Notes to Accounts of Jay Bharat Maruti Ltd.

Mar 31, 2018

NOTES ANNEXED TO AND FORMING PART OF THE ACCOUNTS

1. GENERAL INFORMATION

Jay Bharat Maruti Limited (JBML) ("The Company") is a public limited company incorporated in India, listed on Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The address of its registered office is 601, Hemkunt Chambers, 89, Nehru Place, New Delhi, New Delhi-110019. The Company is a Associate of Maruti Suzuki India Limited. The principal activities of the Company are manufacturing of sheet metal components, rear axle, muffler assemblies, fuel neck and tools & dies for motor vehicles, components and spare parts.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorize for issue on 16-04-2018.

NOTE-2 :- SIGNIFICANT ACCOUNTING POLICIES

2. Significant Accounting Policies

2.1 Statement of Compliance

The Financial Statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the section 133 of the companies Act, 2013 ("the Act") read with the companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.

2.2 Basis of preparation and presentation

The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.

The principal accounting policies are set out below.

All assets and liabilities have been classified as current or non-current according to the Company''s operating cycle and other criteria set out in the Act. 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 twelve months for the purpose of current or non-current classification of assets and liabilities.

2.3 Use of Estimates

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.

Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods affected.

2.4 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, cash discount, trade allowances, sales incentives and value added taxes and amount collected on behalf of third parties. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured and it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Company''s activities as described below. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transactions and the specifics of each arrangement.

Sale of goods

Revenue from sales of goods is recognized when the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts, volume rebates & cash discount.

Income from services

Income from services is recognized by reference to the stage of completion of the transaction at the end of the reporting period. Dividend and interest income

Dividend income from investments is recognized when the shareholders'' right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

For all Financial instruments measured either at amortized or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of the financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instruments but does not consider the expected credit losses. Interest income is included in other income in the Statement of Profit and Loss. Interest income in respect of financial instruments measured at fair value through profit or loss is included in other income.

2.5 Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Company as lessor

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company''s net investment outstanding in respect of the leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognised in the period in which such benefits accrue.

The Company as lessee

Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Company''s policy on borrowing costs.

Rental expense from operating leases is recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases, such increases are recognised in the period in which such benefits accrue.

2.6 Foreign Currencies

Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in statement of profit or loss.

Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items is recognised in line with the gain or loss of the item that gave rise to the translation difference (translation differences on items whose gain or loss is recognised in Other Comprehensive Income or the Statement of Profit and Loss is also recognised in Other Comprehensive Income or the Statement of Profit and Loss respectively).

2.7 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets are deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred.

Borrowing costs consist of interest, which is computed as per effective interest method, and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

2.8 Employee Benefits

Short-term obligations

Liabilities for wages and salaries including non-monetary benefits that are expected to be settled within the operating cycle after the end of the period in which the employees render the related services are recognised in the period in which the related services are rendered and are measured at the undiscounted amount expected to be paid.

Other long-term employee benefit obligations

Liabilities for leave encashment and compensated absences which are not expected to be settled wholly within the operating cycle after the end of the period in which the employees render the related service are measured at the present value of the estimated future cash outflows which is expected to be paid using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period on Government bonds that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.

Post-employment obligations Defined benefit plans

The Company has defined benefit plans namely gratuity fund for employees. The gratuity fund is recognised by the income tax authorities and are administered through Trust set up by the LIC. Any shortfall in the size of the fund maintained by the Trust is additionally provided for in profit or loss.

The liability or asset recognised in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by Actuary using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in profit or loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.

Defined contribution plans

The Company has defined contribution plans for post retirements benefits, namely, Employee Provident Fund Scheme administered through Provident Fund Commissioner and Superannuation Fund administered through Life Insurance Corporation of India. The Company''s contribution are charged to revenue every year. The Company has no further payment obligations once the contributions have been paid. The Company''s contribution to State Plans namely Employees'' State Insurance Fund and Employees'' Pension Scheme are charged to the Statement of Profit and Loss every year.

Termination Benefits

A liability for the termination benefit is recognised when the Company can no longer withdraw the offer of the termination benefit.

2.9 Taxation

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

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

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

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

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

Current and deferred tax for the year

Current and deferred tax are recognised in the Statement of Profit and Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the income taxes are also recognised in other comprehensive income or directly in equity respectively.

2.10 Property, Plant and Equipment (PPE)

Property, Plant and Equipment (PPE) are stated at cost of acquisition, net of accumulated depreciation and accumulated impairment losses, if any. Freehold land is measured at cost and is not depreciated.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. The other repairs and maintenance of revenue nature are charged to the Statement of Profit and Loss during the reporting period in which they have incurred.

Transition to IND AS

The Company has elected to use a previous GAAP cost (cost less accumulated depreciation and impairment losses (if any)) of an item of property, plant and equipment at, or before, the date of transition to Ind ASs as deemed cost at the date of transition in accordance with accounting policy option available in Ind AS 101

Depreciation methods, estimated useful lives and residual value

Depreciation is calculated using the straight-line method on a pro-rata basis from the month in which each asset is ready to use to allocate their cost, net of their residual values, over their estimated useful lives.

Estimated useful life of assets are as follows which is based on technical evaluation of the useful lives of the assets:

Property, plant and equipment	Useful lives based on technical evaluation
Plant & machinery	20 years
Electric Installation	20 years
Factory Building (Including Tube well)	28-29 Years
Vehicles	5 years
Furniture & Fixtures	5 years
Trolleys & Bins (Dies, Fixtures & Special Purpose Machine)	5 years
Dies, Fixtures & Jigs	3-9 years
Computers	3 Years
Office Equipments	5 Years

The assets'' residual values, estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis

Depreciation is charged on pro-rata basis for assets purchased / sold during the year. Individual assets costing Rs 5000/- or less are depreciated in full in the year of purchase. Plant & Machinery and other assets the written down value of which at the beginning is the year is Rs. 5000/- or less and Rs1000/- or less respectively are depreciated at the rate of 100%.

Freehold is not amortised.

Gains and losses on disposal are determined by comparing proceeds with carrying amount and are credited / debited to profit or loss.

2.11 Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost of acquisition and are stated net of accumulated amortization and accumulated impairment losses, if any.

The cost of an intangible asset includes purchase cost (net of rebates and discounts), including any import duties and non-refundable taxes, and any directly attributable costs on making the asset ready for its intended use.

Transition to IND AS

The company has elected to use a previous GAAP cost (cost less accumulated depreciation and impairment losses (if any)) of an intangible assets at, or before, the date of transition to Ind ASs as deemed cost at the date of transition in accordance with accounting policy option in Ind AS 101.

Amortisation methods and useful lives

The Cost of Intangible assets are amortized on a straight line basis over their estimated useful life which is as follows. Residual Value is considered as Nil in the below cases:

Nature of Assets	Life
Technical knowhow	3 years
Computer software	3 years

The amortisation period and method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.

Impairment of Tangible and Intangible Assets

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

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

2.12 Inventories

Inventories are valued at the lower of cost or net realizable value, less any provisions for obsolescence. Cost is determined on the following basis:-

Raw Material is recorded at cost on a first-in, first-out (FIFO) basis; Stores & spares are recorded at cost on a weighted average cost formula.

Finished goods and work-in-process are valued at raw material cost cost of conversion and attributable proportion of manufacturing overhead incurred in bringing inventories to its present location and condition.

By products and scrap are valued at net realizable value.

Machinery spares (other than those qualified to be capitalized as PPE and depreciated accordingly) are charged to profit and loss on consumption

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

2.13 Provisions and contingencies

Provisions

Provisions are recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessment of the time value of money and the risks specific to the liability.

Provisions are determined based on best management estimate required to settle the obligation at balance sheet date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate Contingent Liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Contingent Assets

Contingent asset being a possible asset that arises from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company, is not recognized but disclosed in the financial statements.

2.14 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.

Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost using the effective interest method or fair value, depending on the classification of the financial assets

Classification of financial assets

Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

• those measured at amortised cost

The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.

A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair value through profit or loss under the fair value option:

• Business model test: the objective of the Company''s business model is to hold the financial asset to collect the contractual cash flows.

• Cash flow characteristic test: the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:

• Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets.

• Cash flow characteristic test: the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All other financial assets are measured at fair value through profit or loss

2.15 Investments in equity instrument at fair value through other comprehensive income (FVTOCI)

On initial recognition, the Company can make an irrevocable election (on an instrument by instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instrument. This election is not permitted if the equity instrument is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains / losses arising from changes in fair value recognised in other comprehensive income. This cumulative gain or loss is not reclassified to the Statement of Profit and Loss on disposal of the investments.

The Company has equity investments in certain entities which are not held for trading. The Company has elected the fair value through other comprehensive income irrevocable option for all such investments. Dividend on these investments are recognised in Statement of Profit & Loss.

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

Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.

Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognising the gains or losses on them on different bases.

Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on Remeasurement recognised in profit or loss.

2.16 Trade receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment.

2.17 Cash and cash equivalents

In the cash flow statement, cash and cash equivalents includes cash in hand, cheques and balances with bank. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement. Book overdraft are shown within other financial liabilities in the balance sheet and forms part of operating activities in the cash flow statement.

2.18 Impairment of Financial Assets: -

The Company assesses impairment based on expected credit losses (ECL) model to the following:

• financial assets measured at amortised cost

• financial assets measured at fair value through other comprehensive income

Expected credit loss are measured through a loss allowance at an amount equal to :

• the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or

• full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).

For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.

Derecognition of financial assets

A financial asset is derecognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients

• The right to receive cash flows from the asset has expired.

Foreign Exchange Gains and Losses

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of each reporting period. For foreign currency denominated financial assets measured at amortised cost or fair value through profit or loss the exchange differences are recognised in profit or loss except for those which are designated as hedge instrument in a hedging relationship. Further change in the carrying amount of investments in equity instruments at fair value through other comprehensive income relating to changes in foreign currency rates are recognised in other comprehensive income.

2.19 Financial liabilities and equity instruments

2.19.1 Classification of debt or equity

Debt or equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2.19.2 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

2.19.3 Financial liabilities

All financial liabilities are subsequently measured at amortized cost using the effective interest rate method or at fair value through Statement of Profit and Loss.

2.19.3.1 Trade and other payables

Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.

2.19.3.2 Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in Statement of Profit and Loss over the period of the borrowings using the effective interest rate method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.

The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in Statement of Profit and Loss.

2.19.3.3 Foreign exchange gains or losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognised in Statement of Profit and Loss.

2.19.3.4 Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired.

2.20 Derivative Financial Instruments:-

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts, interest rate and cross currency swaps.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in statement of profit & loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in Statement of Profit and Loss depends on nature of the hedging relationship and the nature of the hedged item.

2.21 Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

2.22 Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above

2.22 Earnings Per Share

Basic Earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. For the purpose of calculating Diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, except where the result would be anti-dilutive.

2.23 Rounding of amounts

All amounts disclosed in the financial statements and the accompanying notes have been rounded off to the nearest lacs as per the requirement of Schedule III of the Companies Act 2013, unless otherwise stated

2.24 Dividends

Final dividends on shares are recorded on the date of approval by the shareholders of the Company.

2.25 Royalty

The Company pays/accrues for royalty in accordance with the relevant licence agreements.

Note-3: PROPERTY, PLANT AND EQUIPMENT

									in Lakhs)
Description	Freehold Land	Leasehold Land	Buildings	Plant and Equipment	Furniture & Fixtures	Office Equipment	Computers & Computer System	Vehicles	Total
Gross Block
As at 01 April 2016*	334.79	29.16	4,666.62	37,811.93	91.33	101.80	58.08	183.66	43,277.37
Additions	-	-	35.46	9,000.42	6.31	69.35	36.56	79.75	9,227.85
Disposals	-	-	-	(143.28)		(0.15)	(1.06)	(28.43)	(172.92)
As at 31 March 2017	334.79	29.16	4,702.08	46,669.07	97.64	171.00	93.58	234.98	52,332.30
Additions	-	-	2,495.46	20,235.10	58.95	82.89	38.97	161.86	23,073.23
Disposals	-	-	-	(167.72)		(0.11)	(1.66)	(32.26)	(201.75)
As at 31 March 2018	334.79	29.16	7,197.54	66,736.45	156.59	253.78	130.89	364.58	75,203.77
Accumulated Depreciation
As at 01 April 2016*	-	2.75	202.80	3,406.56	23.37	20.38	15.24	47.17	3,718.27
Charge for the year	-	26.41	203.13	3,673.09	22.05	24.06	20.87	47.79	4,017.40
Adjustments on sales	-	-	-	(8.63)	-	-	(0.46)	(8.64)	(17.73)
As at 31 March 2017	-	29.16	405.93	7,071.02	45.42	44.44	35.65	86.32	7,717.94
Charge for the year	-	-	227.53	4,297.95	25.54	35.95	24.69	48.25	4,659.91
Adjustments on sales	-	-	-	(75.12)	-	-	(1.02)	(24.02)	(100.16)
As at 31 March 2018	-	29.16	633.46	11,293.85	70.96	80.39	59.32	110.55	12,277.70
Net block as at 31 March 2017	334.79	(0.00)	4,296.15	39,598.05	52.22	126.56	57.93	148.66	44,614.36
Net block as at 31 March 2018	334.79	(0.00)	6,564.08	55,442.60	85.63	173.39	71.57	254.03	62,926.08
# Includes a small portion of Freehold Land of the Company situated at Gurugram is provided on cancellable operating lease. * For Property, Plant and Equipment charged as security - refer Note No. 17 & 21.

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Mar 31, 2017

NOTE 1 : SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. These include recognition and measurement of financial instruments, estimates of useful lives and residual value of Property, Plant and Equipment and intangible assets, valuation of inventories, measurement of recoverable amounts of cash-generating units, measurement of employee benefits, actuarial assumptions, provisions etc.

Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The Company continually evaluates these estimates and assumptions based on the most recently available information. Revisions to accounting estimates are recognized prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected."

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

2. Gratuity benefits

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexity of the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

In determining the appropriate discount rate, management considers the interest rates of government bonds, and extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 46 .

3. Impairment of financial assets

The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss rates. The company uses judgment in making these assumptions and selecting the inputs to the impairment calculation based on the company''s past history and other factors at the end of each reporting period.

4. Estimates related to useful life of tangible assets :

Depreciation on tangible assets is calculated on a straight-line basis over the useful lives estimated by the management. These rates are in line with the lives prescribed under Schedule II of the Companies Act, 2013.

The management has re-estimated useful lives and residual values of all its assets. The management based upon the nature of asset, the operating condition of the asset, the estimated usage of the asset, past history of replacement and anticipated technological changes, believes that depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and equipment.

NOTE 5 : FINANCIAL INSTRUMENTS

6. Capital management

The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximizing the return to stakeholders through efficient allocation of capital towards expansion of business, optimization of working capital requirements and deployment of surplus funds into various investment options

The management of the Company reviews the capital structure of the Company on regular basis. As part of this review, the Board considers the cost of capital and the risks associated with the movement in the working capital.

The Group monitors its capital using gearing ratio, which is net debt divided to total equity. Net debt includes, Loans and borrowings less cash and cash equivalents.

7. Fair value measurements

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:

The following is the basis of categorizing the financial instruments measured at fair value into Level 1 to Level 3:

Level 1: This level includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: This level includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3: This level includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

8. Financial risk management

The Group has a Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company''s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Group''s activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Group.

The risk management policies aims to mitigate the following risks arising from the financial instruments:

- Market risk

- Credit risk

- Liquidity risk

9. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. The Group is exposed in the ordinary course of its business to risks related to changes in foreign currency exchange rates and interest rates.

10. Foreign currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency) .

Foreign currency sensitivity analysis

The following tables demonstrate the sensitivity to a reasonably possible change in USD and JPY exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material.

11. Interest rate risk management

The company is exposed to interest rate risk because company borrow funds at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings. The company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note

Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates .

12. Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The Company''s exposure and wherever appropriate, the credit ratings of its counterparties are continuously monitored and spread amongst various counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management of the Company

Financial instruments that are subject to concentrations of credit risk, principally consist of balance with banks, trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Balances with banks were not past due or impaired as at the year end. In other financial assets that are not past dues and not impaired, there were no indication of default in repayment as at the year end

13. Liquidity risk management

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of long term bank loans, short term borrowings and finance leases etc. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

NOTE 14 : FIRST-TIME Ind AS ADOPTION RECONCILIATIONS

These are Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet as at April 1, 2015 (The Company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

15. Exemptions and exceptions availed

16. Ind-AS optional exemptions :

Ind AS 101 allows first time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

17. Deemed cost

Ind AS 101 permits a first time adopter to elect to fair value of its property, plant and equipment as recognized in financial statements as at the date of transition to Ind AS, measured as per previous GAAP and use that as its deemed cost as at the date of transition or apply principles of Ind AS retrospectively. Ind AS 101 also permits the first time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS. This exemption can be also used for intangible assets covered by Ind-AS 38.

18. Ind AS mandatory exceptions

19. Estimates

An entity estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 01 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP.

20. Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

21. De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

22. Cash Flow Statements

There were no significant reconciliation item between cash flows prepared under Indian GAAP and those prepared under Ind AS

23. Notes to the reconciliation of Balance Sheet as at April 1, 2015 and March 31, 2016 and the total comprehensive income for the year ended March 31, 2016.

Note-24. Proposed Dividend

Under the previous GAAP, proposed dividend including corporate dividend tax (CDT), are recognized as liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognized as liability in the period in which it is declared by the Company, usually when approved by the shareholders in a Annual general meeting, or paid.

Proposed Dividend, including corporate dividend (CDT) tax liability as on April 1, 2015 amounting to Rs. 519.56 Lacs was derecognized on the transition date with corresponding increase in retained earnings. The same has been recognized in retained earnings during the year ended March 31, 2016 as declared and paid. Proposed dividend including corporate dividend tax (CDT) liability as on March 31, 2016 amounting to Rs. 521.15 Lacs is also derecognized on that date with the corresponding increase in the retained earnings.

Note-25. Fair valuation of investments

Under the previous GAAP, Investments was presented under at Historical cost . Under Ind AS Investments are recognized at fair value through other Comprehensive Income. Thus, Investments is Increased by Rs. 596.56 Lacs and is recognized in other comprehensive income in Ind AS opening balance sheet as at April 1, 2015. The difference between the fair value and previous GAAP carrying value on transition date has been recognized as an adjustment to opening retained earnings / separate component of other equity.

Note-26 Exchange Fluctuation Charged off as per IND AS 109

Under the previous GAAP, Exchange Fluctuations on translation or settlement of foreign currency items are recognized in statement of Profit & Loss except for long term monetary items which are adjusted to the carrying cost of such assets. Under Ind AS Exchange fluctuations on translation or settlement of foreign currency monetary items are recognized in statement of Profit & Loss. Thus the company has recognized such exchange fluctuation in statement of Profit & Loss w.e.f 1st April,2015

Note-27 Re-measurement of Defined Benefit Obligation

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to statement of profit & loss. Under Ind AS, re-measurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined liability) are recognized in balance sheet through other comprehensive income. Thus, employee benefits expense is reduced by Rs. 10.25 Lacs and is recognized in other comprehensive income during the year ended March 31, 2016. The related current tax expense of Rs. 3.55 Lacs has also been reclassified from Statement of Profit and loss to other comprehensive income.

Note-28 Excise Duty

Under the previous GAAP, revenue from sale to goods was presented exclusive of excise duty. Under Ind AS revenue from sales of goods is presented inclusive of excise duty. Excise duty paid is presented on face of statement of profit and loss as a part of expense. This change has resulted in increase in total revenue and total expense for the year ended March 31, 2016 by Rs. 17868.28 Lacs. There is no impact on total equity and profit

Note-29 Cash Discount

Under the previous GAAP, cash discount was presented under other expenses. Under Ind AS revenue from sales of goods is recognized at fair value of consideration expected to be received. Accordingly revenue for the year ended March 31, 2016 is presented net of cash discount. This change has resulted in decrease in total revenue and total expense for the year ended March 31, 2016 by Rs. 8.11 Lacs. There is no impact on total equity and profit.

Note-30. Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit to profit as per Ind AS. Further, Indian GAAP profit is reconciled to total comprehensive income as per Ind AS.

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Mar 31, 2016

Rights, preferences and restrictions attached to shares

The company has one class of equity shares with a par value of Rs. 5/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of director is subject to the approval of shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

* Secured by first and exclusive charge on the specified movable fixed assets purchased/to be purchased including, without limitation, its movable plant and machinery, furniture, fixture, equipment, computer hardware, computer software, machinery spares, and tools and accessories and others movables so as to provide an asset cover of 1.5 times the loan amount at market valuation.

** Secured by Hypothecation of vehicle Financed

NOTE 1:- Consumption of Raw Materials and components has been computed by adding purchase to the opening stock and deducting closing stock verified physically by the management.

NOTE 2:- The Company is primarily engaged in the business of manufacturing of components for automobiles for Indian market which are governed by the same set of risk and returns. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17). Accordingly, segment information has not been disclosed.

NOTE 3 :- RETIREMENT BENEFITS

A The Company has calculated the various benefits provided to employees as under-

a) Provident Fund (Including Pension Scheme)

b) Superannuation Fund

c) Punjab & Haryana Labour Welfare fund

NOTE 4:- The Company uses forward exchange contracts and other derivative contracts to hedge against its foreign currency exposure relating to the underlying transaction on its capital and revenue account. The company does not use these contracts for trading or speculative purpose.

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Mar 31, 2015

Rs. In Lacs

31-Mar-15 31-Mar-14 1. CONTINGENT LIABILITIES NOT PROVIDED FOR

* Central Excise (net of amount paid under protest) 116.31 2906.62

* Service tax 114.92 31.64

* Income tax 2.25 83.44

* Bills Discounted 6959.89 4894.99

NOTE 2:- Consumption of Raw Materials and components has been computed by adding purchase to the opening stock and deducting closing stock verified physically by the management.

NOTE 3:- The Company is primarily engaged in the business of manufacturing of components for automobiles for Indian market which are governed by the same set of risk and returns. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17). Accordingly, segment information has not been disclosed.

NOTE 4:- Retirement Benefits

A. The Company has calculated the various benefits provided to employees as under-

a) Provident Fund (Including Pension Scheme)

b) Superannuation Fund

c) Punjab & Haryana Labour Welfare fund

NOTE 5:- The company is required to spend Rs. 56.23 Lacs during the year for 'Corporate Social Responsibility' Activity which has been paid to Neel Foundation Approved Trust for carrying out activities covered in Schedule VII to the Companies Act'2013

NOTE 6:- Derivative contracts entered into by the company and outstanding as on 31st March 2015.

For Hedging currency and interest Rate Related Risk:-

Nominal amount of derivatives including forward contracts entered into by the company and outstanding as on 31.03.2015 amount to Rs. 6328.63 Lacs (P.Y. Rs. 10821.99 Lacs)

All derivative contracts entered into by the company are for hedging purposes only.

Foreign currency exposures that are not hedged by derivative instruments as on 31.03.2015 amounts to Rs. 3630.52 Lacs (P.Y. Rs. 4136.21 Lacs).

Gain/Loss in respect of outstanding derivative contracts at the Balance Sheet date by marking them to market accounted for Rs. 915.06 Lacs (Net Loss) (P.Y. Rs. 546.82 Lacs (Net Gain)).

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Mar 31, 2014

NOTE 1:- STATEMENT OF TRANSACTIONS WITH RELATED PARTIES

Associates

Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

Key Management personnel and their relatives

Maruti Suzuki India Limited

JBM Industries Limited Neel Metal Products limited JBM Auto Limited

Mr. S. K. Arya, Chairman and Managing Director Mrs . Neelam Arya spouse of Mr. S. K. Arya, Chairman & MD Mr. Nishant Arya, son of Mr. S. K. Arya, Chairman & MD

NOTE 2:- Consumption of Raw Materials and components has been computed by adding purchase to the opening stock and deducting closing stock verified physically by the management.

NOTE 3:- The Company is primarily engaged in the business of manufacturing of components for automobiles for Indian market which are governed by the same set of risk and returns. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17). Accordingly, segment information has not been disclosed.

NOTE 4:- Maruti Suzuki India Ltd. (MSIL) has sold vehicles to the vendors and / or the employees of the vendors under the Maruti Car scheme"Hum Saath Saath". The EMI of vehicle sold to the vendors/ vendors employees has been accounted/ routed through the company.

NOTE 5:- Exceptional Item represents provision on account of cost of replacement of a component to a Customer.

NOTE 6:- The Company has received approval of Central Government vide SRN No. B63364343/1/2012-CL-VII dated 24th January, 2014 under section 198, 309(3) and 310 read with section 637A & 637AA of the Companies Act, 1956 for payment of an increased remuneration of Rs. 276.17 Lacs to managing director for the period from 1st April, 2011 to 31st March, 2012. Accordingly an arrear of remuneration ofRs. 128.81 Lacs (P.Y Nil) relating to financial year 2011-12 has been paid during the year.

NOTE 7:- The warranty charges in respect of a component are recovered by a customer from the Company. As the warranty charges are due to design fault and the company is liable only for manufacturing defect; the warranty charges to the extent of royalty is adjusted from the royalty amount payable to the technology supplier and the balance amount is shown as recoverable from Supplier.

NOTE 8:- Derivative contracts entered into by the company and outstanding as on 31st March 2014.

For Hedging currency and interest Rate Related Risk:-

Nominal amount of derivatives including forward contracts entered into by the company and outstanding as on 31.03.2014 amount to Rs. 10821.99 Lacs (P.Y. Rs. 13849.05 Lacs)

All derivative contracts entered into by the company are for hedging purposes only.

Foreign currency exposures that are not hedged by derivative instruments as on 31.03.2014 amounts to Rs. 4136.21 Lacs (P.Y. Rs. 3892.05 Lacs).

Gain/Loss accounted for Rs. 546.82 Lacs (Net Gain) (P.Y. Rs. 779.19 Lacs (Net Gain)) in respect of outstanding derivative contracts at the Balance Sheet date by marking them to market.

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Mar 31, 2013

Note 1:- The ministry of corporate affairs had issued clarifcation dated 09th Aug, 2012 on para 46A of notifcation number GSR 914(E) dated 29th Dec, 2011 on accounting standard 11 relating to effects on changes in foreign exchange rates. On account of change in accounting policy an amount of Rs.12.15 lacs has been capitalised for the year ended 31st March, 2013. It has resulted in increase in proft after tax for the year ended 31st March, 2013 by Rs.8.21 lacs and increase in EPS/Diluted EPS by Rs.0.04.

Note 2:- The company has decided to exercise the option provided in notifcation GSR No. 914(E) date 29th December 2011 issued by Ministry of Corporate Affairs regarding the treatment of exchange differences.

NOte 3.:- STATEEMENT OF TRANSACTION WITH RELATED PARTIES

Associates Enterprises over which Key Management Key Management Personnel and their

Personnel and their relatives are able to relatives exercise signifcant infuence

Maruti Suzuki India Limited JBM Industries Limited Mr. SK Arya, Chairman and Managing

Neel Metal Products limited Director

JBM Auto Limited Mrs . Neelam Arya spouse of Mr. S.K. Arya,

Chairman & MD

Mr. Nishant Arya son of Mr. S.K. Arya, Chairman & MD

NOTE 4:- Consumption of Raw Materials and components has been computed by adding purchase to the opening stock and deducting closing stock verifed physically by the management.

NOTE 5:- The Company is primarily engaged in the business of manufacturing of components for automobiles for Indian market which are governed by the same set of risk and returns. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17). Accordingly, segment information has not been disclosed.

NOTE 6:- Maruti Suzuki India Ltd. (MSIL) has sold vehicles to the vendors and / or the employee of the vendor under the Maruti Car scheme ”Hum Saath Saath”. The EMI of vehicle sold to the vendors/ vendors employees has been accounted/ routed through the company.

NOTE 7:- REtIREmENt bENEFIts

a the Company has calculated the various benefts provided to employees as under-

a) Provident Fund (Including Pension Scheme) b) Superannuation Fund

NOTE 8:- Previous year fgures have been regrouped, reworked, rearranged and reclassifed wherever considered necessary.

NOTE 9:- Derivative contracts entered into by the company and outstanding as on 31st March, 2013. For Hedging currency and interest Rate Related Risk:- Nominal amount of derivatives including forward contracts entered into by the company and outstanding as on 31st March, 2013 amount to Rs.13849.05 lacs (PY Rs.16115.39 lacs)

All derivative contracts entered into by the company are for hedging purposes only.

Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2013 amounts to Rs.3892.05 lacs (PY Rs.1623.60 lacs).

Gain/Loss provided for Rs.779.19 lacs (Net Gain) (PY Rs.1189.28 lacs (Net Gain)) in respect of outstanding derivative contracts at the Balance Sheet date by marking them to market.

NOTE 10:- Additional information pursuant to the provisions of general instructions for preparation of statement of proft and loss under revised Schedule VI to the Companies Act, 1956 is as under:-

a. Opening stock, Closing stock and sales

b. Consumption of Raw materials and Components

c. C.I.F. value of Imports

d. value of Imported and indigenous Raw materials, spares and Components Consumed

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Mar 31, 2011

Rs. in lacs 2010-11 2009-10

1. Contingent Liabilities not provided for

- Guarantees issued by Banks for letters of credit 561.36 99.45

- Central Excise (net of amount paid under protest) 3219.01 3262.16

- Service tax 12.11 10.24

- Income Tax Demand 862.09 -

- External development charges amounting to Rs. 152.82 lacs claimed by the Director Town & Country Planning, Government of Haryana, relating to Company's property situated at Mohammadpur, Jharsa, Sector-36, Gurgaon. The company has deposited 25% of the claim amounting to Rs. 38.20 lacs (P.Y.38.20 Lacs) during the financial year 2004-05.

The Supreme Court of India vide its order dated 6th October, 2010 allowed the company to make a fresh representation to Director Town and Country Planning, Haryana and if not satisfied with the order of Director TCP, is free to approach High Court. As directed by the Hon'ble Supreme Court, the Company made representation to TCP in the stipulated time and has also received the order. The company is not satisfied with the order of Town and Country Planning and approaching High Court shortly against the order. No provision for the balance amount is considered necessary by the company.

2. Consumption of Raw Materials and components has been computed by adding purchase to the opening stock and deducting closing stock verified Physically by the management

3. Deferred payment represents amount received from customers for dies to be amortised on components supplied to them, amount of excise duty Modvat/ Cenvat on dies adjustable as Modvat /Cenvat untilised against supplies to Customers and amount of vehicles sold by Maruti Suzuki India Ltd.(Secured by hypothecation of specific cars).

4. In some cases, the company has received intimation from micro & small enterprises under "The micro, small and medium Enterprises Development Act 2006". The company has certified that as a policy the payment to suppliers is made with in 30 days. The amount remaining unpaid as at 31st March 2011 was Rs. 382.92 Lacs (P.Y. Rs. 406.14 Lacs) No payments beyond the appointed date were noticed. No interest was paid or payable under the Act.

5. The Company is primarily engaged in the business of manufacturing of components for automobiles for Indian market which is governed by the same set of risk and returns. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17). Accordingly, segment information has not been disclosed.

6. Statement of Transactions with Related Parties

Associates Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence

Maruti Suzuki India Limited Jay Bharat Exhaust System Limited

JBM Industries Limited

Neel Metal Products Limited

JBM Auto Limited

Associates Key Management Personnel and their relatives

Maruti Suzuki India Limited Mr. S.K. Arya, Chairman & MD

Mrs. Neelam Arya, spouse of Mr. S.K. Arya, Chairman & MD

Mr. Nishant Arya, son of Mr. S.K. Arya, Chairman & MD

7. Maruti Suzuki India Ltd. (MSIL) has sold vehicles to the vendors and / or the employee of the vendor under the Maruti Car scheme "Hum Saath Saath". The EMI of vehicle sold to the vendors/ vendors employees has been accounted/ routed through the company.

8. Retirement Benefits

A The Company has calculated the various benefits provided to employees as under-

a. Provident Fund (Including Pension Scheme)

b. Superannuation Fund

C. Defined Benefit Plans

a. Contribution to Gratuity Funds - Employee's Gratuity Fund.

b. Leave Encashment/ Compensated Absence.

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

9. Derivative contracts entered into by the company and outstanding as on 31st March 2011. For Hedging currency and interest Rate Related Risk:-

Nominal amount of derivatives including forward contracts entered into by the company and outstanding as on 31.03.2011 amount to Rs. 4933.01 Lacs (P.Y. Rs. 914.20 Lacs)

All derivative contracts entered into by the company are for hedging purposes only.

Foreign currency exposure that are not hedged by derivative instruments as on 31.03.2011 amounts to Rs. 528.40 Lacs (P.Y. Rs. 1043.55 Lacs).

Loss provided for Rs. 84.16 Lacs (net) (P.Y Nil) in respect of outstanding derivative contracts at the Balance Sheet date by marking them to market.

10. Previous year figures have been regrouped, reworked, rearranged and reclassified wherever considered necessary.

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Mar 31, 2010

(Rupees in Lacs) 2010 2009

1. Contingent Liabilities not provided for

- Guarantees issued by Banks for letters 99.45 168.27 of credit - Central Excise (net of amount paid 3262.16 2221.19 under protest)

- Service Tax 10.24 -

- External development charges claimed by the Director, Town & 152.82 152.82 Country Planning, Government of Haryana, relating to Companys property situated at Mohammadpur, Jharsa, Sector-36, Gurgaon. The Company has fled a special leave petition with the Hon. Supreme Court of India against the demand which has been accepted by the Court subject to deposit of Rs. 38.20Lacs (P.Y. 38.20 Lacs) being 25% of the claim amount. The said amount has been deposited by the Company during the Financial Year 2004-05. No provision for the balance amount is considered necessary by the Company.

2. Deferred payment represents amount received from customers for dies to be amortised on components supplied to them, amount of excise duty Modvat/ Cenvat on dies Adjustable as Modvat /Cenvat untilised against supplies to Customers and amount of vehicles sold by Maruti Suzuki India Ltd.(Secured by hypothecation of specific cars)

3. In some cases, the company has received intimation from micro & small enterprises under “The micro, small and medium Enterprises Development Act 2006”. The company has certified that as a policy the payment to suppliers is made with in 30days. The amount remaining unpaid as at 31st March 2010 was Rs.406.16 Lacs (P.Y. Rs.632.60 Lacs) No payments beyond the appointed date were noticed. No interest was paid or payable under the act.

4. The Company is primarily engaged in the business of manufacturing of components for automobiles for Indian market , which is governed by the same set of risk and returns. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard on Segment Reporting (AS-17). Accordingly, segment information has not been disclosed.

5. Maruti Suzuki India Ltd. (MSIL) has sold vehicles to the vendors and / or the employee of the vendor under the Maruti Car scheme ”Hum Saath Saath”. The EMI of vehicle sold to the vendors/ vendors employees has been accounted/ routed through the company.

6. Retirement Benefits A The Company has calculated the various benefits provided to employees as under-

a) Provident Fund (Including Pension Scheme )

b) Superannuation Fund

C. Defned Benefit Plans

a) Contribution to Gratuity Funds - Employees Gratuity Fund.

b) Leave Encashment/ Compensated Absence.

In accordance with Accounting Standard 15 (revised 2005), the actuarial valuation carried out in respect of the aforesaid defined benefit plans is based on the following assumption.

iv) Reconciliation of Present value of Defined Benefit Obligation and Fair value of Assets

* Included in Salaries, Wages, Allowances and

Other Benefits under Employee Remuneration and

Benefits (Refer schedule 9)

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

6. Derivative contracts entered into by the company and outstanding as on 31st March 2010. For Hedging Currency and Interest Rate Related Risk:

Nominal amount of derivatives including forward contracts entered into by the company and outstanding as on 31.03.2010 amount to Rs. 914.20 Lacs (P.Y. Rs. 1981.36 Lacs)

- All derivative contracts entered into by the company are for hedging purposes only.

- Foreign currency exposure that are not hedged by derivative instruments as on 31.03.2010

- Amount to Rs. 1043.55Lacs (P.Y.Rs. 1943.89 Lacs)

7. Previous year figures have been regrouped, reworded, rearranged and reclassified wherever considered necessary.