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Notes to Accounts of JMT Auto Ltd.

Mar 31, 2018

1. Company Overview

JMT Auto Limited incorporated as Public Limited Company is into the business of manufacturing of Auto Components. The core competency of the Company is into manufacturing of Gear and Transmission parts. The Manufacturing facilities are located in Jamshedpur, Jharkhand and Dharwad, Karnataka. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

Company has its Registered Office at 3, Local Shopping Centre, Pamposh Enclave, G.K.-1, New Delhi

Note : 2.1 Rights, preferences and restrictions attached to shares

The company has one class of equity shares having a par value of Rs. 1 per share. Each shareholder is eligible for one vote per share held. The dividend, if 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. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Note : All long term loans are secured by first pari passu charge over entire fixed assets of the Company both present and future along with second pari passu charge on entire current assets of the Company.

Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 — Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

The financial instruments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosure are required):

Note : 3 Financial risk Management objectives and policies

The Company’s principal financial liablities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to support its operations. The Company’s financial assets include investment, loans, trade and other receivables, and cash & cash equivalents that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk, Considering on-going CIRP process, quantum of these risks are not ascertainable.

The company is exposed to market risk, credit risk and liquidity risk, The Company’s senior management overseas the management of these risks. The Company’s senior management is supported by a financial risk committee that advises on financial risks and the appropriate financial risk goverance framework for the company. This financial risk committee provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedure and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each risk, which are summarised as below:

(A) 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 three types of risk: Interest rate risk and currency risk. Financial instruments affected by market risk include loans and borrowings, deposits and payables/ receivables in foreign currencies.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligations with floating interset rates. The Company is carrying its borrowings primarily at variable rate. The Company expects the variable rate to decline, accordingly the company is currently carrying its loans at avriable interest rates.

Interest Rate Sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interset rates on that portion of loans and borrowings affected. With all other variable held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

b) Foreign currency risks

Foreign risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure in foreign currency is in Trade payable and receivable denominated in foreign currency. The Company is not restricting its exposure of risk in change in exchange rates.

Natural Hedging - We are availing PCFC limit as a sub limit to our CC limits wherein on the basis of our export POs we get our INR loan converted into USD loan under the same overall credit limit. On the other hand we have USD receivable against our exports. Thus both these acts as a natural hedge wherein our dollar collection covers for our dollar loan repayment.We try to keep our PCFC loan and Export receivable at even level in order to have full coverage.

Foreign currency sensitivity

The following table demonstrate the sensitivity to a reasonably possible change in foreign currency exchange rates. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities.

(B) Credit risk

Credit risk is the risk that counterparty will not meet 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) and from its financing activites, including loans to related parties, deposits with banks and financial institutions and other financial instruments.

Credit risk management

The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of ‘financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based ‘on the assumptions, inputs and factors specific to the class of financial assets.

(i) Low credit risk on reporting date

(ii) Moderate credit risk

(iii) High credit risk

Cash & Cash Equivalents and Bank Deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Trade Receivables

The company closely monitors the credit-worthiness of debtors through internal system that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts.

(C) Liquidity risk

The Company monitors its risk of a shortage of funds by estimating the future cash flows. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and bank loans. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturity within 12 months can be rolled over with existing lenders. The Company had access to the following undrawn borrowing facilities at the end of the reporting periods.


Mar 31, 2014

1 Contingent Liabilities

As at 31.03.2014 As at 31.03.2013

Contingent Liabilities not provided for

– Claims made against the Company but not acknowledged as debts

1) Jharkhand State Electricity Board towards fuel surcharge and delayed payment surcharge 16.85 16.85

2) In respect of bills discounted with Bank 100.00 97.18

2.1 Interest on Term Loan is net of interest income received/accrued on account of derivative contract in the nature of Principal Only Swap(POS) quarter and year ended 31st March, 2014 amounting to Rs 12.46 and Rs 62.29 lakhs respectively (quarter and year ended 31st March, 2013: Rs. 12.80 lakhs and Rs 59.28 lakhs ).

2.2 Interest on Term Loan is net of interest capitalized to fixed assets during the year ended 31st March, 2014 amounting to Rs 8.00 Lakhs (31st March, 2013 : Nil)

2.1 Employee Benefits

(a) Post Employment Defined Contribution Plans

During the year an amount of Rs. 95.92 lakhs (Previous Year Rs. 59.22 Lakhs) has been recognized as expenditure towards Defined Contribution Plans of the Company.

(b) Post Employment Defined Benefit Plans

Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund, managed by the Life Insurance Corporation of India (LIC) makes payment to vested employees at retirement, death, incapacitation or termination of employment of an amount equivalent to the respective employee''s eligible salary for fifteen days for each year of completed service subject to a maximum limit as laid down in the Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note A(ix) of Schedule U, based on upon which, the Company makes contributions to the Gratuity Fund.

The following Table sets forth the particulars in respect of the aforesaid Gratuity Fund of the Company for the year ended 31st March 2014:

** Experience adjustments have been given only for three years as the actuarial valuation has been done for the first time in financial year 2010.

Notes:

(i) The estimate of future salary increases taken in to account, inflation, seniority, promotion and other relevant factors.

(ii) The expected return of plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company''s policy for Plan asset management and other relevant factors.

3. Details on derivative instruments and unhedged foreign currency exposures:

The following derivative positions are open as at 31st March, 2014. These transactions have been undertaken to act as economic hedges for the Company''s exposures to risks in foreign exchange fluctuation in respect to the Buyers Credit Loan taken by the Company denominated in Foreign Currency and may be designated as hedging instruments.

Forward exchange contracts (being derivative instruments), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required at the settlement date of certain payables /Loans.

3.2 The Company has entered into derivative contract during the year in the form of INR/USD Principle only Swap (POS). The POS has been entered to convert the INR Loan Liability into USD Liability with the objective of reducing the overall interest cost on the INR Fixed Interest Rate Loan portfolio and hence may not qualify to be designated as hedging instruments.

Details of the aforesiad outstanding derivative contract as at 31st March 14

The Mark-to-Market (MTM) losses on such derivative contract as per the valuation report from banker as on 31st March, 2014 stood at Rs 262.75 lakhs (Year ended 31st March, 2013 Rs. 109.75 lakhs)

4 Segment Reporting

A) Segments have been identified in line with the Accounting Standards (AS) 17 on Segment Reporting prescribed under the Companies Act, 1956, taking into account the nature of products and services, the different risks and returns, the organizational structure and the internal financial reporting system. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organizational structure and its system of internal financial reporting, geograhical segment based in the location of the customers has been identified as the primary segment. The Company has following two geograhical segments:

i) Domestic

ii) Export

B) The Company is a manufacturer of Automotive Components parts and managed organisationally as a single unit hence there are no reportable business segment

5. Related Party Transactions

Related party disclosures as required under Accounting standard - 18 on "Related Party Disclosure" notified by the Central Government under the Companies (Accounting Standards) Rules, 2006

Name of the related party Relationship

Precision Automotive Co. (P) Ltd

RSD Finance Limited Associate Companies

S R P Oils (P) Ltd

Prestige Equipment''s (P) Ltd

Bach Ltd Investing Parties

Mr. Rajeev Singh Dugal Managing Director Key Managerial Personnel

Mr. Jasjit Singh Dugal Executive Director

6. Employees Stock Option Plans:

The Company implemented "JMT Auto Limited Employee Stock Option Plan 2012" during the year as approved by the Shareholders of the Company and the Remuneration /Copensation Committee of the Board of Directors.Details of the options granted during the year under the plans are as under:

The options are granted at an exercise price, which is in accordance with the relevant SEBI guidelines in force, at the time of such grants. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of Rs 10 each. The options have vesting periods as stated above in accordance with the vesting schedule as per the said plans with an exercise period of two years from the respective grant dates.

The Company has followed the intrinsic value based method of accounting for stock options granted after April 1, 2005 based on Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. Had the compensation cost for the Company''s stock based compensation plans been determined in the manner consistent with the fair value approach as described in the said Guidance Note, the Company''s net income would be lower by Rs 49.92 Lakhs (previous year Rs 49.92 lakhs) and earnings per share as reported would be lower as indicated below:

7.Previous year''s / period figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1. Corporate Information

JMT Auto Limited incorporated as Public Limited Company is into the business of manufacturing of Auto Components. The core compentancy of the Company is into manufacturing of Gear and Transmission parts. The Manufacturing facilities are located in Jamshedpur, Jharkhand and Dharwad, Karnataka. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.

2 Contingent Liabilities

As at 31.03.2013 As at 31.03.2012

Contingent Liabilities not provided for

- Claims made against the Company but not acknowledged as debts

1) Jharkhand State Electricity Board towards fuel surcharge and delayed payment surcharge 16.85 16.85

2) In respect of bills discounted with Bank 97.18 71.94

2.1 Employee Benefits

(a) Post Employment Defined Contribution Plans

During the year an amount of Rs. 59.22 Lakhs (Previous Year Rs. 53.91 Lakhs) has been recognized as expenditure towards Defined Contribution Plans of the Company.

(b) Post Employment Defined Benefit Plans Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund, managed by the Life Insurance Corporation of India (LIC) makes payment to vested employ- ees at retirement, death, incapacitation or termination of employment of an amount equivalent to the respective employee''s eligible salary for fifteen days for each year of completed service subject to a maximum limit as laid down in the Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note A(ix) of Schedule U, based on upon which, the Company makes contributions to the Gratuity Fund.

3. Details on derivative instruments and unhedged foreign currency exposures:

The following derivative positions are open as at 31 March, 2013. These transactions have been undertaken to act as economic hedges for the Company''s exposures to risks in foreign exchange fluctuation in respect to the Buyers Credit Loan taken by the Company denominated in Foreign Currency and may be designated as hedging instruments.

Forward exchange contracts (being derivative instruments), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required at the settlement date of certain payables / Loans.

3.1 The Company has entered into derivative contract during the year in the form of INR/USD Principle only Swap (POS). The POS has been entered to convert the INR Loan Liability into USD Liability with the objective of reducing the overall interest cost on the INR Fixed Interest Rate Loan portfolio and hence may not qualify to be designated as hedging instruments.

4. Segment Reporting

A) Segments have been identified in line with the Accounting Standards (AS) 17 on Segment Reporting prescribed under the Companies Act, 1956, taking into account the nature of products and services, the different risks and returns, the organizational structure and the internal financial reporting system. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organizational struc- ture and its system of internal financial reporting, geographical segment based in the location of the customers has been identified as the primary segment. The Company has following two geographical segments:

5. Leases

The Company has taken machineries on non-cancellable operating lease and lease rent amounting to Rs. NIL (Previous Year Rs.16.56 Lakhs) has been charged to profit and loss account. The future minimum lease payments are as under

6. The Board of Directors at its meeting held on May 24, 2013 has recommended a final dividend of Rs 0.50 per equity share.

7. Employees Stock Option Plans:

The Company implemented "JMT Auto Limited Employee Stock Option Plan 2012" during the year as approved by the Shareholders of the Company and the Remuneration /Compensation Committee of the Board of Directors.Details of the options granted during the year under the plans are as under:

8. Previous year''s / period figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1. (iii) Rights, preferences and restrictions attached to shares

The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. 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. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Notes:

1. Term Loans from Banks (SBI and IDBI) are secured by a first pari passu charge over entire fixed assets of the Company both present and future except for the assets exclusively financed out of the loans from other banks and others along with second pari passu charge on entire current assets of the Company.

Loans from SBI will be payable in quarterly instalments (ranging between 1 and 7) with effect from 1st April, 2012 and carrying variable rate of interest, presently ranging between 13.75% and 14.75%.

Loans from IDBI are repayable in quarterly instalments (ranging between 16 and 18) with effect from from 1st April, 2010 and carrying variable rate of interest, presently ranging bewteen 13.75% and 16.00%.

2. Term Loan from Banks (BOI) are secured by First pari passu charge on Plant & Machinery Purchased out of Bank of India Finance and 2nd pari passu charge on the remaining Block of assets of the Company.

Loan is repayable in 20 quarterly instalments beginning 30th September, 2012 and carrying variable rate of interest, presently at 13.50%.

3. Loans from HDFC Bank Limited and TMF are secured by way of hypothecation on the Vehicles financed by them.

Loan from HDFC Bank Limited is repayable in 36 monthly instalments commenced from 7th December, 2010 and carrying fixed rate of interest of 10%.

Loan from TMF is repayable in 36 monthly instalments commenced from 7th August, 2011 and carrying fixed rate of interest of 13.5%

4. Term Loan from Others (Tractors and Farm Equipment Limited ) is secured by hypothecation of certain Machinery.

Loans are repayable in 36 quarterly instalments commenced from 1st October, 2011 and carrying fixed rate of interest of 10%.

5. Term Loans from L&T Finance is to be secured by a first pari passu charge over moveable and immoveable fixed assets of the Company both present and future. Term loans from Tata Capital is to be secured by 1st pari passu charge with other banks/FIs on entire Fixed assets of the Company but excluding the assests specifically charged/ proposed to be charged to other Banks or Financial Institutions. Further the above Term Loan from Tata Capital Ltd. is to be covered by irrevocable and unconditional corporate guarantee of M/s. RSD Finance Limited and M/ s Precision Automotive Co. Pvt. Ltd (Group Companies).

Loan from L&T Finance are repayable in 24 quarterly instalments commencing from 13th May, 2013 and carrying fixed rate of interest of 13%.

Loan from Tata Capital is repayable in 18 quarterly instalments commencing from 15th December, 2012 and carrying variable rate of interest, presently at 13.50%.

6. Loan from RSD Finance Ltd is repayable in lump sum in March 2015 and carrying fixed rate of interest at 12% p.a. on quarterly basis.

* The loans are also coverd by the personal gurantee of a Director of the Company

Notes:

1. All the above facilities from IDBI are secured by first pari passu charges on all current assets and second charge on entire fixed asset of the Company, both present and future.

2. Working capital facilities from BOI are secured by first pari passu charge on entire current assets of the company both present and future second pari passu charge on the remaining block of assets of the company.

3. Working Capital facilities from Axis Bank Ltd. are secured by first pari passu charge on all the current assets of the company and second pari passu charge on all the fixed assets, present and future, of the company.

Further the above facilities from BOI and Axis Bank are covered by irrevocable and unconditional corporate guarantee of M/s. RSD Finance Limited and M/s Precision Automotive Co. Pvt. Ltd (Group Companies).

* The loans are also coverd by the personal gurantee of a Director of the Company

2 Contingent Liabilities Rs in Lakhs

As at 31.03.2012 As at 31.03.2011

Contingent Liabilities not provided for

- Claims made against the Company but not acknowledged as debts

1) Jharkhand State Electricity Board towards fuel surcharge and delayed payment surcharge 16.85 46.20

2) In respect of bills discounted with Bank 71.94 95.95

2.1 Employee Benefits

(a) Post Employment Defined Contribution Plans

During the year an amount of Rs. 53.91 lakhs (Previous Year Rs. 74.15 Lakhs) has been recognized as expenditure towards Defined Contribution Plans of the Company.

(b) Post Employment Defined Benefit Plans Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund, managed by the Life Insurance Corporation of India (LIC) makes payment to vested employees at retirement, death, incapacitation or termination of employment of an amount equivalent to the respective employee's eligible salary for fifteen days for each year of completed service subject to a maximum limit as laid down in the Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note no. 2.10 of notes to financial statements based upon which, the Company makes contributions to the Gratuity Fund.

The following Table sets forth the particulars in respect of the aforesaid Gratuity Fund of the Company for the year ended 31st March 2012:

** Experience adjustments have been given only for two years as the actuarial valuation has been done for the first time in financial year 2010.

Notes:

(i) The estimate of future salary increases taken in to account, inflation, seniority, promotion and other relevant factors.

(ii) The expected return of plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company's policy for Plan asset management and other relevant factors.

3. Segment Reporting

A) Segments have been identified in line with the Accounting Standards (AS) 17 on Segment Reporting prescribed under the Companies Act, 1956, taking into account the nature of products and services, the different risks and returns, the organizational structure and the internal financial reporting system. It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organizational structure and its system of internal financial reporting, geographical segment based in the location of the customers has been identified as the primary segment. The Company has following two geographical segments:

i) Domestic

ii) Export

4. The Board of Directors at its meeting held on May 25, 2012 has recommended a final dividend of Re 1 per equity share.

5. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

(i) CONTINGENT LIABILITIES NOT PROVIDED FOR Rs. in Lakhs

PARTICULARS Current Year Previous Year

a) Bank Guarantee Outstanding 22.50 29.85

b) Claims made against the Company but not acknowledged as debts

i. Jharkhand State Electricity Board towards fuel 46.20 46.20 surcharge and delayed payment surcharge

ii. Bihar Sales Tax relating to year 2002-03, as per - 1.49 demand notice 519 dated 25.6.2005 with Joint Commissioner, Jamshedpur

c) Letter of Undertaking for availing duty exemption 992.73 1,835.69 under EPCG Scheme

(ii) The Company has not received information from vendors regarding their status under the Micro, small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amounts unpaid as at the yearend together with interest paid/payable under this Act have not been given.

(iii) Employee Benefits

(a) Post Employment Defined Contribution Plans

During the year an amount of Rs. 74.15 Lakhs (Previous Year Rs. 64.47 Lakhs) has been recognized as expenditure towards Defined Contribution Plans of the Company.

(b) Post Employment Defined Benefit Plans

Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund, managed by the Life Insurance Corporation of India (LIC) makes payment to vested employees at retirement, death, incapacitation or termination of employment of an amount equivalent to the respective employee's eligible salary for fifteen days for each year of completed service subject to a maximum limit as laid down in the Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note A(ix) of Schedule U, based on upon which, the Company makes contributions to the Gratuity Fund.

(iv) SEGMENT REPORTING

A. Segments have been identified in line with the Accounting Standards (AS) 17 on Segment Reporting prescribed under the Companies Act, 1956, taking into account the nature of products and services, the different risks and returns, the organizational structure and the internal financial reporting system.

It has manufacturing location in India only. Based on the dominant source and nature of risk and returns of the Company, its internal organizational structure and its system of internal financial reporting, business segment has been identified as the primary segment. The Company has following two business segments:

i. Automobile

ii. Oil and Gas

The Company does not have reportable business segment for the year ended 31st March, 2011 as the turnover of Oil and Gas Segment does not exceeds 10% of the total revenue.

(v) RELATED PARTY DISCLOSURE

(a)

Related party disclosures as required under Accounting standard - 18 on "Related Party Disclosure" notified by the Central Government under the Companies (Accounting Standards) Rules, 2006

a) Associate Companies: Precision Automotive Co. Pvt. Ltd

RSD Finance Limited,

K. U. Auto Engineering Pvt. Ltd.

S R P Oils Pvt. Ltd.,

Prestige Equipment's Pvt. Ltd.

b) Investing Parties: Bach Ltd.

c) Key management personnel: Mr. Rajeev Singh Dugal

Mr. Jasjit Singh Dugal

(vi) The Company has reviewed potential generation of economic bnefits from its cash generating units and concluded that there is no further impairments during the year.

(vii) The Company has entered into Forward contracts (being derivative instruments) which are not intended for trading or speculation purpose for hedging currency related risks.

(viii) The previous year's figures have been regrouped and rearranged wherever necessary to make the same comparable with current year's figure.


Mar 31, 2010

(i) CONTINGENT LIABILITIES NOT PROVIDED FOR (Rs. in Lacs)

PARTICULARS Current Year Previous Year

a) Bank Guarantee Outstanding 29.85 67.50

b) Claims made against the Company but

not acknowledged as debts

i. Jharkhand State Electricity Board towards

fuel surcharge and delayed payment surcharge 46.20 46.20

ii. In respect of bill discounted with the

Bank 3,430.32 1,811.43

iii. Bihar Sales Tax relating to year

2002-03, as per demand notice 519

dated 25.06.2005 with Joint Commissioner ,

Jamshedpur 1.49 1.49

c) Letter of Undertaking for availing duty

exemption under EPGC Scheme 1,835.69 1,769.40

(II) The Company has not received information from vendors regarding their status under the Micro, small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amounts unpaid as at the year end together with interest paid/payable under this Act have not been given.

(III) Employee Benefits

(a) Post Employment Defined Contribution Plans

During the year an amount of Rs. 64.47 Lacs (Previous Year Rs. 63.90 Lacs) has been recognised as expenditure towards Defined Contribution Plans of the Company.

(b) Post Employment Defined Benefit Plans

Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Trust Fund, managed by the Life Insurance Corporation of India (LIC) makes payment to vested employees at retirement, death, incapacitation or termination of employment of an amount equivalent to the respective employees eligible salary for fifteen days for each year of completed service subject to a maximum limit as laid down in the Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note A(ix) of Schedule U, based on upon which, the Company makes contributions to the Gratuity Fund.

Notes:

(i) This being the first year of disclosure, previous year figures have not been furnished.

(ii) The estimate of future salary increases taken in to account, inflation, seniority, promotion and other relevant factors.

(iii) The expected return of plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company’s policy for Plan asset management and other relevant factors. ( c) The Company has adopted the Accounting Standard (AS) 15 on ‘Employee Benefits’ notified under the Companies Act, 1956 and revised its accounting policy in respect of employee benefits. Pursuant to the adoption of AS 15 an amount of Rs. 3.31 Lacs (Net of tax effect of Rs. 1.71 Lacs), arising upon remeasurement of certain employee benefit obligations, as on 1st April 2009, has been recognised with corresponding adjustment against General Reserve (Schedule B) in keeping with transitional provisions of the aforesaid AS.

Note: The above figures do not include provision for Gratuity and Leave encashment benefits, as actuarial valuation is done on an overall basis.

(iV) SEGMENT REPORTING

The Company is a manufacturer of Automotive Components parts and managed organisationally as a single unit. The company does not have reportable geographical segment as its export turnover does not exceed 10% of its revenue to external customers.

(V) The Company has reviewed potential generation of economic benefits from its cash generating units and concluded that there is no further impairments during the year.

(Vi) The previous years figures have been regrouped and rearranged wherever necessary to make the same comparable with current years figure.

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