rs. 3.48 crs.), Managing Director Rs. 4.53 crs. (Rs. 0.63 cr.), Dy. Managing Director Rs. 4.60 crs. (Rs. 1.51 crs.), Whole time Director Rs. 1.73 crs. (Rs. 1.35 crs.) and President & Director Rs. 3.16 crs. (Rs. 2.32 crs.). (Previous year figures in brackets)

Received Rs. 0.38 cr. and Rs. 0.13 cr. against Share warrants allotted to Chairman & Managing Director and Managing Director respectively.

25. Figures less than Rs. 50000 have been shown at actual in bracket.

26. Previous year figures have been reclassified / regrouped / recast, wherever necessary.


Mar 31, 2013

1. Estimated amount of contracts remaining to be executed on capital account Rs. 46.53 crs. (Previous year: Rs. 145.19 crs.).

2. Contingent liabilities in respect of claims not accepted and not provided for Rs. 30.71 crs. (Previous year: Rs. 41.75 crs.) pertaining to Excise duty matters in appeal Rs. 4.00 crs., Service tax matters Rs. 0.04 cr., Sales Tax matters in appeal Rs. 3.64 crs., Income tax matters in appeal Rs. 3.78 crs. & other matters Rs. 19.25 crs. (Previous year: Rs. 4.47 crs., Rs. 0.04 cr., Rs. 5.59 crs., Rs. 10.54 crs. & Rs. 21.11 crs. respectively).

3. Bills discounted with Banks outstanding Rs. 4.24 crs. (Previous year: Rs. 12.53 crs.).

4. Excise Duty liability on account of valuation of Finished Goods is disputed and is yet to be determined. Without prejudice to the Company''s stand in this behalf, as per Government''s desire an adhoc amount of Rs. 5.45 crs. was paid under protest in earlier years and debited to ''Advances Recoverable'' and an equivalent amount was provided in Profit and Loss Statement. On Writ Petition filed by the Company in the Hon''ble Delhi High Court, the said Court directed the Excise Authorities to determine the valuation of finished goods in accordance with law and observations made in the order.

5. Capital work in progress includes Machinery in stock / transit, construction / erection materials, cost paid for land and the following pre-operative expenses pending allocation:

6. Debts over six months / Advances include Rs. 2,88 crs, (Previous year: Rs. 2,98 crs,) for which legal and other necessary action has been taken, In the opinion of the Management, these debts are recoverable and the same have been classified as good,

7. In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined,

8. The Company has taken certain specified Plant & Machinery on operating lease basis, which is cancellable at the option of lessee,

9. The Company has worked out reversal of Modvat Credit availed on exports under Value Based Advance Licence in earlier years and reversed the same in accounts, Pursuant to special scheme announced by the Government, the Company has also paid interest on such reversals, Further, the Excise department has issued certain basis for reversal of Modvat, which is disputed and has been contested by the Company in a Writ Petition before the Hon''ble Delhi High Court and directions have been issued to treat the reversal already made by the Company as provisional,

10. a, Forward Contracts for hedging Payables - Rs. 145,18 crs, - US $ 26,31 Million, Rs. 2,23 crs, - Euro 0,31 Million and Rs. 6,16 crs, - GBP 0,69 Million (Previous year: Rs. 7,39 crs, - US $ 1,40 Million, Rs. 19,28 crs, - Euro 2,78 Million and Rs. 1,30 crs, - GBP 0,15 Million) and for hedging receivables - Nil (Previous year: Rs. 57,89 crs, - US $ 12,00 Million) are outstanding as at 31,03,2013, b, Foreign currency exposure unhedged net payable is Rs. 455,43 crs, - US $ 83,73 Million (Previous year: Rs. 604,73 crs,- US $ 118,21 Million) as at 31,03,2013,

11. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of information available with the Company are as under:

(i) Principal & Interest amount due and remaining unpaid as at 31,03,2013: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) Interest Accrued and unpaid as at 31,03,2013: Nil (Previous year: Nil),

12. The Company has not provided diminution in the value of certain long term strategic investments, since in the opinion of the Board, such diminution in their value is temporary in nature, considering the inherent value, nature of investments, the investees'' assets and expected future cash flow from such investments,

13. Exceptional items include net impact of unfavourable Foreign Exchange Rate fluctuation Rs. 52,09 crs, (Previous year: Rs. 63,17 crs,), net gain on sale of certain assets Rs. 24,83 crs, (Previous year: Rs. 76,42 crs,), and expenditure on Voluntary Retirement Scheme (VRS) for the employees Rs. 3,66 crs, (Previous year: Rs. 11,58 crs,),

14. Related Parties:

a) Subsidiaries:

J. K. International Ltd.

J. K. Asia Pacific Ltd.

J. K. Asia Pacific (S) Pte. Ltd. (Subs. of J. K. Asia Pacific Ltd.)

Lankros Holdings Ltd.

Sarvi Holdings Switzerland AG. (Subs. of Lankros Holdings Ltd.)

JK Tornel S.A.de C.V (JKTSA- Subs. of Sarvi Holdings Switzerland AG.)

Comercializadora America Universal, S.A. de C.V*

Companfa Hulera Tacuba, S.A. de C.V. *

Companfa Hulera Tornel, S.A. de C.V. (CHT)*

Companfa Inmobiliaria Norida, S.A. de C.V. *

General de Inmuebles Industriales, S.A. de C.V. *

Gintor Administracion, S.A. de C.V. *

Hules y Procesos Tornel, S.A. de C.V. *

* Subsidiary of JKTSA

b) Associates:

Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI)

Valiant Pacific LLC. (VPL)

c) Key Management Personnel (KMP):

Dr. Raghupati Singhania Chairman & Managing Director

Shri Bharat Hari Singhania Managing Director

Shri Vikrampati Singhania Dy. Managing Director

Shri Swaroop Chand Sethi Whole Time Director

Shri Arun Kumar Bajoria President & Director

d) Enterprise over which KMP is able to exercise Significant Influence:

JK Lakshmi Cement Ltd. (JKLC)

Fenner (India) Ltd. (FIL)

15. Figures less than Rs. 50000 have been shown at actual in bracket.

16. Previous year figures have been reclassified / regrouped / recast, wherever necessary.


Mar 31, 2010

1. The proceeds of the Rights Issue have been fully utilised for the objects stated in the Letter of Offer dated July 18, 2008.

2. Estimated amount of contracts remaining to be executed on capital account Rs. 164.49 crs. (Previous year: Rs. 51.65 crs.).

3. Contingent liabilities in respect of claims not accepted and not provided for Rs. 35.64 crs. (Previous year: Rs. 34.86 crs.) pertaining to Excise duty matters in appeal Rs. 4.39 crs., Service tax matters Rs. 1.30 crs., Sales tax matters in appeal Rs. 2.36 crs., Income tax matters in appeal Rs. 6.76 crs. & other matters Rs. 20.83 crs. (Previous year: Rs. 2.63 crs,, Rs. 2.01 crs., Rs. 1.76 crs., Rs. 6.99 crs. & Rs. 21.47 crs. respectively).

4. Bills discounted with Banks outstanding Rs. 15.40 crs. (Previous year: Rs. 30.90 crs.).

5. Excise Duty liability on account of valuation of Finished Goods is disputed and is yet to be determined. Without prejudice to the Companys stand in this behalf, as per Governments desire an adhoc amount of Rs. 5.45 crs. was paid under protest in earlier years and debited to Advances Recoverable and an equivalent amount was provided in Profit and Loss Account. On Writ Petition filed by the Company in the Honble Delhi High Court, the said Court directed the Excise Authorities to determine the valuation of finished goods in accordance with law and observations made in the order.

6. The Company has given guarantee to a bank in respect of loan outstanding as at 31.03.2010 of Rs. 0.45 cr, (Previous year: Rs. 2.29 crs.) in respect of a body corporate against counter indemnity.

7. Miscetaneous experolufe to fre exlerrt ncrt written off iepieserris Comperisoliori paid uriaei VRS Rs. Nl {Previous year. Rs. 5.21 crs.)

VRS expenses to the extent not written off upto 31.03.2009 and also for the current year have been charged to Profit & Loss Account during the year, This has resulted in an additional charge of Rs. 4.50 crs. to the Profit & Loss Account,

8. Factory & Service buildings and Plant and Machinery of Companys Plant at Jaykaygram were revalued as at 1st January, 1985 & 1 st April, 1991. On 1 st April, 1997 the revaluation of such assets was updated along with similar assets of Banmore plant. The revaluation of said assets of Jaykaygram and Banmore was further updated alongwith Factory Land and Township building as at 1 st April, 2002 based on replacement cost by a Valuer. The Gross Block as at 31,03.2010 as well as Previous year include cumulative surplus of Rs. 667.78 crs. arising on revaluation.

9. Capital work in progress includes machinery in stock / transit, construction / erection materials, advances for construction and machinery, expenditure on ERP implementation and also includes the following pre-operative expenses pending allocation:

10. a) Debts over six months and Advances are net of Provisions made for Doubtful Debts Rs. 3.03 crs. and Advances Rs. 0.32 cr. (Previous year: Rs. 3.13 crs. and Rs. 0.32 cr. respectively). b) Debts over six months / Advances include Rs. 3.66 crs. (Previous year: Rs. 4.22 crs.) for which legal and other necessary action has been taken. In the opinion of the Management, these debts are recoverable and the same have been classified as good.

11. In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.

12. Raw materials consumed has been determined after adjusting Rs. 26.83 crs. (Previous year: Rs. 40.81 crs.) accounted for on accrual basis in respect of import entitlements against exports made under Duty Exemption Scheme.

13. The Company has worked out reversal of Modvat Credit availed on exports under Value Based Advance Licence in earlier years and reversed the same in accounts. Pursuant to special scheme announced by the Government, the Company has also paid interest on such reversals. Further, the Excise department has issued certain basis for reversal of Modvat, which is disputed and has been contested by the Company in a Writ Petition before the Honble Delhi High Court and directions have been issued to treat the reversal already made by the Company as provisional.

14. a) Exchange difference (net) amounting Rs. 5.83 crs. (Previous year: Rs. 31.32 crs. - debited) has been credited in respective heads of account in Profit and Loss account.

b) Forward Contracts for hedging Payables - Rs. 76.29 crs. - US $ 16.40 Million, Rs. 0.90 cr. -Yen 17.16 Million, Rs. 74.19 crs. - Euro 11.03 Million and Rs. 9.87 crs. - GBP 1.29 Million (Previous year: Rs. 8.54 crs. - US $ 1.75 Million and Rs. 15.39 crs. - Yen 292.46 Million) are outstanding as at 31.03.2010.

c) Foreign currency exposure unhedged net payable is Rs. 104.65 crs. - US $ 23.18 Million (Previous year: Rs. 51.13 crs. - US$ 10.04 Million) as at 31.03.2010.

15. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent information available with the Company are as under: (i) Principal & Interest amount due and remaining unpaid as at 31.03.2010: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) Interest accrued and unpaid as at 31.03.2010: Nil (Previous year: Nil).

16. The Company has not provided diminution in the value of certain unquoted long term strategic investments, since in the opinion of the Board, such diminution in their value is temporary in nature, considering the inherent value, nature of investments, the investees assets and expected future cash flow from such investments.

17. Research and Development expenses amounting to Rs. 16.39 crs. (Previous year: Rs. 18.21 crs.) have been included in respective revenue accounts.

18. Investor Education and Protection Fund includes Rs. 0.40 cr. for unclaimed dividend (Previous year: Rs. 0.43 cr.), Rs, 1.63 crs. for unclaimed fixed deposits (Previous year: Rs. 1.38 crs.), and Rs. 0.01 cr. for unclaimed amount on debentures (Previous year: Rs. 0.08 cr,), which shall be deposited on respective due dates.

19. The disclosures required under Accounting Standard (AS-15) "Employee Benefits" notified in the Companies (Accounting Standards) Rules, 2006 are as given below:

(ii) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

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

(iv) Contributions to PF (trust) during the 12 months ended 31st March, 2010 of Rs. 0.88 cr, (Previous year: Rs. 3.45 crs.) has been included under the head Staff Cost. (Refer Schedule 11)

Pending the issuance of the Guidance Note from the Institute of Actuaries of India, the Companys actuary has expressed his inability to reliably measure the provident fund liability.

(b) Defined Contribution Plans:

Employers Contributions to Provident and other Funds charged off during the 12 months ended 31st March, 2010 of Rs. 16.46 crs. (Previous year: Rs. 19.66 crs.) has been included under the head Staff Cost. (Refer Schedule 11)

20. Related Parties:

a) Subsidiaries:

J, K. International Ltd.

J. K. Asia Pacific Ltd.

J. K. Asia Pacific (S) Pte. Ltd. (Subs, of J. K. Asia Pacific Ltd.)

Lankros Holdings Ltd.

Sarvi Holdings Switzerland AG. (Subs, of Lankros Holdings Ltd.)

Sunrise Hold Co. S.A. De C.V. (Subs, of Sarvi Holdings Switzerland AG.)

Empresas Tornel, S.A. De C.V. (ETSA - Subs, of Sunrise Hold Co. S.A. De C.V. )

Comercializadora America Universal, S.A. De C.V. (Subs, of ETSA)

Compahia Hulera Tacuba, S.A. De C.V. (Subs, of ETSA)

Compahia Hulera Tornel, S.A. De C.V. (CHT - Subs, of ETSA)

Compahia Inmobiliaria Norida, S.A. De C.V. (Subs, of ETSA)

General de Inmuebles Industrials, S.A. De C.V. (Subs, of ETSA)

Gintor Administracion, S.A. De C.V. (Subs, of ETSA)

Hules y Procesos Tornel, S.A. De C.V. (Subs, of ETSA)

b) Associates:

Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI) Valiant Pacific LLC. (VPL)

c) Key Management Personnel (KMP):

Dr. Raghupati Singhania Vice Chairman & Managing Director

Shri Bharat Hari Singhania Managing Director

Shri Vikrampati Singhania Dy. Managing Director

Shri Swaroop Chand Sethi Whole Time Director

Shri Arun Kumar Bajoria President & Director (w.e.f. 20th January, 2010)

d) Enterprise over which KMP is able to exercise Significant Influence: JK Lakshmi Cement Ltd. (JKLC)

21. The figures for the current year April, 2009 - March, 2010 (12 months) are not comparable with the figures for the previous period October, 2007 - March, 2009 (18 months).

22. Figures less than Rs. 50000 have been shown at actual in bracket.

23. Figures for the previous year have been regrouped / rearranged / recast, wherever necessary

 
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