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Notes to Accounts of Jay Bharat Maruti Ltd.

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.


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.


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)).


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.


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


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.


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.

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