Notes to Accounts of JK Tyre & Industries Ltd.
Mar 31, 2023
d. Rights and preferences attached to Equity Shares:
i. The Company has only one class of Equity Shares having face value of ''2 each and each shareholder is entitled to one vote per share.
ii. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
iii. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
(i) Rupee Term Loan of ''2.40 crores from a Bank and Foreign Currency Loan of ''17.62 crores (including ''6.63 crores due to forex reinstatement) from a Financial Institution aggregating to ''20.02 crores, secured by a first pari passu charge on movable and immovable assets at a Company''s Plant in Tamil Nadu, both present and future are repayable in 1 and 2 equal quarterly instalments respectively.
(ii) Rupee Term Loan of ''275.19 crores and ''34.97 crores from Banks and Foreign Currency Loan of ''130.10 crores (including ''29.35 crores due to forex reinstatement) from a Financial Institution aggregating to ''440.26 crores, secured by a first pari passu charge created on movable and immovable assets at a Company''s Plant in Tamil Nadu, both present and future and also secured by way of hypothecation on the specified movable assets at Company''s Plants in Madhya Pradesh and Karnataka are repayable in 42 quarterly instalments, 18 and 20 equal quarterly instalments respectively.
(iii) Rupee Term Loan of ''212.50 crores from a Bank, secured by a first pari passu charge on movable and immovable assets at a Company''s Plant in Tamil Nadu, both present and future is repayable in 42 quarterly instalments.
(iv) Foreign Currency Loan of ''26.43 crores (including ''6.08 crores due to forex reinstatement) from a Bank, secured by charge by way of hypothecation of specified assets at Company''s Plants in Rajasthan, Karnataka and Tamil Nadu, is repayable in 5 equal quarterly instalments.
(v) Foreign Currency Loan of ''101.01 crores (including ''20.76 crores due to forex reinstatement) from a Bank, secured by first pari passu charge on movable fixed assets at Company''s Plants at Rajasthan and Karnataka (excluding those specifically charged to other banks), both present and future. Loan of Tranche - I, ''33.83 crores and Tranche - II, ''67.18 crores are repayable in 5 and 8 quarterly instalments respectively.
(vi) Rupee Term Loan of ''87.09 crores from a Bank, secured by a first pari passu charge created on movable fixed assets at a Company''s Plant in Madhya Pradesh (excluding those specifically charged to other banks), both present and future is repayable in 22 equal quarterly instalments.
(vii) Rupee Term Loan of ''50 crores from a Bank, secured by a first pari passu charge to be created on movable fixed assets at a Company''s Plant in Karnataka (excluding those specifically charged to other banks), both present and future is repayable in 28 equal quarterly instalments commencing from April''2023.
(viii) Term Loans carrying first pari passu charge on the movable and immovable assets, are subject to prior charge of banks on stocks and book debts for working capital borrowings.
(ix) Rupee Term Loan of ''18.04 crores from a Bank, secured by a first pari passu charge on movable fixed assets at a Company''s Plant in Madhya Pradesh (excluding those specifically charged to other banks), both present and future is repayable in 8 equal quarterly instalments commencing from March''2025.
(x) Rupee Term Loan of ''10.37 crores from a Bank, secured by a first pari passu charge on stocks and book debts, of the Company, both present and future with second pari passu charge on movable and immovable assets of the Company''s Plants in Rajasthan, Madhya Pradesh, Karnataka and Tamil Nadu (excluding those specifically charged to other banks) is repayable in 5 equal monthly instalments.
(xi) Fixed Deposits of ''41.81 crores, ''27.65 crores and ''27.94 crores (aggregating ''97.40 crores) are due for repayment in 2023-24, 2024-25 and 2025-26 respectively.
(xii) The Company has issued and allotted 24,000 Compulsorily Convertible Debentures ("CCDs") during the year. On issuance of the CCDs, the fair value of the liability portion is determined using a market interest rate for an equivalent non-convertible debt, which is recorded as liability on amortised cost basis until its conversion into equity within 18 months from the date of allotment.
Estimated amounts of contracts remaining to be executed on capital account ''412.78 crores (Previous year: ''175.50 crores).
Note - 33
The Company imported certain equipment under Export Promotion Capital Goods (EPCG) Scheme at a concessional custom duty resulting in cumulative savings of ''32.89 crores (Previous year: ''23.59 crores), against which export obligation fulfilled till 31st March, 2023 ''5.63 crores (Previous year: Nil). Balance obligation yet to be fulfilled is ''27.26 crores (Previous year: ''23.59 crores).
Note - 34
Contingent liabilities in respect of claims not accepted and not provided for ''247.36 crores (Previous year: ''159.16 crores) pertaining to matters in appeal for Excise, Customs duty & GST ''176.92 crores, Service tax ''1.61 crores, Sales Tax matters ''3.35 crores, Income tax matters ''13.74 crores & others matters ''51.74 crores (Previous year: ''93.45 crores, ''1.13 crores, ''2.61 crores, ''13.74 crores & ''48.23 crores respectively).
Note - 35
c) There were no capital-work-in progress and intangible assets under development, whose completion was overdue or has exceeded its cost compared to its original plan.
Note - 37
The title deeds of all immovable properties are held in the name of the Company. Accordingly, there are no Immovable Properties which were not held in name of the Company as on 31.03.2023 and 31.03.2022.
The Competition Commission of India ("CCI") on 2nd February 2022 had released an Order dated 31st August 2018 for alleged contravention of provisions of the Competition Act, 2002 against the Company, certain other Tyre manufacturers and Automotive Tyre Manufacturers Association. CCI had imposed a penalty of ''309.95 crores on the Company. The Company had filed an Appeal before the Hon''ble National Company Law Appellate Tribunal against the said CCI Order. The NCLAT, through an order dated 1st December 2022, has disposed of the aforementioned appeal, after taking note of the multiple errors in the said CCI Order dated 31st August 2018, and remanded the matter back to the CCI, to re-examine the matter on merits and also to consider reviewing the penalty (if violation is established) in accordance with the provisions of the Competition Act. The Company understands that the CCI has filed an appeal against the NCLAT order dated 1st December 2022, however, no notice has been received by the Company till date. Based on legal advice, the Company continues to believe that it has a strong case, and accordingly, no provision has been made in the accounts. The Company strongly reiterates that there has been no wrongdoing on the part of the Company and reassures all the stakeholders that the Company has never indulged in or was part of any cartel or undertook any anti-competitive practices.
The Company has lease contracts for land, buildings and plant & equipment. These are recognised as Right of use assets with related lease liabilities in accordance with accounting policy of the Company as given in Note No. 1.3(iv).
a) The movements in Right of use assets is shown in Note No. 2, Property, Plant & Equipment.
f) The company has given certain equipment on sub-lease, from which rental income recognised during the year is ''0.77 crore (Previous year: ''0.77 crore).
Note - 39
Debts / Advances include ''72.54 crores (Previous year ''65.55 crores) for which legal and other necessary action has been taken.
Note - 40
In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.
Note - 41
The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at 31.03.2023: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) Interest Accrued and unpaid as at 31.03.2023: Nil (Previous year: Nil).
Note - 42
The Company has borrowings from Banks and Financial Institutions on the basis of securities of Current Assets. It has also filed the quarterly statements of current assets with all consortium banks and Financial Institutions during the year and these statements agree with the salient relevant items of books of account of the Company.
Note - 43
a) The Company has utilised the borrowings received from banks and financial institutions for the purpose for which it was taken during the year.
b) During the year, out of ''240 crores raised from issuance and allotment of 24,000 CCDs at Face Value of ''1,00,000 each on preferential allotment basis is parked in Cash Credit accounts maintained with consortium Bank of the Company.
(iv) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.
(v) The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
(vi) Employer''s Contribution to PF (trust) during the 12 months ended 31st March, 2023 of ''12.13 crores (Previous year: ''8.95 crores) has been included under the head Employee Benefits Expense. (Refer Note No. 29)
Note - 52 Other statutory Information
a. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
b. The Company has not been declared wilful defaulter by any Banks or any other Financial Institution at any time during the financial year.
c. The Company has not revalued its Property, Plant and Equipment (including Right of use assets) or intangible assets during the year.
d. The Company did not have any material transactions with companies struck-off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 during the financial year and previous year.
e. The Company has not traded or invested in Crypto Currency or Virtual Currency during the year.
f. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.
g. During the year, the Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
ii. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
h. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
ii. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
i. The Company has no such transactions which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in tax assessments under Income Tax Act, 1961.
j. The Company has not made any Loans or Advances to any promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person, that are:
i. repayable on demand; or
ii. without specifying any terms or period of repayment.
The following methods and assumptions were used to estimate the fair values:
1. Cash and short-term deposits, trade receivables, loans, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
2. Other non-current receivables are evaluated by the Company, based on parameters such as interest rates, individual creditworthiness of the counterparty etc. Based on this evaluation, allowances are considered to account for the expected losses of these receivables. As at end of each reporting year, the carrying amounts of such receivables, net of allowances (if any), are not materially different from their calculated fair values.
3. Fair value of Investments in quoted mutual funds and equity shares are based on quoted market price at the reporting date. The fair value of unquoted Investments in preference shares are estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The fair value of unquoted Investments in equity shares are estimated on net assets basis.
4. Fair value of borrowings from banks and other non-current financial liabilities, are estimated by discounting future cash flows using rates currently available for debt on similar terms and remaining maturities.
5. The fair values of derivatives are calculated using the RBI reference rate as on the reporting date as well as other variable parameters. Fair Value Hierarchy:
All financial assets and liabilities for which fair value is measured in the financial statements are categorised within the fair value hierarchy, described as follows: -
Level 1 - Quoted prices in active markets.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3 - Inputs that are not based on observable market data.
Forward Contracts for hedging Receivables: ?338.00 crores - US $ 41.11 Million (Previous year: ?394.20 crores - US $ 52 Million) and for hedging Payables: ?559.98 crores - US $ 68.11 Million (Previous year: ?252.74 crores - US $ 33.34 Million) are outstanding as at 31.03.2023. Currency Swap for Long-term rupee loans: ?90.12 crores -US $ 10.96 Million & ?50.57 crores -EUR 5.64 Million (Previous year: Nil).
Foreign currency exposure unhedged net payable is ?602.43 crores - US $73.27 Million (Previous year: ?841.11 crores - US $ 110.97 Million) as at 31.03.2023.
o Interest Rate Risk: Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The Company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiations with the lenders for ensuring the cost-effective method of financing.
The fair value of Investment property as per registered valuer report as at 31st March, 2023 is ''13.75 crores (Previous year: ''13.07 crores) after considering the rental income from current leases and other assumptions that market participants would use while pricing investment property under current market conditions.
Note - 57 Financial Risk Management Objectives and Policies
The Company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk.
⢠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 market prices. Market risk comprises mainly three types of risk: interest rate risk, currency risk and other price risk such as commodity price risk.
o Foreign Currency Risk: 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 has obtained foreign currency borrowings and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.
After taking cognizance of the natural hedge, the Company takes appropriate hedges to mitigate its risk resulting from fluctuations in foreign currency exchange rate(s).
Foreign Currency Sensitivity: The following table demonstrates the sensitivity to a reasonably possible change in USD with all other variables held constant. The impact on company''s profit before tax is due to changes in the foreign exchange rate is as follows:
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.
o Commodity Price Risk: The Company is affected by the price volatility of certain commodities. Its operating activities require the
purchase of raw material and manufacturing of tyres, and therefore, requires a continuous supply of certain raw materials such as natural rubber, synthetic rubber, carbon black, fabric, bead wire rubber chemicals etc. To mitigate the commodity price risk, the Company has an approved supplier base to get best competitive prices for the commodities and to assess the market to manage the cost without any compromise on quality.
⢠Credit Risk: Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
o Trade Receivables: Customer credit risk is managed based on company''s established policy, procedures and controls. The company
assesses the credit quality of the counterparties taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The Company has a well-defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. Impairment analysis is performed based on historical data at each reporting date on an individual basis. However, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.
The Company''s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders. In order to strengthen the capital base, the company may use appropriate means to enhance or reduce capital, as the case may be.
The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.
The amount required to be spent as Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013 for the year ended 31st March 2023 is ''5.09 crores (Previous Year: ''5.04 crores) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.
Note - 60
Figures less than ''50000 have been shown at actual in brackets.
Note - 61
Previous year figures have been reclassified/ regrouped wherever necessary.
Mar 31, 2022
(i) Rupee Term Loan of ''6.90 crores from a Bank, secured by a first pari passu charge on movable and immovable assets at a Company''s Plant in Karnataka, both present and future is repayable in 5 equal quarterly instalments.
(ii) Rupee Term Loan of ''23.89 crores, ''13.51 crores and ''35.84 crores from Banks and Foreign Currency Loan of ''48.75 crores (including ''15.77 crores due to forex reinstatement ) from a Financial Institution aggregating to ''121.99 crores, secured by a first pari passu charge on movable and immovable assets at a Company''s Plant in Tamil Nadu, both present and future are repayable in 4, 5, 6 and 6 equal quarterly instalments respectively.
(iii) Rupee Term Loan of ''290.25 crores,''34.33 crores, and ''42.97 crores from Banks and Foreign Currency Loan of ''143.94 crores (including ''23.46 crores due to forex reinstatement) from a Financial Institution aggregating to ''511.49 crores, secured by a first pari passu charge created / to be created on movable and immovable assets at a Company''s Plant in Tamil Nadu, both present and future and also secured by way of hypothecation on the specified movable assets at Company''s Plants in Madhya Pradesh and Karnataka are repayable in 46
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(iv) Rupee Term Loan of ''223.50 crores from a Bank, secured by a first pari passu charge on movable and immovable assets at a Company''s Plant in Tamil Nadu, both present and future is repayable in 46 quarterly instalments.
(v) Foreign Currency Loan of ''44.27 crores (including ''7.95 crores due to forex reinstatement) from a Bank, secured by charge by way of hypothecation of specified assets at Company''s Plants in Rajasthan, Karnataka and Tamil Nadu, is repayable in 9 equal quarterly instalments.
(vi) Foreign Currency Loan of ''138.19 crores (including ''19.02 crores due to forex reinstatement) from a Bank, secured by first pari passu charge on movable fixed assets at Company''s Plants at Rajasthan and Karnataka (excluding those specifically charged to other banks), both present and future. Loan of Tranche - I, ''51.33 crores and Tranche - II, ''86.86 crores are repayable in 9 and 12 quarterly instalments respectively.
(vii) Rupee Term Loan of ''88.33 crores from a Bank, secured by a first pari passu charge to be created on movable fixed assets at a Company''s Plant in Madhya Pradesh (excluding those specifically charged to other banks), both present and future is repayable in 24 equal quarterly instalments commencing from December 2022.
(viii) Term Loans carrying first pari passu charge on the movable and immovable assets, are subject to prior charge of banks on stocks and book debts for working capital borrowings.
(ix) Rupee Term Loan of ''20 crores from a Bank, secured by a first pari passu charge on movable fixed assets at a Company''s Plant in Madhya Pradesh, both present and future is repayable in June 2022.
(x) Rupee Term Loan of ''35.02 crores from a Bank, secured by a first pari passu charge on stocks and book debts, of the Company, both present and future with second pari passu charge on movable and immovable assets of the Company''s Plants in Rajasthan, Madhya Pradesh, Karnataka and Tamil Nadu (excluding those specifically charged to other banks) is repayable in 17 equal monthly instalments.
(xi) Fixed Deposits of ''40.36 crores, ''42.52 crores and ''24.32 crores (aggregating ''107.20 crores) are due for repayment in 2022-23, 2023-24 and 2024-25 respectively.
Estimated amounts of contracts remaining to be executed on capital account ''175.50 crores (Previous year: ''157.58 crores).
The Company imported certain equipment under Export Promotion Capital Goods (EPCG) Scheme at a concessional custom duty resulting in a saving of ''23.59 crores, against which export obligation will be fulfilled.
Contingent liabilities in respect of claims not accepted and not provided for ''159.16 crores (Previous year: ''152.84 crores) pertaining to matters in appeal for Excise & Customs duty ''93.45 crores, Service tax ''1.13 crores, Sales Tax matters ''2.61 crores, Income tax matters ''13.74 crores & others matters ''48.23 crores (Previous year: ''99.28 crores, ''0.76 crore, ''2.56 crores, ''4.97 crores & ''45.27 crores respectively).
The Competition Commission of India ("CCI") on 2nd February 2022 published an Order dated 31st August 2018 for alleged contravention of Section 3 of the Competition Act, 2002 against the Company and certain other domestic tyre manufacturing companies and had imposed a penalty of ''309.95 crores on the Company. The Company has filed an Appeal before the Hon''ble National Company Law Appellate Tribunal against the said CCI Order and the matter is currently pending. It is strongly reiterated that there has been no wrongdoing on the part of the Company and that the Company never indulged in or was part of any cartel or undertook any anti-competitive practices.
f) The company has given certain equipment on sub-lease, from which rental income recognised during the year is ''0.77 crore (Previous year: ''0.77 crore).
Debts / Advances include ''65.55 crores (Previous year ''59.60 crores) for which legal and other necessary action has been taken.
In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.
The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at 31.03.2022: Nil (Previous year: Nil), (ii) Payment made beyond the appointed
day during the year: Nil (Previous year: Nil) and (iii) Interest Accrued and unpaid as at 31.03.2022: Nil (Previous year: Nil).
The Company has borrowings from Banks and Financial Institutions on the basis of securities of Current Assets. It has also filed the quarterly statements of current assets with all consortium banks and Financial Institutions during the year and these statements agree with the salient relevant items of books of account of the Company.
The Company has utilised the borrowings received from banks and financial institutions for the purpose for which it was taken during the year.
Exceptional items include net impact of favorable foreign exchange rate fluctuation ''14.30 crores (Previous Year: 24.08 crores) and expenditure on VRS for the employees ''10.35 crores (Previous year: ''2.87 crores).
The Company has evaluated impact of COVID-19 pandemic on its business, performance and financials. The Company expects to recover the carrying amount of various assets and to maintain sufficient liquidity. The impact of subsequent developments, if any, occurring after approval of these financial statements will be recognized prospectively.
A) Steep rise in Raw material prices could not be passed on fully in the market resulting in lower cash generation. Further, due to COVID-19 relaxation given by the RBI, the loan repayments for FY 2020-21 were deferred. Accordingly, the same are not comparable with normal repayments due in FY 2021-22.
B) Return on Equity was adversely impacted due to unprecedented increase in Raw Material Prices during FY 2021-22 impacting profitability.
C) Due to unprecedented price increase, unit value of raw material have gone up by 28%, which impacted profitability. The trade payables were higher due to planned purchases of critical raw materials to ensure availability at all times.
D) During last year FY 2020-21, the production and sales were severely impacted due to onslaught of COVID 1.0 wave, which impacted profitability. Hence, the performance of FY 2021-22 is not comparable with previous Year. During FY 2021-22, the company continued to lay focus on increased throughput in terms of production and sales and achieve higher market share in different product categories. Accordingly, short term reliance was placed on borrowings to address the business needs.
E) The Company had taken various initiatives for drastic cost reduction in Travelling, Advertisement, Sales Promotion, etc for cost minimization as well as revenue maximization during challenging COVID- 19 times, which brought in substantial one time saving resulting into higher profitability. During FY 2021-22 due to higher level of business activity, the company continued to maintain strong foothold to command market share, even if, full impact of raw material price increase could not be passed on to the market, which impacted profitability. As a result, the Net Profit Ratio for FY 2021-22 was lower compared with FY 2020-21.
3. Fair value of Investments in quoted mutual funds and equity shares are based on quoted market price at the reporting date. The fair value of unquoted Investments in preference shares are estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The fair value of unquoted Investments in equity shares are estimated on net assets basis.
4. Fair value of borrowings from banks and other non-current financial liabilities, are estimated by discounting future cash flows using rates currently available for debt on similar terms and remaining maturities.
5. The fair values of derivatives are calculated using the RBI reference rate as on the reporting date as well as other variable parameters.
Fair Value Hierarchy:
All financial assets and liabilities for which fair value is measured in the financial statements are categorised within the fair value hierarchy,
described as follows: -
Level 1 - Quoted prices in active markets.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3 - Inputs that are not based on observable market data.
The following methods and assumptions were used to estimate the fair values:
1. Cash and short-term deposits, trade receivables, loans, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
2. Other non-current receivables are evaluated by the Company, based on parameters such as interest rates, individual creditworthiness of the counterparty etc. Based on this evaluation, allowances are considered to account for the expected losses of these receivables. As at end of each reporting year, the carrying amounts of such receivables, net of allowances (if any), are not materially different from their calculated fair values.
The fair value of Investment property as per registered valuer report as at 31st March, 2022 is ''13.07 crores (Previous year: ''12.41 crores) after considering the rental income from current leases and other assumptions that market participants would use while pricing investment property under current market conditions.
Note - 56 Financial Risk Management Objectives and Policies
The Company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk.
⢠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 market prices. Market risk comprises mainly three types of risk: interest rate risk, currency risk and other price risk such as commodity price risk.
⢠Foreign Currency Risk: 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 has obtained foreign currency borrowings and has foreign currency trade payables and receivables and is therefore, exposed to form exchange risk.
After taking cognisance of the natural hedge, the Company takes appropriate hedges to mitigate its risk resulting from fluctuations in foreign currency exchange rate(s).
⢠Trade Receivables: Customer credit risk is managed based on company''s established policy, procedures and controls. The company assesses the credit quality of the counterparties taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The Company has a well-defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. Impairment analysis is performed based on historical data at each reporting date on an individual basis. However, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.
Forward Contracts for hedging Receivables: US $ 52 million (Previous year: US $ 25 million) and for hedging Payables: US $ 33.34 million (Previous year: Nil) are outstanding as at 31.03.2022.
Foreign currency exposure unhedged net payable is ''841.11 crores - US $ 110.97 million (Previous year: ''543.77 crores - US $ 73.98 million) as at 31.03.2022.
⢠Interest Rate Risk: Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The Company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiations with the lenders for ensuring the cost-effective method of financing.
* Deposits with Bank: The deposits with banks constitute mostly the liquid investment of the company and are generally not exposed to credit risk.
⢠Liquidity Risk: Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.
⢠Commodity Price Risk: The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw material and manufacturing of tyres, and therefore, requires a continuous supply of certain raw materials such as natural rubber, synthetic rubber, carbon black, fabric, bead wire rubber chemicals etc. To mitigate the commodity price risk, the Company has an approved supplier base to get best competitive prices for the commodities and to assess the market to manage the cost without any compromise on quality.
i Credit Risk: Credit risk is the risk that counterparty might not honour its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
The Company''s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders. In order to strengthen the capital base, the company may use appropriate means to enhance or reduce capital, as the case may be.
The amount required to be spent as Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013 for the year ended 31st March 2022 is ''5.04 crores (Previous Year: ''2.89 crores) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.
Figures less than ''50000 have been shown at actual in brackets.
Previous year figures have been reclassified / regrouped wherever necessary.
Mar 31, 2018
NOTE - 32
Estimated amount of contracts remaining to be executed on capital account Rs,76.23 crores (Previous year: Rs,125.97 crores).
NOTE - 1
Contingent liabilities in respect of claims not accepted and not provided for Rs,85.12 crores (Previous year: Rs,50.12 crores) pertain to Excise & Customs duty matters in appeal Rs,8.80 crores, Service tax matters Rs,0.59 crore, Sales Tax matters in appeal Rs,30.57 crores, Income tax matters in appeal Rs,8.87 crores & other matters Rs,36.29 crores (Previous year: Rs,8.40 crores, Rs,0.55 crore, Rs,2.22 crores, Rs,8.87 crores & Rs,30.08 crores respectively).
NOTE - 2
Capital work in progress includes Machinery in stock / transit, construction / erection materials and the following pre-operative expenses pending allocation:
NOTE - 3
In respect of certain disallowances and additions made by the Income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.
NOTE - 4
The Company has taken certain specified Plant and Equipment on operating lease basis, which is cancellable at the option of lessee.
NOTE - 5
The Company has worked out reversal of Modvat Credit availed on exports under Value Based Advance Licence in earlier years and reversed the same in accounts. Pursuant to special scheme announced by the Government, the Company has also paid interest on such reversals. Further, the Excise department has issued certain basis for reversal of Modvat, which is disputed and has been contested by the Company in a Writ Petition before the Hon''ble Delhi High Court and directions have been issued to treat the reversal already made by the Company as provisional.
NOTE - 6
a. Forward Contracts for hedging Receivables: US $ 16 Million (Previous year: Nil) and for hedging Payables: Nil (Previous year: US $ 33.70 Million) are outstanding as at 31.03.2018.
b. Foreign currency exposure unhedged net payable is ''687.52 crores - US $ 105.70 Million (Previous year: ''885.19 crores - US $ 136.52 Million) as at 31.03.2018.
NOTE - 7
The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at 31.03.2018: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) Interest Accrued and unpaid as at 31.03.2018: Nil (Previous year: Nil).
NOTE - 8
Miscellaneous expenses include Nil (Previous year: Rs,0.25 crore) for political contribution.
NOTE - 9
Exceptional items include net gain on sale of certain assets Nil (Previous year: Rs,108.05 crores) and expenditure on VRS for the employees Rs,6.69 crores (Previous year: Rs,2.81 crores).
(iv) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.
(v) The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
(vi) Employer''s Contribution to PF (trust) during the 12 months ended 31st March, 2018 of Rs,1.82 crores (Previous year: Rs,1.62 crores) has been included under the head Employee Benefits Expense. (Refer Note No. 29)
(b) Defined Contribution Plans:
Employer''s Contribution to Provident and other Funds charged off during the 12 months ended 31st March, 2018 of Rs,25.31 crores (Previous year: Rs,24.65 crores) has been included under the head Employee Benefits Expense. (Refer Note No. 29)
NOTE - 10 RELATED PARTIES
a) Subsidiaries:
J. K. International Ltd.
J. K. Asia Pacific Ltd. (JKAPL)
J. K. Asia Pacific (S) Pte. Ltd. (JKAPPL - Subs. of JKAPL)
3DInnovations Pvt. Ltd. (3DIPL) (Formerly known as Natext Biosciences Pvt. Ltd.)
Cavendish Industries Ltd. (CIL) (w.e.f. 13th Apr, 2016)
Lankros Holdings Ltd. (LANKROS)
Sarvi Holdings Switzerland AG. (SARVI - Subs. of LANKROS)
JK Tornel S.A. de C.V. (JKTSA - Subs. of SARVI)
Comercializadora America Universal, S.A. de C.V*
Compania Hulera Tacuba, S.A. de C.V*
Compania Hulera Tornel, S.A. de C.V. (CHT)*
Compania Inmobiliaria Norida, S.A. de C.V.*
General de Inmuebles Industriales, S.A. de C.V.*
Gintor Administracion, S.A. de C.V*
Hules y Procesos Tornel, S.A. de C.V*
* Subsidiary of JKTSA
b) Associates:
Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI)
Valiant Pacific LLC. (VPL - Associate of JKAPPL)
Florence Investech Ltd. (FINVL) (ceased to be related w.e.f. 24th Mar, 2017)
Dwarkesh Energy Ltd. (DEL)
Western Tire Holdings, Inc. (WTHI - Associate of CHT) (w.e.f. 1st Oct, 2017)
Western Tires, Inc. (WTI - Subs. of WTHI - Associate of CHT) (w.e.f. 1st Oct, 2017)
c) Key Management Personnel (KMP):
(i) Dr. Raghupati Singhania Chairman & Managing Director
(ii) Shri Bharat Hari Singhania Managing Director
(iii) Shri Anshuman Singhania Whole Time Director
(iv) Shri Arun Kumar Bajoria Director & President - International Operations
(v) Smt. Sunanda Singhania Non-Executive Non- Independent Director
(vi) Shri Arvind Singh Mewar Independent Director
(vii) Shri Bakul Jain Independent Director
(viii) Shri Shreekant Somany Independent Director
(ix) Shri Vimal Bhandari Independent Director
(x) Shri Kalpataru Tripathy Independent Director
(xi) Dr. Wolfgang Holzbach Independent Director
(xii) Shri Ashok Kumar Kinra Chief Financial Officer
(xiii) Shri Pawan Kumar Rustagi Vice President (Legal) & Co. Secretary
d) Post-Employment Benefit Plan Entities:
JK Tyre & Industries Ltd. Employees Provident Fund Optional Scheme, Kolkata. (JKEPFK)
JK Tyre & Industries Ltd. Officers Superannuation Fund, Kolkata. (JKOSFK)
JK Tyre & Industries Ltd. Employees Gratuity Fund, Kolkata. (JKEGFK)
JK Tyre & Industries Ltd. EPF Trust, Vikrant Tyre Unit. (JKEPFV)
JK Tyre & Industries Ltd. Officer''s Superannuation Fund Trust (JKOSFV)
JK Tyre & Industries Ltd. Employees Gratuity Fund Trust (JKEGFV)
e) Other Related Party with which Company has transactions:
Bengal & Assam Company Ltd. (BACL) - Enterprise which holds more than 20% shares in the Company.
The following methods and assumptions were used to estimate the fair values:
1. Cash and short-term deposits, trade receivables, loans, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
2. Other non-current receivables are evaluated by the Company, based on parameters such as interest rates, individual creditworthiness of the counterparty etc. Based on this evaluation, allowances are considered to account for the expected losses of these receivables. As at end of each reporting year, the carrying amounts of such receivables, net of allowances (if any), are not materially different from their calculated fair values.
3. Fair value of Investments in quoted mutual funds and equity shares are based on quoted market price at the reporting date. The fair value of unquoted Investments in preference shares are estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The fair value of unquoted Investments in equity shares are estimated on net assets basis.
4. Fair value of borrowings from banks and other non-current financial liabilities, are estimated by discounting future cash flows using rates currently available for debt on similar terms and remaining maturities.
5. The fair values of derivatives are calculated using the RBI reference rate as on the reporting date as well as other variable parameters.
Fair Value Hierarchy
All financial assets and liabilities for which fair value is measured in the financial statements are categorised within the fair value hierarchy, described as follows:
Level 1 - Quoted prices in active markets.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.
Level 3 - Inputs that are not based on observable market data.
The following table presents the fair value measurement hierarchy of financial assets and liabilities, which have been measured, subsequent to initial recognition, at fair value as at 31st March, 2018 and 31st March 2017:
NOTE - 11
The fair value of Investment property as at 31st March, 2018 is Rs,12.41 crores (Previous year: Rs,12.41 crores) after considering the rental income from current leases and other assumptions that market participants would use while pricing investment property under current market conditions.
NOTE - 12 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES:
The Company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk.
O 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 market prices. Market risk comprises mainly three types of risk: interest rate risk, currency risk and other price risk such as commodity price risk.
- Foreign Currency Risk: 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 has obtained foreign currency borrowings and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.
After taking cognisance of the natural hedge, the Company takes appropriate hedges to mitigate its risk resulting from fluctuations in foreign currency exchange rate(s).
- Interest Rate Risk: Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The Company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiations with the lenders for ensuring the cost effective method of financing.
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.
- Commodity Price Risk: The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw material and manufacturing of tyres, and therefore, requires a continuous supply of certain raw materials such as natural rubber, synthetic rubber, carbon black, fabric, beadwire rubber chemicals etc. To mitigate the commodity price risk, the Company has an approved supplier base to get best competitive prices for the commodities and to assess the market to manage the cost without any compromise on quality.
O Credit Risk: Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
- Trade Receivables: Customer credit risk is managed based on company''s established policy, procedures and controls. The company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The Company has a well-defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. Impairment analysis is performed based on historical data at each reporting date on an individual basis. However a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.
- Deposits with Bank: The deposits with banks constitute mostly the liquid investment of the company and are generally not exposed to credit risk.
0 Liquidity Risk: Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
The table below summarises the maturity profile of company''s financial liabilities based on contractual undiscounted payments:
* Including working capital facility from consortium banks renewed every year.
NOTE - 13 CAPITAL MANAGEMENT
The Company''s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders. In order to strengthen the capital base, the company may use appropriate means to enhance or reduce capital, as the case may be.
The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.
NOTE - 14 STANDARDS ISSUED BUT NOT YET EFFECTIVE
Ind AS 115, ''Revenue from Contracts with Customers'' and relevant changes in other Accounting Standards as per notification issued by the Ministry of Corporate Affairs in 28th March, 2018 has been made applicable from Financial Year 2018-19 (i.e. 1st April, 2018 onwards) and will supersede Ind AS 18 and Ind AS 11. The Standard establishes a new five-step model that will apply to revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The Company has evaluated the requirements of Ind AS 115 and there is no material impact on revenue recognition method of the Company.
NOTE - 15
The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended 31st March 2018 is Rs,9.25 crore (31st March 2017: Rs,7.88 crore) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.
The Company has spent Rs,4.56 crore on Corporate Social Responsibility Projects / initiatives during the year (Previous year: Rs,4.35 crore).
NOTE - 16
Figures less than Rs,50000 have been shown at actual in brackets.
NOTE - 17
Previous year figures have been reclassified/ regrouped, wherever necessary.
Mar 31, 2017
1. Term Loan of Rs.12.86 crores from a Bank, secured by a first pari passu charge created on movable and immovable assets of company''s Plant in Madhya Pradesh, both present and future is repayable in 9 equal quarterly installments.
2. Term Loans aggregating Rs.19.37 crores from Banks are secured by a first pari passu charge created on movable and immovable assets at a company''s Plant in Karnataka, both present and future and also secured by way of hypothecation created / to be created on the specified movable assets at company''s Plants in Rajasthan, Madhya Pradesh and Karnataka. Term Loan from one bank amounting to Rs.16.04 crores is repayable in 5 equal quarterly installments and the last installment of Rs.3.33 crores from another bank is repayable during 2017-18.
3. Term Loans aggregating Rs.62.58 crores from Banks, secured by a first pari passu charge created on movable and immovable assets at a company''s Plant in Karnataka, both present and future are repayable in 24 equal quarterly installments.
4. Term Loans aggregating Rs.517.35 crores (Rs.350.59 crores from Banks and Foreign currency Loan from a Financial institution amounting to Rs.166.76 crores including H34.86 crores due to forex reinstatement), secured by a first pari passu charge created on movable and immovable assets at a company''s Plant in Tamil Nadu, both present and future are repayable in 24 equal quarterly installments.
5. Term Loans aggregating Rs.795.68 crores (Rs.244.26 crores from Banks / Financial institution, Foreign currency Loan from a Financial institution amounting to Rs.155.61 crores including Rs.5.91 crores due to forex reinstatement and Buyer''s credit of Rs.395.81 crores net of Rs.16.26 crores due to forex reinstatement availed from Banks, which will be substituted by Term Loans), secured by a first pari passu charge created on movable and immovable assets at a company''s Plant in Tamil Nadu, both present and future and also secured by way of hypothecation created on the specified movable assets at company''s Plants in Madhya Pradesh and Karnataka are repayable in 40 equal quarterly installments commencing from December 2017.
6. Foreign currency Loan from a Bank amounting to Rs.111.99 crores including Rs.6.23 crores due to forex reinstatement, secured by charge by way of hypothecation of specified assets at company''s Plants in Rajasthan, Karnataka and Tamil Nadu, is repayable in 28 equal quarterly installments.
7. Foreign currency Loan from a Bank amounting to Rs.226.94 crores net of Rs.2.17 crores due to forex reinstatement, secured by first pari passu charge on movable fixed assets at company''s Plants at Rajasthan and Karnataka (excluding those specifically charged to other banks), both present & future is repayable in 28 quarterly installments commencing from April 2017 Tranche - i Rs.97.26 crores [net of Rs.2.24 crores due to forex reinstatement] and from March 2018 Tranche - ii [Rs.129.68 crores including H0.07 crore due to forex reinstatement].
8. Term Loan of Rs.24.52 crores from a body corporate is repayable in 12 equal quarterly installments.
9. Term Loans carrying first pari passu charge on the movable and immovable assets, are subject to prior charge of banks on stocks and book debts for working capital borrowings.
10. The last installment of unsecured Deferred Sales Tax of Rs.25.68 crores is repayable during 2017-18.
11. Fixed Deposits of Rs.11.73 crores, H39.11 crores and Rs.39.78 crores (aggregating H90.62 crores) are due for repayment in 2017-18, 2018-19 and 2019-20 respectively.
Estimated amount of contracts remaining to be executed on capital account Rs.125.97 crores (Previous year: Rs.179.37 crores).
12. Contingent liabilities in respect of claims not accepted and not provided for Rs.50.12 crores (Previous year: Rs.50.34 crores) pertain to Excise & Customs duty matters in appeal Rs.8.40 crores, Service tax matters Rs.0.55 crore, Sales Tax matters in appeal Rs.2.22 crores, income tax matters in appeal Rs.8.87 crores & other matters Rs.30.08 crores (Previous year: Rs.8.41 crores, Rs.0.31 crore, Rs.2.19 crores, Rs.2.83 crores & Rs.36.60 crores respectively).
Debts / Advances include Rs.53.61 crores (Previous year: Rs.3.62 crores) for which legal and other necessary action has been taken. in the opinion of the Management, these debts are recoverable and the same have been classified as good.
13. in respect of certain disallowances and additions made by the income Tax Authorities, appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally determined.
14.The company has taken certain specified Property, Plant and Equipment on operating lease basis, which is cancellable at the option of lessee.
15. The company has worked out reversal of Modvat credit availed on exports under Value Based Advance License in earlier years and reversed the same in accounts. Pursuant to special scheme announced by the Government, the company has also paid interest on such reversals. Further, the Excise department has issued certain basis for reversal of Modvat, which is disputed and has been contested by the company in a Writ Petition before the Hon''ble Delhi High court and directions have been issued to treat the reversal already made by the company as provisional.
16. Forward contracts for hedging Receivables - Nil (Previous year: US $ 47 Million) and for hedging payables - US $ 33.70 Million (Previous year: US $ 38.50 Million) are outstanding as at 31.03.2017.
17. Foreign currency exposure unhedged net payable is Rs.885.19 crores - US $ 136.52 Million (Previous year: Rs.1054.83 crores - US $ 159.02 Million) as at 31.03.2017.
18. The details of amounts outstanding under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of information available with the company are as under:
19. Principal & interest amount due and remaining unpaid as at 31.03.2017: Nil (Previous year: Nil), (ii) Payment made beyond the appointed day during the year: Nil (Previous year: Nil) and (iii) interest Accrued and unpaid as at 31.03.2017: Nil (Previous year: Nil).
20. Miscellaneous expenses include Rs.0.25 crore (Previous Year: Nil) for political contribution.
Exceptional items include net impact of net gain on sale of certain assets Rs.108.05 crores (Previous Year: Rs.0.08 crore) and expenditure on VRS for the employees Rs.2.81 crores (Previous Year: Rs.12.86 crores).
The following methods and assumptions were used to estimate the fair values:
21. Cash and short-term deposits, trade receivables, loans, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
22. Other non-current receivables are evaluated by the Company, based on parameters such as interest rates, Individual creditworthiness of the counterparty etc. Based on this evaluation, allowances are considered to account for the expected losses of these receivables. As at end of each reporting year, the carrying amounts of such receivables, net of allowances (if any), are not materially different from their calculated fair values.
23. Fair value of investments in quoted mutual funds and equity shares are based on quoted market price at the reporting date. The fair value of unquoted investments in preference shares are estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The fair value of unquoted investments in equity shares are estimated on net assets basis.
24. Fair value of borrowings from banks and other non-current financial liabilities, are estimated by discounting future cash flows using rates currently available for debt on similar terms and remaining maturities.
25. The fair values of derivatives are calculated using the RBi reference rate as on the reporting date as well as other variable parameters.
Fair Value Hierarchy
All financial assets and liabilities for which fair value is measured in the financial statements are categorized within the fair value hierarchy, described as follows:
Level 1 - Quoted prices in active markets.
Level 2 - inputs other than quoted prices included within Level 1 that are observable, either directly or Indirectly.
Level 3 - inputs that are not based on observable market data.
The fair value of investment property as at 31st March, 2017 is Rs.12.41 crores (as at 31st March, 2016: Rs.11.86 crores, as at 1st April, 2015: Rs.5.00 crores) after considering the rental income from current leases and other assumptions that market participants would use while pricing investment property under current market conditions.
26. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The company''s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk.
© 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 market prices. Market risk comprises mainly three types of risk: interest rate risk, currency risk and other price risk such as commodity price risk.
27. Foreign Currency Risk: 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 has obtained foreign currency borrowings and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.
After taking cognizance of the natural hedge, the company takes appropriate hedges to mitigate its risk resulting from fluctuations in foreign currency exchange rate(s).
28. Interest Rate Risk: interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiations with the lenders for ensuring the cost effective method of financing.
29. Commodity Price Risk: The company is affected by the price volatility of certain commodities. its operating activities require the purchase of raw material and manufacturing of tyres, and therefore, requires a continuous supply of certain raw materials such as natural rubber, synthetic rubber, carbon black, fabric, bead wire rubber chemicals etc. To mitigate the commodity price risk, the company has an approved supplier base to get best competitive prices for the commodities and to assess the market to manage the cost without any compromise on quality.
30. Credit Risk: credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
31. Trade Receivables: customer credit risk is managed based on company''s established policy, procedures and controls. The company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The company has a well defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. impairment analysis is performed based on historical data at each reporting date on an Individual basis. However a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.
32. Deposits with Bank: The deposits with banks constitute mostly the liquid investment of the company and are generally not exposed to credit risk .
33. Liquidity Risk: Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
34. CAPITAL MANAGEMENT
The company''s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. capital includes issued capital, share premium and all other equity reserves attributable to equity holders. in order to strengthen the capital base, the company may use appropriate means to enhance or reduce capital, as the case may be.
The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.
35. RECONCILIATIONS
The following reconciliations provide a quantification of the effect of significant differences arising as a result of transition from Previous GAAP to Ind AS in accordance with Ind AS 101:
- Equity as at 1st April, 2015;
- Equity as at 31st March, 2016;
- Total comprehensive income for the year ended 31st March, 2016.
36. Under Ind AS, investment Properties are reclassified from Property, Plant and Equipment and presented separately.
37. Under Ind AS, investments are valued at ''Fair Value / Amortized Cost'', as the case may be, unlike under previous GAAP, where Noncurrent investments were measured at cost less provision for diminution, if such a decline was other than temporary and current investments were valued at lower of cost or market value.
38. Represents Deferred expenses, pursuant to valuation at fair value of investments in certain Preference shares, which will be debited to profit and loss as expense over the period of such investments.
39. As per Ind AS, borrowings are valued at amortized cost using effective interest rate method, unlike under previous GAAP, where such borrowing were stated at initial transaction value.
40. As per Ind AS, borrowing pertaining to deferred sales tax is stated at fair value, which was stated at initial transaction value under previous GAAP. The difference between fair value and initial transaction value has been recognized as Deferred Government Grant.
41. The additional Deferred Tax Liability / Asset has also been recognized due to different accounting treatment in respect of certain items as per Ind AS.
42. Under previous GAAP, Proposed Dividend was recognized as liability in the period to which it was related. Under Ind AS, Proposed Dividend is recognized as liability in the period in which it is approved by shareholders.
43. Under Ind AS, investment Properties are reclassified from Property, Plant and Equipment and presented separately.
44. Under Ind AS, investments are valued at ''Fair Value / Amortized cost'', as the case may be, unlike under previous GAAP, where Noncurrent investments were measured at cost less provision for diminution, if such a decline was other than temporary and current investments were valued at lower of cost or market value.
45. Represents Deferred expenses, pursuant to valuation at fair value of investments in certain Preference shares, which will be debited to profit and loss as expense over the period of such investments.
46. As per Ind AS, borrowings are valued at amortized cost using effective interest rate method, unlike under previous GAAP, where such borrowing were stated at initial transaction value.
47. As per Ind AS, borrowing pertaining to deferred sales tax is stated at fair value, which was stated at initial transaction value, under previous GAAP. The difference between fair value and initial transaction value has been recognized as Deferred Government Grant.
48. The additional Deferred Tax Liability / Asset has also been recognized due to different accounting treatment in respect of certain items as per Ind AS.
49. Under previous GAAP, Proposed Dividend was recognized as liability in the period to which it was related. Under Ind AS, Proposed Dividend is recognized as liability in the period in which it is approved by shareholders.
50. Under Ind AS, Revenue is recognized at the fair value of the consideration received or receivable. As a result, discounts are required to be reduced from sales. Therefore, a sum of Rs.54.89 crores has been reduced from sales with corresponding decrease in other expenses.
51. Under previous GAAP, actuarial gains and losses were recognized in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of re-measurement of the net defined benefit liability / asset, which is recognized in other comprehensive income. consequently, the tax effect of the same has also been recognized in other comprehensive income under Ind AS instead of the statement of profit and loss.
Mar 31, 2016
NOTE - 1
Estimated amount of contracts remaining to be executed on capital
account Rs.179.37 crores (Previous year: Rs.470.44 crores).
NOTE - 2
Contingent liabilities in respect of claims not accepted and not
provided for Rs.50.34 crores (Previous year: Rs.40.84 crores) pertain
to Excise & Customs duty matters in appeal Rs.8.41 crores, Service tax
matters Rs.0.31 crore, Sales Tax matters in appeal Rs.2.19 crores,
Income tax matters in appeal Rs.2.83 crores & other matters Rs.36.60
crores (Previous year: Rs.8.41 crores, Rs.0.04 crore, Rs.2.14 crores,
Rs.2.97 crores & Rs.27.28 crores respectively).
NOTE - 3
Bills discounted with Banks outstanding Nil (Previous year: Rs.8.06
crores).
NOTE - 4
Capital work in progress includes Machinery in stock / transit,
construction / erection materials, cost paid for land and the following
pre-operative expenses pending allocation:
NOTE - 5
Debts over six months / Advances include Rs.3.62 crores (Previous year:
Rs.3.92 crores) for which legal and other necessary action has been
taken. In the opinion of the Management, these debts are recoverable
and the same have been classified as good.
NOTE - 6
In respect of certain disallowances and additions made by the Income
Tax Authorities, appeals are pending before the Appellate Authorities
and adjustment, if any, will be made after the same are finally
determined.
NOTE - 7
The Company has taken certain specified Plant & Machinery on operating
lease basis, which is cancellable at the option of lessee.
NOTE - 8
The Company has worked out reversal of Modvat Credit availed on exports
under Value Based Advance Licence in earlier years and reversed the
same in accounts. Pursuant to special scheme announced by the
Government, the Company has also paid interest on such reversals.
Further, the Excise department has issued certain basis for reversal of
Modvat, which is disputed and has been contested by the Company in a
Writ Petition before the Hon''ble Delhi High Court and directions have
been issued to treat the reversal already made by the Company as
provisional.
NOTE - 9
a. Forward Contracts for hedging Receivables - US $ 47 Million
(Previous year: US $ 24 Million) and for hedging Payables - US $ 38.50
Million (Previous year: Nil) are outstanding as at 31.03.2016.
b. Foreign currency exposure unhedged net payable is Rs.1054.83 crores
- US $ 159.02 Million (Previous year: Rs.997.28 crores - US $ 159.34
Million) as at 31.03.2016.
NOTE - 10
The details of amounts outstanding under the Micro, Small and Medium
Enterprises Development Act, 2006 (MSMED Act) to the extent of
information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at
31.03.2016: Nil (Previous year: Nil), (ii) Payment made beyond the
appointed day during the year: Nil (Previous year: Nil) and (iii)
Interest Accrued and unpaid as at 31.03.2016: Nil (Previous year: Nil).
NOTE-11
The Company has not provided diminution in the value of certain long
term strategic investments, since in the opinion of the Board, such
diminution in their value is temporary in nature, considering the
inherent value, nature of investments, the investees'' assets and
expected future cash flow from such investments.
NOTE - 12
The Company has, pursuant to the approval granted by its Board of
Directors in their meeting held on September 12, 2015, completed the
acquisition of 64% shareholding in Cavendish Industries Limited (CIL)
on April 13, 2016 for an amount of Rs.448.05 crores. CIL has a tyre
manufacturing plant at Laksar, Uttarakhand, where it manufactures a
range of tyres, tubes and flaps. The remaining 36% shareholding in CIL
has been acquired by Associates / Group Companies on the same date.
This strategic acquisition further strengthens JK Tyre''s leadership
position in Truck / Bus Radial segment. Furthermore, JK Tyre gets entry
into the fast growing 2/3 wheeler segment.
NOTE - 13
Miscellaneous expenses include Nil (Previous year: Rs.0.75 crore) for
political purpose.
NOTE - 14
Exceptional items include net impact of unfavourable Foreign Exchange
Rate fluctuation Rs.1.41 crores (Previous Year: Rs.7.24 crores), net
gain on sale of certain assets Rs.0.08 crore (Previous Year: Rs.0.36
crore), and expenditure on VRS for the employees Rs.12.86 crores
(Previous Year: Rs.2.55 crores).
NOTE - 15 Related Parties
a) Subsidiaries:
J. K. International Ltd.
J. K. Asia Pacific Ltd.
J. K. Asia Pacific (S) Pte. Ltd. (JKAPPL - Subs. of J. K. Asia Pacific
Ltd.) Natext Biosciences Pvt. Ltd. (NBPL) (related w.e.f. 30th Jun,
2015) Lankros Holdings Ltd. (LANKROS)
Sarvi Holdings Switzerland AG. (SARVI - Subs. of Lankros Holdings Ltd.)
JK Tornel S.A. de C.V. (JKTSA - Subs. of Sarvi Holdings Switzerland
AG.) Comercializadora America Universal, S.A. de C.V*
Compania Hulera Tacuba, S.A. de C.V*
Compania Hulera Tornel, S.A. de C.V (CHT)*
Compania Inmobiliaria Norida, S.A. de C.V*
General de Inmuebles Industriales, S.A. de C.V*
Gintor Administracion, S.A. de C.V*
Hules y Procesos Tornel, S.A. de C.V*
* Subsidiary of JKTSA
b) Associates:
Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI)
Valiant Pacific LLC. (VPL)
Florence Investech Ltd. (FINVL)
Dwarkesh Energy Ltd. (DEL)
c) Key Management Personnel (KMP):
(i) Dr. Raghupati Singhania Chairman & Managing Director
(ii) Shri Bharat Hari Singhania Managing Director
(iii) Shri Vikrampati Singhania (ceased to be a director w.e.f. 21st
Jan, 2016) Dy. Managing Director
(iv) Shri Anshuman Singhania (director w.e.f. 16th Mar, 2016) Whole
Time Director
(v) Shri Swaroop Chand Sethi (ceased to be a director w.e.f. 15th May,
2015) Whole Time Director
(vi) Shri Arun Kumar Bajoria Director & President - International
Operations
(vii) Shri Ashok Kumar Kinra Chief Financial Officer
(viii) Shri Pawan Kumar Rustagi Vice President (Legal) & Co. Secretary
d) Enterprise overwhich KMP is able to exercise Significant Influence:
JK Lakshmi Cement Ltd. (JKLC)
J.K. Fenner (India) Ltd. (JKFIL) (ceased to be related w.e.f. 21st Jan,
2016)
Nav Bharat Vanijya Ltd. (NBVL)
e) Other Related Parties with which Company has transactions:
Bengal & Assam Company Ltd. (BACL) - Public company in which Directors
of the Company are directors and hold more than two percent of its
paid-up share capital
Pushpawati Singhania Research Institute for Liver, Renal & Digestive
Diseases (PSRI) - Private company in which Directors are Directors &
members
Niyojit Properties Pvt. Ltd. (NPPL) - Private company in which a
Director is member (ceased on 30th Mar, 2015 and subsequently became
related w.e.f. 16th Mar, 2016)
O.P Khaitan & Co. (OPKC) - Firm in which Director was a partner (since
deceased on 06th Dec, 2015)
Shardul Amarchand Mangaldas & Co. (SAMC) - Firm in which Director is a
partner (related w.e.f. 10th May, 2015)
NOTE - 16
Figures less than Rs.50000 have been shown at actual in bracket.
NOTE - 17
Previous year figures have been reclassified / regrouped / recast,
wherever necessary.
Mar 31, 2015
NOTE - 1
Estimated amount of contracts remaining to be executed on capital
account Rs.470.44 crores (Previous year: Rs.603.54 crores).
NOTE - 2
Contingent liabilities in respect of claims not accepted and not
provided for Rs.40.84 crores (Previous year: Rs.41.89 crores) pertain to
Excise & Customs duty matters in appeal Rs.8.41 crores, Service tax
matters Rs.0.04 crore, Sales Tax matters in appeal Rs.2.14 crores, Income
tax matters in appeal Rs.2.97 crores & other matters Rs.27.28 crores
(Previous year: Rs.8.60 crores, Rs.0.04 crore, Rs.3.40 crores, Rs.2.97 crores
&Rs.26.88 crores respectively).
NOTE - 3
Bills discounted with Banks outstanding Rs.8.06 crores (Previous year:
Rs.14.09 crores).
NOTE - 4
Excise Duty liability on account of valuation of Finished Goods is
disputed and is yet to be determined. Without prejudice to the
Company''s stand in this behalf, as per Government''s desire an adhoc
amount of Rs.5.45 crores was paid under protest in earlier years and
debited to ''Advances Recoverable'' and an equivalent amount was provided
in Profit and Loss Statement. On Writ Petition filed by the Company in
the Hon''ble Delhi High Court, the said Court directed the Excise
Authorities to determine the valuation of finished goods in accordance
with law and observations made in the order.
NOTE - 5
Debts over six months / Advances include Rs.3.92 crores (Previous year:
Rs.3.28 crores) for which legal and other necessary action has been
taken. In the opinion of the Management, these debts are recoverable
and the same have been classified as good.
NOTE - 6
In respect of certain disallowances and additions made by the Income
Tax Authorities, appeals are pending before the Appellate Authorities
and adjustment, if any, will be made after the same are finally
determined.
NOTE - 7
The Company has taken certain specified Plant & Machinery on operating
lease basis, which is cancellable at the option of lessee.
NOTE - 8
The Company has worked out reversal of Modvat Credit availed on exports
under Value Based Advance Licence in earlier years and reversed the
same in accounts. Pursuant to special scheme announced by the
Government, the Company has also paid interest on such reversals.
Further, the Excise department has issued certain basis for reversal of
Modvat, which is disputed and has been contested by the Company in a
Writ Petition before the Hon''ble Delhi High Court and directions have
been issued to treat the reversal already made by the Company as
provisional.
NOTE - 9
a. Forward Contracts for hedging Receivables - US $ 24 Million
(Previous year: Nil) and for hedging Payables - Nil (Previous year: US
$ 41.60 Million and Euro 0.79 Million) are outstanding as at
31.03.2015.
b. Foreign currency exposure unhedged net payable is Rs.997.28 crores -
US $ 159.34 Million (Previous year: Rs.158.18 crores - US $ 26.32
Million) as at 31.03.2015.
NOTE -10
The details of amounts outstanding under the Micro, Small and Medium
Enterprises Development Act, 2006 (MSMED Act) to the extent of
information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at
31.03.2015: Nil (Previous year: Nil), (ii) Payment made beyond the
appointed day during the year: Nil (Previous year: Nil) and (iii)
Interest Accrued and unpaid as at 31.03.2015: Nil (Previous year: Nil).
NOTE - 11
The Company has not provided diminution in the value of certain long
term strategic investments, since in the opinion of the Board, such
diminution in their value is temporary in nature, considering the
inherent value, nature of investments, the investees'' assets and
expected future cash flow from such investments.
NOTE - 12
Pursuant to adoption of Schedule II to the Companies Act, 2013, the
depreciation charge for the year is lower by Rs.31.72 crores
NOTE - 13
Miscellaneous expenses include contribution to Satya Electoral Trust
Rs.0.75 crore (Previous Year: Nil) for political purpose.
NOTE - 14
Exceptional items include net impact of unfavourable Foreign Exchange
Rate fluctuation Rs.7.24 crores (Previous Year: Rs.70.94 crores), net gain
on sale of certain assets Rs.0.36 crore (Previous Year: Rs.1.19 crores),
and expenditure on VRS for the employees Rs.2.55 crores (Previous Year:
Rs.6.08 crores).
NOTE - 15
The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules, 2006
are as given below:
NOTE - 16 Related Parties
a) Subsidiaries:
J. K. International Ltd.
J. K. Asia Pacific Ltd.
J. K. Asia Pacific (S) Pte. Ltd. (Subs. of J. K. Asia Pacific Ltd.)
Lankros Holdings Ltd.
Sarvi Holdings Switzerland AG. (Subs. of Lankros Holdings Ltd.)
JK Tornel S.A. de C.V. (JKTSA- Subs. of Sarvi Holdings Switzerland AG.)
Comercializadora América Universal, S.A. de C.V*
CompañÃa Hulera Tacuba, S.A. de C.V*
CompañÃa Hulera Tornel, S.A. de C.V (CHT)*
CompañÃa Inmobiliaria Norida, S.A. de C.V*
General de Inmuebles Industrials, S.A. de C.V*
Gintor Administración, S.A. de C.V*
Hules y Procesos Tornel, S.A. de C.V*
* Subsidiary of JKTSA
b) Associates:
Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI)
Valiant Pacific LLC. (VPL) Florence Investech Ltd. (FINVL)^ Dwarkesh
Energy Ltd. (DEL)^
d) Enterprise over which KMP is able to exercise Significant Influence:
JK Lakshmi Cement Ltd. (JKLC) J.K. Fenner (India) Ltd. (JKFIL) Nav
Bharat Vanijya Ltd. (NBVL)^
e) Other Related Parties with which Company has transactions:
Bengal & Assam Company Ltd. (BACL)^ - Public company in which Directors
of the company are directors and hold more than two percent of its
paid-up share capita
Pushpawati Singhania Research Institute for Liver, Renal & Digestive
Diseases (PSRI) - Private company in which Directors are Directors &
members
Niyojit Properties Pvt. Ltd. (NPPL)^ - Private company in which
Directors are members (ceased to be related w.e.f. 30.03.2015)
O.P. Khaitan & Co. (OPKC)^ - Firm in which Director is a partner
^ Related w.e.f. 01.04.2014 pursuant to Companies Act, 2013.
NOTE - 17
Figures less than Rs.50000 have been shown at actual in bracket.
NOTE - 18 Previous year figures have been reclassified / regrouped /
recast, wherever necessary.
Mar 31, 2014
Rights and preferences attached to Equity Shares:
a. The Company has only one class of Equity Shares having face value
of Rs. 10/- each and each shareholder is entitled to one vote per
share.
b. In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
c. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend.
During the year, the Company allotted 43,03,350 warrants on
preferential basis, pursuant to section 81 (1A) of the Companies Act,
1956 to the Promoter Group at a price determined in accordance with the
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
An amount of Rs. 12.37 crs. being 25% of the consideration has been
received. Each warrant is convertible into one Equity Share of the
Company on payment of balance 75% within a period of 18 months from the
date of allotment, failing which, the amount already received shall
stand forfeited.
The proceeds of the issue have been used for the purpose, for which it
was raised.
Notes:
1. Term Loan of Rs. 30 crs. from a Bank, secured by a first pari passu
charge created on movable and immovable assets of Company''s Plant in
Madhya Pradesh, both present and future is repayable in 21 equal
quarterly instalments.
2. Term Loans aggregating Rs. 97.87 crs. from Banks are secured by a
first pari passu charge created on movable and immovable assets at a
Company''s Plant in Karnataka, both present and future and also secured
by way of hypothecation created / to be created on the specified
movable assets at Company''s Plants in Rajasthan, Madhya Pradesh and
Karnataka. Term Loan from one bank amounting to Rs. 54.54 crs. is
repayable in 17 equal quarterly instalments and from another bank Rs.
43.33 crs. is repayable in 13 equal quarterly instalments.
3. Term Loans aggregating Rs. 93.87 crs. from Banks, secured by a
first pari passu charge created on movable and immovable assets at a
Company''s Plant in Karnataka, both present and future are repayable in
36 equal quarterly instalments commencing from 01.04.2014.
4. Term Loans aggregating Rs. 530 crs. from Banks and Foreign Currency
Loan from a Financial Institution amounting to Rs. 225.42 crs.
(including Rs. 33.07 crs. for foreign exchange fluctuation), secured by
a first pari passu charge created on movable and immovable assets at a
Company''s Plant in Tamilnadu, both present and future are repayable in
36 equal quarterly instalments commencing from 01.04.2014. The first
instalment of loan from the financial institution has already been
paid.
5. Foreign Currency Loans of Rs. 113.07 crs. (net of Rs. 1.39 crs.
foreign exchange fluctuation) from a Bank, secured by charge by way of
hypothecation of specified assets at Company''s Plants in Rajasthan,
Karnataka and Tamilnadu, is repayable in 32 equal quarterly instalments
commencing from February 2016.
6. Term Loan of Rs. 0.03 cr. from a body corporate, secured by
hypothecation of specified vehicle is repayable in 6 equated monthly
instalments.
7. Term Loan of Rs. 49.04 crs. from a body corporate to be secured by
way of hypothecation on the specified assets at a Company''s Plant in
Karnataka is repayable in 24 equal quarterly instalments.
8. Deferred Sales Tax Loan outstanding Rs. Nil from Madhya Pradesh
State Industrial Development Corporation Limited, was secured by first
available charge on movable and immovable assets (subject to charges
referred to in note 1 & 2 on movable and immovable assets of Company''s
Plant in Madhya Pradesh).
9. Loan of Rs. 50 crs. from a Bank, secured by a subservient charge on
current assets of the Company, is repayable on 31.03.2016.
10. Term Loans carrying first pari passu charge on the movable and
immovable assets, are subject to prior charge of banks on stocks and
book debts for working capital borrowings.
11. Unsecured Deferred Sales Tax Rs. 102.72 crs. is repayable in 4
equal annual instalments.
12. Fixed Deposits of Rs. 8.38 crs., Rs. 13.41 crs. and Rs. 12.27 crs.
(aggregating Rs. 34.06 crs.) are due for repayment in 2014-15, 2015-16
and 2016-17 respectively.
* Represents Working Capital borrowings secured by hypothecation of
stocks and book debts etc. of the Company, both present and future and
second charge created on movable and immovable assets of the Company''s
Plants in Rajasthan, Madhya Pradesh, Karnataka and Tamilnadu.
* Buildings include Rs. 2.05 crs. constructed on leased land and 32
shares held in co-operative housing societies,
# Being amortised over a period of 5 years,
* Includes capitalisation of foreign exchange fluctuation Rs. 22.22
crs. (Unamortised fluctuation as on 31.03.2014 : Rs. 32.40 crs.)
* Government Subsidy of Rs. 0.47 cr. is reduced from cost of Plant &
Equipments,
Factory & Service buildings and Plant and Equipments of Company''s Plant
at Jaykaygram were revalued as at 1st January 1985 & 1st April 1991.
On 1st April 1997 the revaluation of such assets was updated along with
similar assets of Banmore plant. The revaluation of said assets of
Jaykaygram and Banmore was further updated alongwith Factory Land and
Township building as at 1st April 2002 based on replacement cost by a
Valuer. The Gross Value includes revaluation of Rs. 545.21 crs.
(Previous year: Rs. 556.25 crs.)
# Under lien with Issuer.
* Pledged with bank for loans availed by certain foreign subsidiaries.
** Net of provision for diminution.
@ Pursuant to the merger of JK Sugar Ltd. with Dhampur Sugar Mills
Ltd., the company has received 18,01,817 no(s) of Cumulative Redeemable
Preference Shares of Dhampur Sugar Mills Limited against the Preference
Shares of JK Sugar Ltd.
$ Pursuant to the merger of JK Sugar Ltd. with Dhampur Sugar Mills
Ltd., the company has received 4,60,075 shares of Dhampur Sugar Mills
Ltd.
against 16,73,000 shares of JK Sugar Ltd. in the ratio of 275:1000.
A During the year, bonus shares received.
13. Estimated amount of contracts remaining to be executed on capital
account Rs. 603.54 crs. (Previous year: Rs. 46.53 crs.).
14. Contingent liabilities in respect of claims not accepted and not
provided for Rs. 41.89 crs. (Previous year: Rs. 30.71 crs.) pertain to
Excise & Customs duty matters in appeal Rs. 8.60 crs., Service tax
matters Rs. 0.04 cr., Sales Tax matters in appeal Rs. 3.40 crs., Income
tax matters in appeal Rs. 2.97 crs. & other matters Rs. 26.88 crs.
(Previous year: Rs. 4.00 crs., Rs. 0.04 cr., Rs. 3.64 crs., Rs. 3.78
crs. & Rs. 19.25 crs. respectively).
15. Bills discounted with Banks outstanding Rs. 14.09 crs. (Previous
year: Rs. 4.24 crs.).
16. Excise Duty liability on account of valuation of Finished Goods is
disputed and is yet to be determined. Without prejudice to the
Company''s stand in this behalf, as per Government''s desire an adhoc
amount of Rs. 5.45 crs. was paid under protest in earlier years and
debited to ''Advances Recoverable'' and an equivalent amount was provided
in Profit and Loss Statement. On Writ Petition filed by the Company in
the Hon''ble Delhi High Court, the said Court directed the Excise
Authorities to determine the valuation of finished goods in accordance
with law and observations made in the order.
17. Debts over six months / Advances include Rs. 3.28 crs. (Previous
year: Rs. 2.88 crs.) for which legal and other necessary action has
been taken. In the opinion of the Management, these debts are
recoverable and the same have been classified as good.
18. In respect of certain disallowances and additions made by the
Income Tax Authorities, appeals are pending before the Appellate
Authorities and adjustment, if any, will be made after the same are
finally determined.
19. The Company has taken certain specified Plant & Machinery on
operating lease basis, which is cancellable at the option of lessee.
20. The Company has worked out reversal of Modvat Credit availed on
exports under Value Based Advance Licence in earlier years and reversed
the same in accounts. Pursuant to special scheme announced by the
Government, the Company has also paid interest on such reversals.
Further, the Excise department has issued certain basis for reversal of
Modvat, which is disputed and has been contested by the Company in a
Writ Petition before the Hon''ble Delhi High Court and directions have
been issued to treat the reversal already made by the Company as
provisional.
21. a. Forward Contracts for hedging Payables - US $ 41.60 Million and
Euro 0.79 Million (Previous year: US $ 26.31 Million, Euro 0.31 Million
and GBP 0.69 Million) are outstanding as at 31.03.2014.
b. Foreign currency exposure unhedged net payable is Rs. 158.18 crs. -
US $ 26.32 Million (Previous year: Rs. 455.43 crs. - US $ 83.73
Million) as at 31.03.2014.
22. The details of amounts outstanding under the Micro, Small and
Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of
information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at
31.03.2014: Nil (Previous year: Nil), (ii) Payment made beyond the
appointed day during the year: Nil (Previous year: Nil) and (iii)
Interest Accrued and unpaid as at 31.03.2014: Nil (Previous year: Nil).
23. The Company has not provided diminution in the value of certain
long term strategic investments, since in the opinion of the Board,
such diminution in their value is temporary in nature, considering the
inherent value, nature of investments, the investees'' assets and
expected future cash flow from such investments.
24. Exceptional items include net impact of unfavourable Foreign
Exchange Rate fluctuation Rs. 70.94 crs. (Previous Year: Rs. 52.09
crs.), net gain on sale of certain assets Rs. 1.19 crs. (Previous Year:
Rs. 24.83 crs.), and expenditure on VRS for the employees Rs. 6.08 crs.
(Previous Year: Rs. 3.66 crs.).
(iii) The expected return on plan assets is determined considering
several applicable factors mainly the composition of the plan assets
held, assessed risks of assets management, historical results of return
on plan assets and the policy for plan assets management.
(iv) The estimates of future salary increase, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
(v) Contributions to PF (trust) during the 12 months ended 31st March,
2014 of Rs. 1.27 crs. (Previous Year: Rs. 1.07 crs.) has been included
under the head Employee Benefits Expense. (Refer Note 27)
(b) Defined Contribution Plans -
Employer''s Contributions to Provident and other Funds charged off
during the 12 months ended 31st March, 2014 of Rs. 19.62 crs. (Previous
Year: Rs. 19.23 crs.) has been included under the head Employee
Benefits Expense. (Refer Note 27)
II. Remuneration to Chairman & Managing Director Rs. 7.74 crs. (Rs.
3.48 crs.), Managing Director Rs. 4.53 crs. (Rs. 0.63 cr.), Dy.
Managing Director Rs. 4.60 crs. (Rs. 1.51 crs.), Whole time Director
Rs. 1.73 crs. (Rs. 1.35 crs.) and President & Director Rs. 3.16 crs.
(Rs. 2.32 crs.). (Previous year figures in brackets)
Received Rs. 0.38 cr. and Rs. 0.13 cr. against Share warrants allotted
to Chairman & Managing Director and Managing Director respectively.
25. Figures less than Rs. 50000 have been shown at actual in bracket.
26. Previous year figures have been reclassified / regrouped / recast,
wherever necessary.
Mar 31, 2013
1. Estimated amount of contracts remaining to be executed on capital
account Rs. 46.53 crs. (Previous year: Rs. 145.19 crs.).
2. Contingent liabilities in respect of claims not accepted and not
provided for Rs. 30.71 crs. (Previous year: Rs. 41.75 crs.) pertaining
to Excise duty matters in appeal Rs. 4.00 crs., Service tax matters Rs.
0.04 cr., Sales Tax matters in appeal Rs. 3.64 crs., Income tax matters
in appeal Rs. 3.78 crs. & other matters Rs. 19.25 crs. (Previous year:
Rs. 4.47 crs., Rs. 0.04 cr., Rs. 5.59 crs., Rs. 10.54 crs. & Rs. 21.11
crs. respectively).
3. Bills discounted with Banks outstanding Rs. 4.24 crs. (Previous
year: Rs. 12.53 crs.).
4. Excise Duty liability on account of valuation of Finished Goods is
disputed and is yet to be determined. Without prejudice to the
Company''s stand in this behalf, as per Government''s desire an adhoc
amount of Rs. 5.45 crs. was paid under protest in earlier years and
debited to ''Advances Recoverable'' and an equivalent amount was provided
in Profit and Loss Statement. On Writ Petition filed by the Company in
the Hon''ble Delhi High Court, the said Court directed the Excise
Authorities to determine the valuation of finished goods in accordance
with law and observations made in the order.
5. Capital work in progress includes Machinery in stock / transit,
construction / erection materials, cost paid for land and the following
pre-operative expenses pending allocation:
6. Debts over six months / Advances include Rs. 2,88 crs, (Previous
year: Rs. 2,98 crs,) for which legal and other necessary action has
been taken, In the opinion of the Management, these debts are
recoverable and the same have been classified as good,
7. In respect of certain disallowances and additions made by the
Income Tax Authorities, appeals are pending before the Appellate
Authorities and adjustment, if any, will be made after the same are
finally determined,
8. The Company has taken certain specified Plant & Machinery on
operating lease basis, which is cancellable at the option of lessee,
9. The Company has worked out reversal of Modvat Credit availed on
exports under Value Based Advance Licence in earlier years and reversed
the same in accounts, Pursuant to special scheme announced by the
Government, the Company has also paid interest on such reversals,
Further, the Excise department has issued certain basis for reversal of
Modvat, which is disputed and has been contested by the Company in a
Writ Petition before the Hon''ble Delhi High Court and directions have
been issued to treat the reversal already made by the Company as
provisional,
10. a, Forward Contracts for hedging Payables - Rs. 145,18 crs, - US $
26,31 Million, Rs. 2,23 crs, - Euro 0,31 Million and Rs. 6,16 crs, -
GBP 0,69 Million (Previous year: Rs. 7,39 crs, - US $ 1,40 Million, Rs.
19,28 crs, - Euro 2,78 Million and Rs. 1,30 crs, - GBP 0,15 Million)
and for hedging receivables - Nil (Previous year: Rs. 57,89 crs, - US
$ 12,00 Million) are outstanding as at 31,03,2013, b, Foreign currency
exposure unhedged net payable is Rs. 455,43 crs, - US $ 83,73 Million
(Previous year: Rs. 604,73 crs,- US $ 118,21 Million) as at 31,03,2013,
11. The details of amounts outstanding under the Micro, Small and
Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of
information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at
31,03,2013: Nil (Previous year: Nil), (ii) Payment made beyond the
appointed day during the year: Nil (Previous year: Nil) and (iii)
Interest Accrued and unpaid as at 31,03,2013: Nil (Previous year: Nil),
12. The Company has not provided diminution in the value of certain
long term strategic investments, since in the opinion of the Board,
such diminution in their value is temporary in nature, considering the
inherent value, nature of investments, the investees'' assets and
expected future cash flow from such investments,
13. Exceptional items include net impact of unfavourable Foreign
Exchange Rate fluctuation Rs. 52,09 crs, (Previous year: Rs. 63,17
crs,), net gain on sale of certain assets Rs. 24,83 crs, (Previous
year: Rs. 76,42 crs,), and expenditure on Voluntary Retirement Scheme
(VRS) for the employees Rs. 3,66 crs, (Previous year: Rs. 11,58 crs,),
14. Related Parties:
a) Subsidiaries:
J. K. International Ltd.
J. K. Asia Pacific Ltd.
J. K. Asia Pacific (S) Pte. Ltd. (Subs. of J. K. Asia Pacific Ltd.)
Lankros Holdings Ltd.
Sarvi Holdings Switzerland AG. (Subs. of Lankros Holdings Ltd.)
JK Tornel S.A.de C.V (JKTSA- Subs. of Sarvi Holdings Switzerland AG.)
Comercializadora America Universal, S.A. de C.V*
Companfa Hulera Tacuba, S.A. de C.V. *
Companfa Hulera Tornel, S.A. de C.V. (CHT)*
Companfa Inmobiliaria Norida, S.A. de C.V. *
General de Inmuebles Industriales, S.A. de C.V. *
Gintor Administracion, S.A. de C.V. *
Hules y Procesos Tornel, S.A. de C.V. *
* Subsidiary of JKTSA
b) Associates:
Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI)
Valiant Pacific LLC. (VPL)
c) Key Management Personnel (KMP):
Dr. Raghupati Singhania Chairman & Managing Director
Shri Bharat Hari Singhania Managing Director
Shri Vikrampati Singhania Dy. Managing Director
Shri Swaroop Chand Sethi Whole Time Director
Shri Arun Kumar Bajoria President & Director
d) Enterprise over which KMP is able to exercise Significant Influence:
JK Lakshmi Cement Ltd. (JKLC)
Fenner (India) Ltd. (FIL)
15. Figures less than Rs. 50000 have been shown at actual in bracket.
16. Previous year figures have been reclassified / regrouped / recast,
wherever necessary.
Mar 31, 2012
Note - 1
Notes:
1 (a) 27353 Zero Coupon Non-Convertible Debentures (ZCNCDs) of Rs.
10,000 each issued to a Bank, outstanding as on 31.03.2012 - Nil, were
secured by first pari passu charge created on the specified property of
Gujarat and movable and immovable properties of Company's Plants in
Karnataka, both present and future. These debentures were redeemable at
premium based on a YTM of 13.75% p.a upto 30.06.2005 and a YTM of 9%
p.a. w.e.f. 01.07.2005 with quarterly rests in five instalments at the
end of 3 to 7 years from the respective dates of payment of allotment
money / call money.
(b) 9057 Zero Coupon Non-Convertible Debentures (ZCNCDs) of Rs. 10,000
each issued to Financial Institutions, outstanding as on 31.03.2012 -
Nil, were secured by first pari passu charge created on the specified
property of Gujarat and movable and immovable properties of Company's
Plants in Karnataka, both present and future. 2656 ZCNCDs were
redeemable at premium based on a YTM of 13.75% p.a. and 6401 ZCNCDs
were redeemable at premium based on a YTM of 13.75% p.a. reduced to a
YTM of 9% p.a. w.e.f. various dates during January, 2006 to March, 2006
with quarterly rests in five instalments at the end of 3 to 7 years
from the respective dates of payment of allotment money / call money.
2. Term Loan of Rs. 40 crs. from a Bank, secured by a first pari passu
charge created on movable and immovable properties of Company's Plant
in Madhya Pradesh, both present and future is repayable in 28 equal
quarterly instalments commencing from 01.08.2012.
3. Term Loans from Banks outstanding as at 31.03.2012 - Nil, were
secured by a first pari passu charge created on movable and immovable
properties of the Company's Plants in Rajasthan, Madhya Pradesh and
Karnataka, both present and future.
4. Term Loans aggregating Rs. 146.99 crs. from Banks are secured by a
first pari passu charge created on movable and immovable properties at
a Company's Plant in Karnataka, both present and future and also
secured by way of hypothecation created / to be created on the
specified movable assets at Company's Plants in Rajasthan, Madhya
Pradesh and Karnataka. Term Loan from one bank amounting to Rs. 76.99
crs. is repayable in 24 equal quarterly instalments and from another
bank Rs. 70 crs. is repayable in 21 equal quarterly instalments.
5. Term Loans aggregating Rs. 60 crs. from Banks, secured by a first
pari passu charge created / to be created on movable and immovable
properties at a Company's Plant in Karnataka, both present and future
are repayable in 36 equal quarterly instalments commencing from
01.04.2014.
6. Term Loans aggregating Rs. 434.33 crs. from Banks and Foreign
Currency Loan from a Financial Institution amounting to Rs. 94.29 crs.
(including Rs. 4.29 crs. for foreign exchange fluctuation), secured by
a first pari passu charge created on movable and immovable properties
at a Company's Plant in Tamilnadu, both present and future are
repayable in 36 equal quarterly instalments commencing from 01.04.2014.
7. Term Loan of Rs. 5.25 crs. from a Bank, secured by an exclusive
charge by way of hypothecation of specified assets at Company's Plants
in Rajasthan, Madhya Pradesh and Karnataka is repayable in 3 equal
quarterly instalments.
8. Term Loan of Rs. 0.05 cr. from a Bank and Rs. 0.13 cr. from a body
corporate, secured by hypothecation of specified vehicles are repayable
in 8 and 30 equated monthly instalments respectively.
9. Term Loan of Rs. 65.38 crs. from a body corporate to be secured by
way of hypothecation on the specified assets at a Company's Plant in
Karnataka is repayable in 32 equal quarterly instalments.
10. Term Loans carrying first pari passu charge on the movable and
immovable properties, are subject to prior charge of banks on stocks
and book debts for working capital borrowings.
11. (a) Deferred Sales Tax aggregating Rs. 17.73 crs. from Madhya
Pradesh State Industrial Development Corporation Limited, secured
by first available charge on movable and immovable properties
(created subject to charges referred to in note 2, 3, 4 & 7
on movable and immovable properties of Company's Plant in Madhya
Pradesh) is repayable as Rs. 12.21 crs. in April 2012 and Rs. 5.52 crs.
in April 2013.
(b) Deferred Sales Tax Loan aggregating Rs. Nil from Government of
Karnataka subordinated to loans from Financial Institutions, is secured
by a second charge on immovable properties of the Company's Plant in
Karnataka.
12. Unsecured Deferred Sales Tax Rs. 121.51 crs. is repayable in 5
equal annual instalments commencing from January 2013.
13. Fixed Deposits of Rs. 20.25 crs., Rs. 14.86 crs. and Rs. 7.55 crs.
(aggregating Rs. 42.66 crs.) are due for repayment in 2012-2013,
2013-2014 and 2014-2015 respectively.
14. Unsecured loan from a bank amounting to Rs. 50 crs. is repayable
during January 2014.
Note - 2
Factory & Service buildings and Plant and Equipments of Company's Plant
at Jaykaygram were revalued as at 1st January 1985 & 1st April 1991.
On 1st April 1997 the revaluation of such assets was updated along with
similar assets of Banmore plant. The revaluation of said assets of
Jaykaygram and Banmore was further updated alongwith Factory Land and
Township building as at 1st April 2002 based on replacement cost by a
Valuer. The Gross Value includes cumulative surplus of Rs. 567.43 crs.
as at 31.03.2012 (Previous year: Rs. 667.23 crs.) arising on
revaluation.
3. Estimated amount of contracts remaining to be executed on capital
account Rs. 145.19 crs. (Previous year: Rs. 415.59 crs.).
4. Contingent liabilities in respect of claims not accepted and not
provided for Rs. 41.75 crs. (Previous year: Rs. 37.64 crs.) pertaining
to Excise duty matters in appeal Rs.. 4.47 crs., Service tax matters
Rs. 0.04 cr., Sales Tax matters in appeal Rs. 5.59 crs., Income tax
matters in appeal Rs. 10.54 crs. & other matters Rs. 21.11 crs.
(Previous year: Rs. 4.45 crs., Rs. 1.49 crs., Rs. 3.40 crs., Rs. 6.76
crs. & Rs. 21.54 crs. respectively).
5. Bills discounted with Banks outstanding Rs. 12.53 crs. (Previous
year: Rs. 13.65 crs.).
6. Excise Duty liability on account of valuation of Finished Goods is
disputed and is yet to be determined. Without prejudice to the
Company's stand in this behalf, as per Government's desire an adhoc
amount of Rs. 5.45 crs. was paid under protest in earlier years and
debited to 'Advances Recoverable' and an equivalent amount was provided
in Profit and Loss Account. On Writ Petition filed by the Company in
the Hon'ble Delhi High Court, the said Court directed the Excise
Authorities to determine the valuation of finished goods in accordance
with law and observations made in the order.
7. Debts over six months / Advances include Rs. 2.98 crs. (Previous
year: Rs. 3.40 crs.) for which legal and other necessary action has
been taken. In the opinion of the Management, these debts are
recoverable and the same have been classified as good.
8. In respect of certain disallowances and additions made by the
Income Tax Authorities, appeals are pending before the Appellate
Authorities and adjustment, if any, will be made after the same are
finally determined.
9. The Company has taken certain specified Plant & Machinery on
operating lease basis, which is cancellable at the option of lessee.
10. The Company has worked out reversal of Modvat Credit availed on
exports under Value Based Advance Licence in earlier years and reversed
the same in accounts. Pursuant to special scheme announced by the
Government, the Company has also paid interest on such reversals.
Further, the Excise department has issued certain basis for reversal of
Modvat, which is disputed and has been contested by the Company in a
Writ Petition before the Hon'ble Delhi High Court and directions have
been issued to treat the reversal already made by the Company as
provisional.
11. a. Forward Contracts for hedging Payables à Rs. 7.39 crs. - US $
1.40 Million, Rs. 19.28 crs. Ã Euro 2.78 Million and Rs. 1.30 crs. Ã
GBP 0.15 Million (Previous year Rs. 207.71 crs. - US $ 44.74 Million,
Rs. 152.17 crs. Ã Euro 24.25 Million and Rs. 9.30 crs. Ã GBP 1.26
Million) and for hedging receivables - Rs. 57.89 crs. - US $ 12.00
Million (Previous year: Nil). are outstanding as at 31.03.2012.
b. Foreign currency exposure unhedged net payable is Rs. 604.73 crs. Ã
US $ 118.21 Million (Previous year: Rs. 94.42 crs. Ã US $ 21.15
Million) as at 31.03.2012.
12. The details of amounts outstanding under the Micro, Small and
Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of
information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at
31.03.2012: Nil (Previous year: Nil), (ii) Payment made beyond the
appointed day during the year: Nil (Previous year: Nil) and (iii)
Interest Accrued and unpaid as at 31.03.2012: Nil (Previous year: Nil).
13. The Company has not provided diminution in the value of certain
long term strategic investments, since in the opinion of the Board,
such diminution in their value is temporary in nature, considering the
inherent value, nature of investments, the investees' assets and
expected future cash flow from such investments.
14. Exceptional items include net impact of unfavourable Foreign
Exchange Rate fluctuation Rs.. 63.17 crs (Previous Year: Rs. 12.84
crs.), net gain on sale of certain assets Rs. 76.42 crs. (Previous
Year: Nil), and expenditure on Voluntary Retirement Scheme (VRS) for
the employees Rs. 11.58 crs. (Previous Year: Rs. 0.63 cr.).
15. Exchange differences arising on Long term foreign currency
borrowings related to acquisition of depreciable fixed assets, which
hitherto was charged to Profit & Loss Account, is now being adjusted to
cost of such assets. Accordingly, a sum of Rs. 4.29 crs. is added to
cost of fixed assets during the year.
16. The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules, 2006
are as given below:
(a) Defined Benefit Plan -
(ii) The expected return on plan assets is determined considering
several applicable factors mainly the composition of the plan assets
held, assessed risks of assets management, historical results of return
on plan assets and the policy for plan assets management.
(iii) The estimates of future salary increase, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
(iv) Contributions to PF (trust) during the 12 months ended 31st March,
2012 of Rs. 0.93 cr. (Previous Year: Rs. 0.89 cr.) has been included
under the head Employee Benefit Expenses. (Refer Note 25)
Pending the issuance of the Guidance Note from the Institute of
Actuaries of India, the Company's actuary has expressed his inability
to reliably measure the provident fund liability.
(b) Defined Contribution Plans -
Employer's Contributions to Provident and other Funds charged off
during the 12 months ended 31st March, 2012 of Rs. 20.54 crs. (Previous
Year: Rs. 18.98 crs.) has been included under the head Employee Benefit
Expenses. (Refer Note 25).
17. Related Parties:
a) Subsidiaries:
J. K. International Ltd.
J. K. Asia Pacific Ltd
J. K. Asia Pacific (S) Pte. Ltd. (Subs. of J. K. Asia Pacific Ltd.)
Lankros Holdings Ltd.
Sarvi Holdings Switzerland AG. (Subs. of Lankros Holdings Ltd.)
JK Tornel S.A.de C.V. (JKTSA - Subs. of Sarvi Holdings Switzerland AG.)
Comercializadora América Universal, S.A. de C.V.*
Companies Hulera Tacuba, S.A. de C.V. *
Companies Hulera Tornel, S.A. de C.V. (CHT)*
Companies Inmobiliaria Norida, S.A. de C.V. *
General de Inmuebles Industriales, S.A. de C.V. *
Gintor Administración, S.A. de C.V. *
Hules y Procesos Tornel, S.A. de C.V. *
* Subsidiary of JKTSA
b) Associates:
Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI)
Valiant Pacific LLC. (VPL)
c) Key Management Personnel (KMP):
Dr. Raghupati Singhania Vice Chairman & Managing Director
Shri Bharat Hari Singhania Managing Director
Shri Vikrampati Singhania Dy. Managing Director
Shri Swaroop Chand Sethi Whole Time Director
Shri Arun Kumar Bajoria President & Director
d) Enterprise over which KMP is able to exercise Significant Influence:
JK Lakshmi Cement Ltd. (JKLC)
Fenner India Ltd. (FIL)
18. Figures less than Rs. 50000 have been shown at actual in bracket.
19. During the year ended 31st March 2012, the revised Schedule VI
notified under the Companies Act 1956, has become applicable to the
Company. Thus previous year figures has been reclassified / recasted
suitably. The adoption of revised Schedule VI does not impact
recognition and measurement principles followed for preparation of
financial statements except for presentation and disclosures, wherever
required.
Mar 31, 2011
1. Estimated amount of contracts remaining to be executed on capital
account Rs. 415.59 crs. (Previous year: Rs. 164.49 crs.).
2. Contingent liabilities in respect of claims not accepted and not
provided for Rs. 37.64 crs. (Previous year: Rs. 35.64 crs.) pertaining to
Excise duty matters in appeal Rs. 4.45 crs., Service tax matters Rs. 1.49
crs., Sales Tax matters in appeal Rs. 3.40 crs., Income tax matters in
appeal Rs. 6.76 crs. & other matters Rs. 21.54 crs. (Previous year: Rs. 4.39
crs., Rs. 1.30 crs., Rs. 2.36 crs., Rs. 6.76 crs. & Rs. 20.83 crs.
respectively).
3. Bills discounted with banks outstanding Rs. 13.86 crs. (Previous
year: Rs. 15.40 crs.).
4. Excise Duty liability on account of valuation of finished goods is
disputed and is yet to be determined. Without prejudice to the
Companys stand in this behalf, as per Governments desire an adhoc
amount of Rs. 5.45 crs. was paid under protest in earlier years and
debited to ÃAdvances Recoverable and an equivalent amount was provided
in Profit and Loss Account. On Writ Petition filed by the Company in
the Honble Delhi High Court, the said Court directed the Excise
Authorities to determine the valuation of finished goods in accordance
with law and observations made in the order.
5. The Company has given guarantee to a bank in respect of loan
outstanding as at 31.03.2011 of Nil (Previous year: Rs. 0.45 cr.) in
respect of a body corporate against counter indemnity.
6. Factory & Service Buildings and Plant and Machinery of Companys
Plant at Jaykaygram were revalued as at 1st January, 1985 & 1st April,
1991. On 1st April, 1997 the revaluation of such assets was updated
along with similar assets of Banmore plant. The revaluation of said
assets of Jaykaygram and Banmore was further updated alongwith Factory
Land and Township Building as at 1st April, 2002 based on replacement
cost by a Valuer. The Gross Block includes cumulative surplus of Rs.
667.23 crs. as at 31.03.2011 (Previous year: Rs. 667.78 crs.) arising on
revaluation.
8. a) Debts over six months and Advances are net of provisions made
for Doubtful Debts Rs. 3.23 crs. and Advances
Nil (Previous year: Rs. 3.03 crs. and Rs. 0.32 cr. respectively).
b) Debts over six months / Advances include Rs. 3.40 crs. (Previous year:
Rs. 3.66 crs.) for which legal and other necessary action has been taken.
In the opinion of the Management, these debts are recoverable and the
same have been classified as good.
9. In respect of certain disallowances and additions made by the
Income Tax Authorities, appeals are pending before the Appellate
Authorities and adjustment, if any, will be made after the same are
finally determined.
10. Raw materials consumed has been determined after adjusting Rs. 11.81
crs. (Previous year: Rs. 26.83 crs.) accounted for on accrual basis in
respect of import entitlements against exports made under Duty
Exemption Scheme.
11. The Company has worked out reversal of Modvat Credit availed on
exports under Value Based Advance Licence in earlier years and reversed
the same in accounts. Pursuant to special scheme announced by the
Government, the Company has also paid interest on such reversals.
Further, the Excise department has issued certain basis for reversal of
Modvat, which is disputed and has been contested by the Company in a
Writ Petition before the Honble Delhi High Court and directions have
been issued to treat the reversal already made by the Company as
provisional.
12. a) Exchange difference (net) amounting Rs. 12.84 crs. (Previous
year: Rs. 5.83 crs. - credited) has been debited in respective heads
of account in Profit and Loss account.
b) Forward Contracts for hedging Payables - Rs. 207.71 crs. - US $ 44.74
Million, Rs. 152.17 crs. - Euro 24.25 Million and Rs. 9.30 crs. - GBP 1.26
Million (Previous year: Rs. 76.29 crs. - US $ 16.40 Million, Rs. 0.90 cr. -
Yen 17.16 Million, Rs. 74.19 crs. - Euro 11.03 Million and Rs. 9.87 crs. -
GBP 1.29 Million) are outstanding as at 31.03.2011.
c) Foreign currency exposure unhedged net payable is Rs. 94.42 crs. - US
$ 21.15 Million (Previous year: Rs. 104.65 crs. - US $ 23.18 Million) as
at 31.03.2011.
13. The details of amounts outstanding under the Micro, Small and
Medium Enterprises Development Act, 2006 (MSMED Act) to the extent of
information available with the Company are as under:
(i) Principal & Interest amount due and remaining unpaid as at
31.03.2011: Nil (Previous year: Nil),
(ii) Payment made beyond the appointed day during
the year: Nil (Previous year: Nil) and (iii) Interest Accrued and
unpaid as at 31.03.2011: Nil (Previous year: Nil).
14. The Company has not provided diminution in the value of certain
unquoted long term strategic investments, since in the opinion of the
Board, such diminution in their value is temporary in nature,
considering the inherent value, nature of investments, the investees
assets and expected future cash flow from such investments.
15. Investor Education and Protection Fund includes Rs. 0.50 cr. for
unclaimed dividend (Previous year: Rs. 0.40 cr.), Rs. 1.64 crs. for
unclaimed fixed deposits (Previous year: Rs. 1.63 crs.), and Nil for
unclaimed amount on debentures (Previous year: Rs. 0.01 cr.), which shall
be deposited on respective due dates.
(ii) The expected return on plan assets is determined considering
several applicable factors mainly the composition of the plan assets
held, assessed risks of assets management, historical results of return
on plan assets and the policy for plan assets management.
(iii) The estimates of future salary increase, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
(iv) Contributions to PF (trust) during the 12 months ended 31st March,
2011 of Rs. 0.89 cr. (Previous year:
Rs. 0.88 cr.) has been included under the head Staff Cost. (Refer
Schedule 11)
Pending the issuance of the Guidance Note from the Institute of
Actuaries of India, the Companys
actuary has expressed his inability to reliably measure the provident
fund liability. (b) Defined - Contribution Plans:
Employers Contributions to Provident and other Funds charged off
during the 12 months ended 31st March, 2011 of Rs. 18.98 crs. (Previous
year: Rs. 16.46 crs.) has been included under the head Staff Cost. (Refer
Schedule 11).
16. Figures less than Rs. 50000 have been shown at actual in bracket.
17. Figures for the previous year have been regrouped / rearranged /
recast, wherever necessary.
Mar 31, 2010
1. The proceeds of the Rights Issue have been fully utilised for the
objects stated in the Letter of Offer dated July 18, 2008.
2. Estimated amount of contracts remaining to be executed on capital
account Rs. 164.49 crs. (Previous year: Rs. 51.65 crs.).
3. Contingent liabilities in respect of claims not accepted and not
provided for Rs. 35.64 crs. (Previous year: Rs. 34.86 crs.) pertaining
to Excise duty matters in appeal Rs. 4.39 crs., Service tax matters Rs.
1.30 crs., Sales tax matters in appeal Rs. 2.36 crs., Income tax
matters in appeal Rs. 6.76 crs. & other matters Rs. 20.83 crs.
(Previous year: Rs. 2.63 crs,, Rs. 2.01 crs., Rs. 1.76 crs., Rs. 6.99
crs. & Rs. 21.47 crs. respectively).
4. Bills discounted with Banks outstanding Rs. 15.40 crs. (Previous
year: Rs. 30.90 crs.).
5. Excise Duty liability on account of valuation of Finished Goods is
disputed and is yet to be determined. Without prejudice to the
Companys stand in this behalf, as per Governments desire an adhoc
amount of Rs. 5.45 crs. was paid under protest in earlier years and
debited to Advances Recoverable and an equivalent amount was provided
in Profit and Loss Account. On Writ Petition filed by the Company in
the Honble Delhi High Court, the said Court directed the Excise
Authorities to determine the valuation of finished goods in accordance
with law and observations made in the order.
6. The Company has given guarantee to a bank in respect of loan
outstanding as at 31.03.2010 of Rs. 0.45 cr, (Previous year: Rs. 2.29
crs.) in respect of a body corporate against counter indemnity.
7. Miscetaneous experolufe to fre exlerrt ncrt written off iepieserris
Comperisoliori paid uriaei VRS Rs. Nl {Previous year. Rs. 5.21 crs.)
VRS expenses to the extent not written off upto 31.03.2009 and also for
the current year have been charged to Profit & Loss Account during the
year, This has resulted in an additional charge of Rs. 4.50 crs. to the
Profit & Loss Account,
8. Factory & Service buildings and Plant and Machinery of Companys
Plant at Jaykaygram were revalued as at 1st January, 1985 & 1 st April,
1991. On 1 st April, 1997 the revaluation of such assets was updated
along with similar assets of Banmore plant. The revaluation of said
assets of Jaykaygram and Banmore was further updated alongwith Factory
Land and Township building as at 1 st April, 2002 based on replacement
cost by a Valuer. The Gross Block as at 31,03.2010 as well as Previous
year include cumulative surplus of Rs. 667.78 crs. arising on
revaluation.
9. Capital work in progress includes machinery in stock / transit,
construction / erection materials, advances for construction and
machinery, expenditure on ERP implementation and also includes the
following pre-operative expenses pending allocation:
10. a) Debts over six months and Advances are net of Provisions made
for Doubtful Debts Rs. 3.03 crs. and Advances Rs. 0.32 cr. (Previous
year: Rs. 3.13 crs. and Rs. 0.32 cr. respectively). b) Debts over six
months / Advances include Rs. 3.66 crs. (Previous year: Rs. 4.22 crs.)
for which legal and other necessary action has been taken. In the
opinion of the Management, these debts are recoverable and the same
have been classified as good.
11. In respect of certain disallowances and additions made by the
Income Tax Authorities, appeals are pending before the Appellate
Authorities and adjustment, if any, will be made after the same are
finally determined.
12. Raw materials consumed has been determined after adjusting Rs.
26.83 crs. (Previous year: Rs. 40.81 crs.) accounted for on accrual
basis in respect of import entitlements against exports made under Duty
Exemption Scheme.
13. The Company has worked out reversal of Modvat Credit availed on
exports under Value Based Advance Licence in earlier years and reversed
the same in accounts. Pursuant to special scheme announced by the
Government, the Company has also paid interest on such reversals.
Further, the Excise department has issued certain basis for reversal of
Modvat, which is disputed and has been contested by the Company in a
Writ Petition before the Honble Delhi High Court and directions have
been issued to treat the reversal already made by the Company as
provisional.
14. a) Exchange difference (net) amounting Rs. 5.83 crs. (Previous
year: Rs. 31.32 crs. - debited) has been credited in respective heads
of account in Profit and Loss account.
b) Forward Contracts for hedging Payables - Rs. 76.29 crs. - US $ 16.40
Million, Rs. 0.90 cr. -Yen 17.16 Million, Rs. 74.19 crs. - Euro 11.03
Million and Rs. 9.87 crs. - GBP 1.29 Million (Previous year: Rs. 8.54
crs. - US $ 1.75 Million and Rs. 15.39 crs. - Yen 292.46 Million) are
outstanding as at 31.03.2010.
c) Foreign currency exposure unhedged net payable is Rs. 104.65 crs. -
US $ 23.18 Million (Previous year: Rs. 51.13 crs. - US$ 10.04 Million)
as at 31.03.2010.
15. The details of amounts outstanding under the Micro, Small and
Medium Enterprises Development Act, 2006 (MSMED Act) to the extent
information available with the Company are as under: (i) Principal &
Interest amount due and remaining unpaid as at 31.03.2010: Nil
(Previous year: Nil), (ii) Payment made beyond the appointed day during
the year: Nil (Previous year: Nil) and (iii) Interest accrued and
unpaid as at 31.03.2010: Nil (Previous year: Nil).
16. The Company has not provided diminution in the value of certain
unquoted long term strategic investments, since in the opinion of the
Board, such diminution in their value is temporary in nature,
considering the inherent value, nature of investments, the investees
assets and expected future cash flow from such investments.
17. Research and Development expenses amounting to Rs. 16.39 crs.
(Previous year: Rs. 18.21 crs.) have been included in respective
revenue accounts.
18. Investor Education and Protection Fund includes Rs. 0.40 cr. for
unclaimed dividend (Previous year: Rs. 0.43 cr.), Rs, 1.63 crs. for
unclaimed fixed deposits (Previous year: Rs. 1.38 crs.), and Rs. 0.01
cr. for unclaimed amount on debentures (Previous year: Rs. 0.08 cr,),
which shall be deposited on respective due dates.
19. The disclosures required under Accounting Standard (AS-15)
"Employee Benefits" notified in the Companies (Accounting Standards)
Rules, 2006 are as given below:
(ii) The expected return on plan assets is determined considering
several applicable factors mainly the composition of the plan assets
held, assessed risks of assets management, historical results of return
on plan assets and the policy for plan assets management.
(iii) The estimates of future salary increase, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
(iv) Contributions to PF (trust) during the 12 months ended 31st March,
2010 of Rs. 0.88 cr, (Previous year: Rs. 3.45 crs.) has been included
under the head Staff Cost. (Refer Schedule 11)
Pending the issuance of the Guidance Note from the Institute of
Actuaries of India, the Companys actuary has expressed his inability
to reliably measure the provident fund liability.
(b) Defined Contribution Plans:
Employers Contributions to Provident and other Funds charged off
during the 12 months ended 31st March, 2010 of Rs. 16.46 crs. (Previous
year: Rs. 19.66 crs.) has been included under the head Staff Cost.
(Refer Schedule 11)
20. Related Parties:
a) Subsidiaries:
J, K. International Ltd.
J. K. Asia Pacific Ltd.
J. K. Asia Pacific (S) Pte. Ltd. (Subs, of J. K. Asia Pacific Ltd.)
Lankros Holdings Ltd.
Sarvi Holdings Switzerland AG. (Subs, of Lankros Holdings Ltd.)
Sunrise Hold Co. S.A. De C.V. (Subs, of Sarvi Holdings Switzerland AG.)
Empresas Tornel, S.A. De C.V. (ETSA - Subs, of Sunrise Hold Co. S.A. De
C.V. )
Comercializadora America Universal, S.A. De C.V. (Subs, of ETSA)
Compahia Hulera Tacuba, S.A. De C.V. (Subs, of ETSA)
Compahia Hulera Tornel, S.A. De C.V. (CHT - Subs, of ETSA)
Compahia Inmobiliaria Norida, S.A. De C.V. (Subs, of ETSA)
General de Inmuebles Industrials, S.A. De C.V. (Subs, of ETSA)
Gintor Administracion, S.A. De C.V. (Subs, of ETSA)
Hules y Procesos Tornel, S.A. De C.V. (Subs, of ETSA)
b) Associates:
Hari Shankar Singhania Elastomer and Tyre Research Institute (HASETRI)
Valiant Pacific LLC. (VPL)
c) Key Management Personnel (KMP):
Dr. Raghupati Singhania Vice Chairman & Managing Director
Shri Bharat Hari Singhania Managing Director
Shri Vikrampati Singhania Dy. Managing Director
Shri Swaroop Chand Sethi Whole Time Director
Shri Arun Kumar Bajoria President & Director (w.e.f. 20th January,
2010)
d) Enterprise over which KMP is able to exercise Significant Influence:
JK Lakshmi Cement Ltd. (JKLC)
21. The figures for the current year April, 2009 - March, 2010 (12
months) are not comparable with the figures for the previous period
October, 2007 - March, 2009 (18 months).
22. Figures less than Rs. 50000 have been shown at actual in bracket.
23. Figures for the previous year have been regrouped / rearranged /
recast, wherever necessary
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