Online-Trading Portfolio-Tracker Research Back-Office MF-Tracker
BSE Prices delayed by 5 minutes... << Prices as on Mar 28, 2024 >>   ABB 6363.3 [ 1.33 ]ACC 2490.7 [ 1.39 ]AMBUJA CEM 612.3 [ 1.76 ]ASIAN PAINTS 2846 [ 0.56 ]AXIS BANK 1048.3 [ -0.50 ]BAJAJ AUTO 9144.9 [ -0.29 ]BANKOFBARODA 264.2 [ 2.07 ]BHARTI AIRTE 1229.05 [ 0.36 ]BHEL 247.2 [ 1.77 ]BPCL 602.3 [ 1.23 ]BRITANIAINDS 4912.95 [ -0.14 ]CIPLA 1494.65 [ 1.94 ]COAL INDIA 433.75 [ 0.70 ]COLGATEPALMO 2710.9 [ 2.02 ]DABUR INDIA 523.15 [ 0.33 ]DLF 898.3 [ 1.99 ]DRREDDYSLAB 6155.15 [ 1.78 ]GAIL 181.15 [ 0.50 ]GRASIM INDS 2288.5 [ 3.74 ]HCLTECHNOLOG 1543.3 [ -0.26 ]HDFC 2729.95 [ -0.62 ]HDFC BANK 1448.2 [ 0.52 ]HEROMOTOCORP 4717.2 [ 3.21 ]HIND.UNILEV 2268.25 [ 1.26 ]HINDALCO 560.45 [ 0.52 ]ICICI BANK 1095.85 [ 1.09 ]IDFC 110.65 [ -0.58 ]INDIANHOTELS 591.35 [ 0.96 ]INDUSINDBANK 1555.7 [ 1.47 ]INFOSYS 1498.8 [ 0.99 ]ITC LTD 428.55 [ 0.13 ]JINDALSTLPOW 849.45 [ 1.88 ]KOTAK BANK 1785.8 [ 0.57 ]L&T 3774.1 [ 1.83 ]LUPIN 1617.85 [ 1.23 ]MAH&MAH 1921.35 [ 2.26 ]MARUTI SUZUK 12613.1 [ 0.74 ]MTNL 32.92 [ -3.01 ]NESTLE 2623.3 [ 2.18 ]NIIT 105.55 [ -2.72 ]NMDC 201.7 [ 1.33 ]NTPC 335.95 [ 1.60 ]ONGC 267.85 [ 2.29 ]PNB 124.35 [ 1.30 ]POWER GRID 277.05 [ 2.21 ]RIL 2976.8 [ -0.37 ]SBI 752.6 [ 2.53 ]SESA GOA 271.65 [ 0.02 ]SHIPPINGCORP 208.75 [ 3.42 ]SUNPHRMINDS 1620.5 [ 0.77 ]TATA CHEM 1080.6 [ -2.72 ]TATA GLOBAL 1095.4 [ 0.56 ]TATA MOTORS 993 [ 1.45 ]TATA STEEL 155.9 [ 2.00 ]TATAPOWERCOM 394.15 [ 1.49 ]TCS 3883.55 [ 1.20 ]TECH MAHINDR 1250.4 [ -0.26 ]ULTRATECHCEM 9745.05 [ 1.24 ]UNITED SPIRI 1134.3 [ -0.34 ]WIPRO 480.05 [ 1.66 ]ZEETELEFILMS 138.7 [ -1.87 ] BSE NSE
You can view the entire text of Notes to accounts of the company for the latest year

BSE: 514034ISIN: INE187A01017INDUSTRY: Textiles - Manmade Fibre - PFY/PSF

BSE   ` 4.42   Open: 4.42   Today's Range 4.42
4.42
+0.21 (+ 4.75 %) Prev Close: 4.21 52 Week Range 2.86
13.55
Year End :2018-03 

Note 1 - CORPORATE INFORMATION:

JBF Industries Limited ("the Company") is a limited Company domiciled and incorporated in India and its shares are publicly traded on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), in India. The registered office of the Company is situated at Survey No. 273, Village Athola, Dadra & Nagar Haveli, Silvassa - 396230, India. Company is engaged in the manufacturing business of Polyester Chips, Polyester Yarn and Processed Yarn.

The financial statements for the year ended 31st March, 2018 were approved and adopted by board of directors in their meeting held on 20th June, 2018

Note 2 - BASIS OF PREPARATION:

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (Ind As).

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, which are measured at fair value/ amortised cost.

The financial statements are presented in Indian Rupees (Rs.), which is the Company's functional and presentation currency and all values are rounded to the nearest crore with two decimal, except when otherwise indicated.

5.1 Buildings include cost of shares in Co-operative Societies Rs. 8,000/- (as at 31st March 2017 Rs. 8,000/-).

5.2 Property, Plant and Equipment are pledged as collateral against borrowings, the details related to which have been described in Note 21 and 25.

5.3 In accordance with the Indian Accounting Standard (Ind AS -36) on "Impairment of Assets", the management during the year carried out an exercise of identifying the assets that may have been impaired in accordance with the said Ind AS. On the basis of review carried out by the management, there was no impairment loss on property, plant and equipment during the year ended 31st March, 2018.

5.4 In accordance with the exemption given under Ind AS 101, which has been exercised by the Company, a first time adopter can continue its previous GAAP policy for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the previous GAAP financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period i.e. April 01, 2016. Accordingly, foreign currency exchange differences arising on translation/settlement of long-term foreign currency monetary items acquired before 01st April, 2016 pertaining to the acquisition of a depreciable asset amounting to Rs. 0.25 Crore gain (31st March, 2017 Rs. 0.06 Crore gain) are adjusted to the cost of respective item of property, plant and equipment which is included in foriegn exchange difference above.

5.5 Other intangible assets represents Computer software other than self generated.

6.1 The Company's investment properties as at 31st March, 2018 consists of land held for undetermined future use.

6.2 As at 31st March, 2018 and 31st March, 2017, the fair values of the properties are Rs. 3.18 Crore and Rs. 2.99 Crore respectively. These valuations are based on valuations performed by an independent valuer, who is a specialist in valuing these types of investment properties. The fair value of the assets is determined using residual technique of valuation. The fair value measurement is categorised in Level 3 fair value hierarchy. The above method consists of estimating and assessing the prevailing market value of a Residential unit after adjusting various factors.

6.3 The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

9.1 During the previous years the company was liable to pay MAT under section 115JB of the Income Tax Act, 1961 (The Act) and the amount paid as MAT was allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next Ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB, of the Act. Accordingly as advised in Guidance note on " Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961" issued by the Institute of Chartered Accountants of India, Rs.Nil (for the year ended 31st March 2017 Rs.0.63 Crore) being the excess of tax payable u/s 115JB of the Act over tax payable as per the provisions other than section 115JB of the Act had been considered as MAT credit entitlement and credited to statement of profit and loss during the previous year.

12.1 (i) Trade receivables as at 31st March, 2018 includes amounts due from certain parties aggregating to Rs.62.00 Crore are overdue and considered doubtful, however Management is of the view that these amounts will be recovered in due course and no provisions have been considered necessary at this stage.

(ii) Trade receivables as at 31st March, 2018 includes Rs. 226.83 Crore (excluding amounts as referred in Note 12.1 (i) due from certain parties, which are outstanding for the extended period of time and/or in respect of which the parties did not honour the bills. Efforts are being made to recover the above receivables, and management believes that these are good for recovery and no provision is required.

12.2 Debts includes due from related party Rs.98.06 Crore (as at 31st March, 2017 Rs.20.08 Crore) (refer Note 41)

15.1 Unsecured inter-corporate Deposits includes Rs.5.00 Crore (As at 31st March, 2017 Rs.5.00 Crore) backed by personal guarantee of a promoter of a borrower.

15.2 Secured Inter Corporate Deposits (ICD) Includes:-

(i) Loan of Rs.9.00 Crore given in earlier years to TVC Sky Shop Limited (TVC) against the pledge of 25,00,000 equity shares of Rs. 10/- each representing 25.73% of the paid up equity share capital of TVC.

(ii) Loan of Rs.11.00 Crore given in earlier years to Suryachakra Power Corporation Limited (SPCL) against the pledge of 24,31,434 equity shares of Rs.10/- each representing 1.62% of the paid up equity share capital of SPCL.

As TVC and SPCL failed to meet its commitments for repayment, the Company invoked the pledge and got transferred above mentioned equity shares in its own Demat account. As the Company does not intends to hold these shares as investment to acquire control of TVC and SPCL but as a security till the above loans are repaid, it continue to disclose the above loans as ICD as against the investment. Further TVC has not been considered as an associate within the meaning of Indian Accounting Standards 28 "Accounting for investment in associates & Joint Venture in Consolidated Financial Statements" notified under the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS).

15.3 Inter corporate deposit (ICD) of Rs.55.00 Crore and interest accrued and due thereon of Rs. 34.75 Crore (as included in the note 16) aggregating to Rs.89.75 Crore, given to various parties in earlier years, are overdue for substantial period of time and in respect of which the Company has initiated legal proceedings (including winding up petitions against a few of them). In view of the pending litigations and based on principle of prudence, Company has discontinued recognition of interest income on the same w. e. f. 1st January 2015. Management of the Company is of the view that the above receivables are good for recovery in view of available securities, personal guarantee of promoters of borrower companies etc and hence no provision for doubtful is required against the above receivables. The Company continues its efforts to recover theses receivables.

15.4 In accordance with the regulation 34 (3)of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

15.5 The Company has granted Inter Corporate Deposits to related parties for setting up project and for its business pupose.

15.6 The Company has granted Inter Corporate Deposits to others for the purpose of utilising this amount in their business.

15.7 Refer Note 46 for Impairment of Subsidiaries Exposures.

16.1 Interest Receivable includes Rs.111.93 Crore (as at 31st March, 2017 Rs.47.64 Crore) due from related parties. (refer Note 41)

16.2 Others Includes mainly derivative receivable and advance against salary.

16.3 Refer Note 15.3 in respect of Interest Receivable on Inter Corporate Deposits.

16.4 Refer Note 46 for Impairment of Subsidiaries Exposures.

16.5 Claims & discounts receivables of Rs.178.75 crore from suppliers, are overdue for the extended period of time. Efforts are being made to recover the above receivables. Management is of the view that the same have been accounted based on the management's best estimate and are good for recovery.

18.1 Others Includes prepaid expenses and excise deposit.

18.2 Assets held for sale represents plant and machineries discarded in earlier years and not in use and are carried at estimated net realisable value as determined by the management.

19.2 Terms / Rights Attached to Equity Shares :

The holder of equity shares of Rs. 10/- each is entitled to one vote per share. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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 share holders.

20.1 Nature and Purpose of Reserve

1. Capital Redemption Reserve:

Capital redemption reserve was created against buy back of shares. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

2. capital Reserve

Capital reserve was created upon on forfeiture of share warrants. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

3. Securities Premium Account:

Securities premium was created when share are issued at premium. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

4. Foreign Currency Monetary Items Translation Difference Account :

The reserve pertains to exchange difference relating to long term monetary items in so far as they do not relate to acquisition of depreciable capital assets which are accumulated in "Foreign Currency Monetary Item Translation Difference Account" and amortised in the Statement of Profit and Loss over the balance period of such long term monetary items.

5. Remeasurements of Defined Benefit Plans:

Other comprehensive income comprises of re-measurements of defined benefit obligations.

21.1 Term loans referred to in (a) above and current maturities of long term borrowings referred in Note 27:-

i) Rs.164.48 Crore (as at 31st March, 2017 Rs. 178.97 Crore) carrying interest at the rate of 10.50% to 13.50 % are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat. Rs.119.86 Crore (as at 31st March, 2017 Rs.122.21 Crore) carrying interest at the rate of 12.45% to 13.60 % are to be secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further to be secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

ii) Rs.6.86 Crore (as at 31st March, 2017 Rs.18.75 Crore) carrying interest at the rate of 11.80 % is secured by way of second pari passu charge on the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and the movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat . Rs. 27.50 Crore (as at 31st March, 2017 Rs. 30.00 crore) carrying interest at the rate of 12.30% is secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

iii) Rs.24.95 Crore (as at 31st March, 2017 X 50.00 Crore) carrying interest at the rate of 12.60 % are secured by way of First pari passu charge on all the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujrat.

iv) Rs.50.00 Crore (as at 31st March, 2017 Rs. 50.00 Crore) is secured by way of pledged of Equity Shares of the Company by the promoter.

21.2 External Commercial Borrowings referred to in (b) above and current maturities of long term borrowings referred in Note 27:-

Rs.208.44 Crore (as at 31st March, 2017 Rs.231.87 Crore) carrying interest at the rate of LIBOR plus 2.5 percentage to 5 percentage are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

21.3 Vehicle loans referred to in (c) above and current maturities of long term borrowings referred in Note 27:-

Rs.0.05 Crore (2017: Rs.0.08 Crore) carrying interest at the rate of 8.18-8.88 % are secured by specific charge on the vehicles covered under the said loans.

21.4 Unsecured Term loans referred to in (d) above and current maturities of long term borrowings referred in Note 27:-

i) Rs.33.04 Crore (as at 31st March, 2017 Rs.44.11 Crore) carrying interest at the rate of 3.50% was secured by pledge of fixed deposits with banks of Rs. Nil (as at 31st March, 2017 Rs.8.36 Crore)

ii) Rs.143.08 Crore (as at 31st March, 2017 Rs.149.73 Crore) carrying interest at the rate of 14.00 % is secured by way of pledged of Equity Shares of the Company by the promoters.

iii) Rs.NIL (as at 31st March, 2017 Rs.20.00 Crore) carrying interest at the rate of 14.00 % is secured by way of pledged of Equity Shares of the Company by the promoter.

21.5 Terms of Repayment

i) Secured Term Loans from Banks

Loan of Rs.10.00 Crore is repayable in 4 equal quarterly installments of RS. 2.50 Crore starting from June 2019 and ending on March 2020. Loan of RS. 7.50 Crore is repayable in 4 equal quarterly installments of RS. 1.87 Crore starting on May 2019 and ending on February 2020.Loan of Rs. 11.08 Crore is repayable in 4 equal quarterly installments of RS. 2.78 Crore starting on April 2019 and ending on January 2020. Loan of RS. 55.31 Crore is repyable in 13 quarterly installments starting from May 2019 and ending on May 2022 of which first installment is of RS. 2.81 Crore, Next 4 installments are of RS. 3.75 Crore each, remaining 8 installments are of RS. 4.68 Crore each.Loan of RS. 21.88 Crore is repayable in 5 equal quarterly installments of Rs. 4.37 Crore starting on May 2019 and ending on May 2020. Loan of RS. 21.38 Crore is repayable in 9 equal quarterly installments of RS. 2.38 Crore starting on April 2019 and ending on April 2021.

ii) Secured Term Loans from Financial Institutions

Loan of RS. 37.50 Crore is repaybale in 15 equal quarterly installments of RS. 2.50 Crore starting from May 2019 and ending on November 2022.

iii) Secured External Commercial Borrowings

Loan of Rs. 143.30 Crore is repayable in 6 six monthly - first 2 installment of Rs. 19.54 Crore (USD 3000000 each) starting from September 2019 and ending March 2020, and next 4 installment of Rs. 26.05 Crore (USD 4000000 each) starting from September 2020 and ending March 2022.

iv) Secured Vehicle Loan

Loan Rs. 0.01 Crore in financial year 2019-20.

v) Unsecured Term Loans from Body Corporate

Loan of Rs. 100 Crore is repayable in 1 installment of Rs. 100 Crore in December 2019.

21.6 Term loans from banks ( including current maturities of long term borrowings of Rs. 97.53 Crore) aggregating to Rs. 252.84 Crore (as at 31st March 2017 Rs. 284.80 Crore) is guaranteed by one of the Directors of the company in his personal capacity.

21.7 As on 31st March, 2018, the Company has overdue of principal of Rs. 127.00 Crore (Previous Year : Rs. Nil) and Interest of Rs. 26.46 Crore (Previous Year : Rs. Nil) included in Current Maturities of Long term debt and Interest Accrued and Due respectively in Note 27 for a period of less than 1 year. Further, due to default in servicing of its dues by the Company, the Banks have classified all the credit facilities including current borrowings as referred in Note 25 given to the Company aggregating to Rs. 1954.05 Crore (Previous Year : Rs. Nil) as at 31st March, 2018 as Non Performing Asset (NPA) in their books of account.

21.8 The agreements in respect of non-current borrowings as at 31st March 2018 of Rs. 407.95 Crore contain certain restrictive covenants including non-adherence of initial Term Loan repayment schedule and non-payment of interest thereon as stipulated. In the current year, the Company has not complied with the terms of these covenants. The Company continued to classify these borrowings as non-current liabilities as against current liabilities which is not in line with the compliance of IND AS 1 "Presentation of Financial Statements". The Company has submitted a resolution plan to its lenders which is under negotiation.

22.1 Terms/rights attached to Cumulative Redeemable Preference Shares (CRPS)

The holder of Preference Share of the Company have a right to vote at a General Meeting of the Company only in accordance with limitations and provisions laid down in Section 47 (2) of the Companies Act, 2013. The preference share holders will be entitled to receive out of the remaining assets of the company after distribution to lenders. 75,709 2.5% CRPS are redeemable at par as : 36,509 shares on 30.09.2020, 17,837 shares on 30.09.2019 and 21,363 shares on 30.09.2018. 14,15,000 20% CRPS are redeemable at a premium of RS. 700 per share as : 3,15,000 shares on 30.09.2020, 7,70,000 shares on 30.09.2019 and 3,30,000 shares on 30.09.2018.The Preference Shares shall carry dividend at the rate of 2.5 % and 20.00% per annum payable annually.

25.1 Working Capital Loans as referred to in (a) above of RS. 1,505.86 Crore (as at 31st March, 2017 RS. 618.02 Crore) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

25.2 Buyers Credit referred to in (b) above of RS.42.29 Crore, (as at 31st March, 2017 RS. 165.48 Crore) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

25.3 As on 31st March, 2018, the Company has overdue of Working Capital loan of RS. 1,139.55 Crore (Previous Year : RS. 19.84 Crore) and Interest of RS. 60.04 Crore (Previous Year: RS. Nil) included in Interest Accrued and Due in Note 27 for a period of less than 1 year.

25.4 The Company has borrowed RS. 50.00 Crore from a financial institution ("lender") against the pledge of 55,27,711 equity shares of the Company held by the promoters of the Company. In view of the default in repayment of principle and interest thereon, the lender invoked the pledge and disposed the equity shares for RS. 1.68 Crore. The realisation value has been adjusted against the outstanding borrowing and equivalent amount has been considered as unsecured borrowing from the promoter director and in the absence of any terms for interest, no interest has been charged on the same.

33.1 During the year Company paid an amount of Rs. 5.88 Crore to the executive chairman which was in excess of remuneration as prescribed under section 197 of the Companies Act, 2013 by Rs. 4.06 Crore. The same is subject to requisite approvals from the Central Government. Further Central Government approval in respect of excess remuneration paid in the financial year 2016-17 yet to be received.

During the year Company has paid an amount of Rs. 1.35 Crore to one of the whole time directors, which is subject to shareholders' approval.

36.2 Notes Related to Corporate Social Responsibility Expenditure:

(a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the company during the year is Rs. 2.51 Crore (Previous Year Rs. 2.34 Crore)

(b) Expenditure related to Corporate Social Responsibility is Rs. 0.78 Crore (for the year ended 31st March, 2017 Rs. 0.94 Crore) and Rs.1.73 Crore (for the year ended 31st March, 2017 Rs. 1.40 Crore) remained unspend.

38.2 The Company had issued a corporate guarantee of USD 463.96 Million (equivalent of Rs. 3,022.08 Crore) to the lenders of JBF Petrochemicals limited ("JPL"), a step down Subsidiary. Subsequent to the year end, one of the lenders of JPL vide its letter dated 24th April, 2018 invoked corporate guarantee to the extent of USD 252.00 Million (equivalent of Rs. 1,641.44 Crore) as JPL has defaulted in servicing its borrowings towards principal and interest thereon. The Company carried out fair valuation of this corporate guarantee through an independent Chartered Accountant firm and as per their report the value of securities created in favor of lenders is higher than the total liability towards them. Accordingly, no provision is required towards the guarantee so invoked.

The contribution to provident fund is made to Employees' Provident Fund managed by Provident Fund Commissioner. The contribution towards ESIC made to Employees' State Insurance Corporation. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

(b) Defined Benefit Plan:

The present value of Employees' Gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognised in the balance sheet.

39.3 Risk Exposures Actuarial Risk

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

interest Risk

The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

Longevity Risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary Risk

The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

Variability in Withdrawal Rates:

If actual withdrawal rates are higher than assumed withdrawal rate than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

39.5 The average duration of the defined benefit plan obligation at the end of the reporting period is 19.04 years (as at 31st March, 2017: 18.71 years).

41.4 The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at year-end are unsecured, unless specified and settlement occurs in cash. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

41.5 IDBI Trusteeship Services Limited, the Security Trustee to, the lenders of JBF Petrochemicals Ltd. ("JPL"), a step down subsidiary, has exercised the rights of a 'Pledge' and invoked the pledge over the pledged 51% equity shares of JPL held by JBF Global Pte. Ltd., a Subsidiary Company and transferred the same to IDBI Trusteeship Services Ltd. However lenders have not adjusted any amount against the JPL's borrowings so far.

Note 3 - Fair Values

42.1 Financial instruments by Category:

Set out below is a comparison by class of the carrying amounts and fair value of the Company's financial assets and liabilities that are recognised in the financial statements.

42.2 Fair Valuation Techniques Used to Determine Fair Value

The Company maintains procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

i) Fair value of trade receivable, cash and cash equivalents, other bank balances, current borrowings, trade payables, other current financial assets and other current financial liabilities are approximate at their carrying amounts largely due to the short-term maturities of these instruments.

ii) The fair values of non-current borrowings and security deposits are calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including credit risk. The fair values of non-current borrowings are approximate at their carrying amount due to interest bearing features of these instruments.

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

iv) Fair values of quoted financial instruments are derived from quoted market prices in active markets.

v) Equity Investments in subsidiaries are stated at cost.

vi) Fair value of forward contract, options and currency & interest rate swap are derived on the basis of mark-to-market as provided by the respective bank.

42.3 Fair Value Hierarchy

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

i) Level 1 :- Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date and financial instruments like mutual funds for which net assets value (NAV) is published by mutual fund operators at the balance sheet date.

ii) Level 2 :- Inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). It includes fair value of the financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the Company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2.

iii) Level 3 :- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

42.6 Description of the Valuation Processes used by the Company for Fair Value Measurement Categorised within Level 3 :-

At each reporting date, the Company analyses the movements in the values of financial assets and liabilities which are required to be remeasured or re-assessed as per the accounting policies.

The Company also compares the change in the fair value of each financial asset and liability with relevant external sources to determine whether the change is reasonable. The Company also discusses of the major assumptions used in the valuations.

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

Note 4 - Financial Risk Management Objective and Policies

The Company is exposed to market risk, credit risk and liquidity risk. Risk management is carried out by the company under policies approved by the board of directors. The Company's documented risk management policies are effective tool in mitigating the various financial risk to which the business is exposed to in the course of daily operations This Risk management plan defines how risks associated with the Company will be identified, analysed, and managed. It outlines how risk management activities will be performed, recorded, and monitored by the Company. The basic objective of risk management plan is to implement an integrated risk management approach to ensure all significant areas of risks are identified, understood and effectively managed, to promote a shared vision of risk management and encourage discussion on risks at all levels of the organisation to provide a clear understanding of risk/benefit trade-offs, to deploy appropriate risk management methodologies and tools for use in identifying, assessing, managing and reporting on risks, and to determine the appropriate balance between cost and control of risk and deploy appropriate resources to manage/optimize key risks. Activities are developed to provide feedback to management and other interested parties (e.g. Audit committee, Board etc.). The results of these activities ensure that risk management plan is effective in the long term.

43.1 Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: foreign currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk.

The sensitivity analyses is given relate to the position as at 31st March, 2018 and 31st March, 2017.

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations, provisions and on the non-financial assets and liabilities. The sensitivity of the relevant statement of profit and loss item is the effect of the assumed changes in the respective market risks. The Company's activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. This is based on the financial assets and financial liabilities held as at 31st March, 2018 and 31st March, 2017.

(a) Foreign Exchange Risk and Sensitivity

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities. The Company transacts business primarily in USD and Euro. The Company has obtained foreign currency loans and has foreign currency trade payables, derivative instruments and receivables and is therefore, exposed to foreign exchange risk. The Company regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions.

b) interest Rate Risk and Sensitivity :-

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 .In order to optimize the Company's position with regards to interest expenses and to manage the interest rate risk treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio

The table below illustrates the impact of a 0.5% increase in interest rates on interest on financial liabilities assuming that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year.This analysis also assumes that all other variables, in particular foreign currency rates, remain constant.

c) Commodity Price Risk:-

The Company's raw materials i.e.Purified Terephthalic Acid (PTA) & Monoethylene Glycol (MEG) and finished goods i.e. Polyster Chips, Partially Oriented Yarn (POY) and Texrising Yarn (TEX) are petrochemical products. Commodity price risk arises due to fluctuation in prices of petrochemical products. The Company mitigate the risk by natural hedge as any increase/decrease in raw materials price directly reflect the finished goods price.

43.2 Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk for trade receivables, other bank balances, loans, other financial assets and financial guarantees.

a) Trade Receivables:-

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings with the Company for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Sales made to customers on credit are secured through Letters of Credit in some cases to mitigate the credit risk to an extent.

b) Bank Balances:-

The Company seeks to limit its credit risk with respect to banks by only dealing with reputable banks.

c) Refer Note 12.1

43.3 Liquidity Risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company's objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company limits its liquidity risk by ensuring funds from trade receivables and bank facilities are available.

The table below provides undiscounted cash flows towards financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

43.4 Competition and Price Risk

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

Note 5 - Capital Management

For the purpose of Company's capital management, capital includes issued capital, all other equity reserves and debts. The primary objective of the Company's capital management is to maximise shareholders value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

The Company monitors capital using gearing ratio, which is net debt divided by total capital (equity plus net debts). Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances ,current investments and fixed deposit more than 12 months. Equity comprises all components including other comprehensive income.

Note 6 - Segment Reporting

The Company is engaged only in the business of producing polyester based products. As such, there are no separate reportable segments, the disclouser as required as per Indian Accounting Standard on "Operating Segments" (IND AS -108) is not given.

Note 7 - Subsidiaries Exposure

The Company as on 31st March, 2018 has an aggregate exposure of Rs. 1,430.54 Crore (excluding corporate guarantee as mentioned in Note 38.2) in its subsidiaries namely JBF Global Pte ltd ("JGPL") and JBF Petrochemicals limited ("JPL") by way of investment in equity, loans including interest thereon and other receivables as at 31st March, 2018. The details of above exposure are as under:

The operations of JBF RAK LLC's plant located at Ras al-Khaimah in U.A.E., a subsidiary of JGPL remained suspended since long due to its financial issues with its lenders etc. Uncertainty is also faced in respect of PTA project at Mangalore, being executed by JPL, due to non-commencement of operation as planned and default in servicing of its borrowings towards principle and interest. The lenders of JPL have also invoked the pledged equity shares of JPL held by JGPL as mentioned in Note 41.5 and corporate guarantee of the Company as mentioned in Note 38.2. Subsequent to the year end, one of the lenders of JPL has made an application with National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016. Latest audited consolidated financial statements of subsidiary are also not available. Negotiation with the lenders of above subsidiaries to find an amicable solution is in process and subsequent to the year end JBF group has entered into a binding term sheet with KKR, an existing financial investors to the Company and JGPL for infusion of funds and change in management control of JGPL.

In view of the above, the impairment testing in respect of the Company's exposures to its subsidiaries could not be carried out and hence no provision for impairment, if any, has been provided for.

Note 8- Going Concern

During the year the Company underwent significant financial stress due to suspension of manufacturing operations at its subsidiaries, delay in completion of PTA project at Mangalore and adverse market conditions. All these have resulted in financial constraint to the Company, losses in the operations, default in repayment of principle and interest to lenders, classification of Company's borrowings as Non- performing assets by its lenders and calling back of loans by some of the lenders. Subsequent to the year end, one of the operating creditors has also made an application to NCLT under Insolvency and Bankruptcy Code, 2016 in respect of which the Company is in the process to settle the claim of that creditor.

The Company has submitted a resolution plan to its lenders and has also entered into a binding term sheet with KKR an existing investors for infusion of funds in its subsidiary and change in equity holding and management of JBF Global Pte Ltd. All the plants of the Company are operational and the management is of the view that above circumstances will not affect the operations of the Company and hence continue to prepare its financial statement on going concern basis.

Note 9 - Previous year's figures have been regrouped and reclassified, wherever necessary to make them comparable.