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Notes to Accounts of Lakshmi Electrical Control Systems Ltd.

Mar 31, 2018

1. Company overview

Lakshmi Electrical Control Systems Limited (''the Company'') is a public limited company incorporated in India. The company''s equity shares are listed on BSE. The address of its registered office and principal place of business are disclosed in the introduction to the Annual Report. The company is engaged in the manufacturing and selling of control panels and plastic components.

Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of ''10/- each. All these equity shares have the same rights and preferences with respect to payment of dividend, repayment of capital and carries one vote for every such class of shares held. In the event of liquidation, the excess assets shall be distributed amongst the members in proportion to the capital.

i) General reserve: Part of retained earnings was earlier utilised for declaration of dividends as per the erstwhile Companies Act, 1956. This is available for distribution to share holders.

ii) Retained earnings: Company''s cumulative earnings since its formation minus the dividends/capitalisation and earnings transferred to general reserve.

iii) Securities Premium: Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

iv) FVOCI - Equity instruments: The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

(v) Brief description of the Plans & risks

These plans typically expose the Company to actuarial risks such as : Investment risk, interest risk, longetivity risk and salary risk.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount which is determined with reference to market yields at the end of the reporting period on government bonds. Plan investment is a mix of investments in government securities, other debt instruments and equity shares of listed companies.

Interest risk:

A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan''s debt instruments, if any.

Longetivity 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 benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of plan participants will increase the plan''s liability.

The above sensitivity analysis are 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. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

There are no transfers between levels 1 and 2 during the year.

The Company''s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include the use of quoted market prices or dealer quotes for similar instruments. The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.

2. CAPITAL MANAGEMENT

(a) Risk management

The Company''s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, The company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Company is debt free currently and it intends to maintain a optimal gearing ratio for optimising shareholder value.

3. FINANCIAL RISK MANAGEMENT

The Company''s activities expose it to market risk, liquidity risk and credit risk.

(A) Credit risk

Company faces credit risk from cash and cash equivalents, deposits with banks and financial institutions and unsecured trade receivables. The Company doesn''t face any credit risk with other financial assets

(i) Credit risk management

Credit risk on deposit is mitigated by the depositing the funds in Scheduled Commercial Banks.

For trade receivables, the primary source of credit risk is that these are unsecured. The Company sells the products to customers only when the collection of trade receivables is certain and whether there has been a significant increase in the credit risk on an on-going basis is monitored throughout each reporting period. As at the balance sheet date, based on the credit assessment the historical trend of low default is expected to continue. An impairment analysis is performed at each reporting date on an individual basis for major clients. Any recoverability of receivables is provided for based on the impairment assessment. Historical trends showed as at the transition date and 31st March, 2017 company had no significant credit risk.

(B) Liquidity risk

Objective of liquidity risk management is to maintain sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring Balance Sheet liquidity ratios against internal requirements.

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR and have an average maturity of 1 year.

(ii) Maturities of financial liabilities

he tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for:

a) all non-derivative financial liabilities, and

b) net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(C) Market risk

(i) Foreign currency risk

The Company activities exposes it to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and EURO Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows.

4. DISCLOSURE AS PER SCHEDULE III

As defined under Micro, Small and Medium Enterprises Development Act, 2006, the disclosure in respect of the amount payable to such enterprises as at 31.03.2018 has been made in the financial statements based on information received and available with the Company.

5. FIRST-TIME ADOPTION OF IND AS

Transition to Ind AS

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

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31stMarch, 2017 and in the preparation of an opening Ind AS balance sheet as at 1st April, 2016 (The Company''s date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).

An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following notes.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions

A.1.1 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities.

Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

A.1.2 Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.

A.2 Ind AS mandatory exceptions

A.2.1 Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1st April, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVOCI;

- Investment in mutual funds carried at FVTPL;

B. Notes to first-time adoption:

Note 1: Investment in Mutual fund

Under previous GAAP, current investments in mutual funds were carried at cost or NRV whichever is lower, Under Ind-AS the Mutual funds is carried at fair value through profit & loss (FVTPL) this resulted in increase of equity by Rs. 0.85 as at 31st March, 2017. (1st April, 2016 - Rs.NIL).

Note 2: Fair valuation of investments

Under Previous GAAP, investment in equity instruments were carried at nominal value, under the Ind-AS same investments are carried at FVOCI, Consequent to this change, the amount of investments increased by Rs.795.99 as at 31st March, 2017 (1st April, 2016 - Rs.2,898.66).

Note 3: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year.

Under IGAAP company has not recognised net asset position in gratuity, on adoption of Ind-AS group has recognised net asset position as on 1st April, 2016 which has resulted in increase of retained earnings by Rs.1.04 and retained earnings by Rs.15.78 as at 31st March, 2017.

Note 4: Deferred Taxes

Deferred tax have been recognised on the adjustments made on transition to Ind AS.

Note 5: Proposed dividend

Under the previous GAAP, proposed dividends were recognised as a provision in the financial statements, even if declared after the balance sheet date. Under Ind AS, dividends are recognised when declared. This resulted in a timing difference and has been reflected in total equity of the relevant financial years.


Mar 31, 2017

Disclosure in respect of Material Related Party Transactions during the year:

1. Purchase of Goods includes Lakshmi Machine Works Limited Rs. 32,24,37,169 (Previous Year Rs. 32,44,02,852), and Lakshmi Precision Tools Limited Rs. 13,11,40,547 (Previous Year Rs. 11,69,67,155), Others

- Other Related Parties - Associates Rs. 10,75,070 (Previous Year Rs. 9,58,527).

2. Sale of Goods includes Lakshmi Machine Works Limited Rs. 1,71,79,80,410 (Previous Year Rs. 1,98,78,19,722) and Others - Other Related Parties - Associates Rs. 1,90,63,237 (Previous Year Rs. 1,12,01,327).

3. Sale of Fixed Assets includes Starline Travels Limited Nil (Previous Year Rs. 6,25,000) and Others - Other Related Parties - Associates Nil (Previous Year Nil).

4. Rendering of Services includes Lakshmi Machine Works Limited Rs. 68,64,368 (Previous Year Rs. 2,32,80,534), Lakshmi Precision Tools Limited Rs. 42,75,769 (Previous Year Rs. 42,18,944), and Others -Other Related Parties - Associates Rs. 15,49,992 (Previous Year Rs. 30,92,073).

5. Receiving of Services includes Lakshmi Cargo Company Limited Rs. 31,54,849 (Previous Year Rs. 44,83,137), Starline Travels Limited Rs. 39,13,267 (Previous Year Rs. 41,79,688), and Others - Other Related Parties - Associates Rs. 3,70,920 (Previous Year Rs. 3,71,794).

6. Managerial Remuneration includes amount paid to Smt. Nethra J.S. Kumar Rs. 88,64,067 (Previous Year Rs. 82,11,929)

7. Sale of Equity Shares includes Lakshmi Electrical Drives Limited Nil (Previous Year Rs. 10,00,00,000) and Others - Other Related Parties - Associates Nil (Previous Year Nil).

8. Dividend paid to includes Smt. Nethra J.S. Kumar Rs. 39,78,696 (Previous Year Rs. 34,81,359), Lakshmi Electrical Drives Limited Rs. 13,82,048 (Previous Year Rs. 9,18,442) and Others - Others Related Parties - Associates Rs. 1,18,800 (Previous Year Rs. 1,03,950).

9. Outstanding Receivables includes Lakshmi Machine Works Limited Rs. 33,27,84,935 (Previous Year Rs. 30,25,78,052) and Others - Other Related Parties - Associates Rs. 70,93,162 (Previous Year Rs. 38,34,551).

10. Outstanding Payables includes Lakshmi Machine Works Limited 9,07,65,474 (Previous Year Rs. 6,97,27,147) and Lakshmi Precision Tools Limited Rs. 1,37,48,723 (Previous Year Rs. 33,49,817), and Others

- Other Related Parties - Associates Rs. 17,23,809 (Previous Year Rs. 12,17,793).


Mar 31, 2016

1. Relationships

Description of relationship Names of related parties

Other related parties Eshann Enterprises Ltd

GKD ITR Tooling Center

Harshni Textiles Ltd

Integrated Electrical Controls India Ltd

Lakshmi Precision Tools Ltd

Lakshmi Electrical Drives Ltd

Lakshmi Ring Travellers (Coimbatore) Ltd

Lakshmi Cargo Company Ltd

Lakshmi Technology & Engineering Industries Ltd

Lakshmi Life Sciences Ltd

LCC Cargo Holding Ltd

Lakshmi Machine Works Ltd

Mahalakshmi Engineering Holding Ltd

Quattro Engineering India Ltd

Starline Travels Ltd

Sun Spintex Ltd

Venkata Varadhaa Agencies Pvt Ltd Supreme Dairy Products India Pvt Ltd Key Management Personnel Smt. Nethra J.S. Kumar

Chairperson and Managing Director

Disclosure in respect of Material Related Party Transactions during the year :

1. Purchase of Goods includes Lakshmi Machine Works LimitedRs,32,44,02,852 (Previous YearRs,85,50,14,984) and Lakshmi Precision Tools LimitedRs,11,69,67,155 (Previous YearRs,19,15,05,632), Others - Other Related Parties - AssociatesRs,9,58,527 (Previous YearRs,7,32,523).

2. Sale of Goods includes Lakshmi Machine Works LimitedRs,1,98,78,19,722 (Previous YearRs,1,91,36,36,186) and Others - Other Related Parties - AssociatesRs,1,12,01,327 (Previous YearRs,1,28,58,918).

3. Sale of Fixed Assets includes Lakshmi Precision Tools Limited Rs,Nil (Previous YearRs,12,78,181), Starline Travels LimitedRs,6,25,000 (Previous YearRs,Nil) and Others - Other Related Parties – Associates Rs,Nil (Previous Year Rs,Nil).

4. Rendering of Services includes Lakshmi Machine Works LimitedRs,2,32,80,534 (Previous YearRs,2,09,46,950), Lakshmi Precision Tools LimitedRs,42,18,944 (Previous YearRs,33,28,834) and Others - Other Related Parties -AssociatesRs,30,92,073 (Previous YearRs,33,32,826).

5. Receiving of Services includes Lakshmi Cargo Company LimitedRs,44,83,137 (Previous YearRs,38,55,529) Starline Travels LimitedRs,41,79,688 (Previous YearRs,37,91,633) and Others - Other Related Parties - AssociatesRs,3,71,794 (Previous YearRs,3,79,902).

6. Managerial Remuneration includes amount paid to Smt. Nethra J.S. KumarRs,82,11,929 (Previous YearRs,86,12,565)

7. Sale of Equity Shares includes Lakshmi Electrical Drives LimitedRs,10,00,00,000 (Previous Year Rs,Nil) and Others - Other Related Parties – Associates Rs,Nil (Previous YearRs,Nil).

8. Dividend paid to includes Smt. Nethra J.S. KumarRs,34,81,359 (Previous YearRs,24,86,685) Lakshmi Electrical Drives LimitedRs,9,18,442 (Previous YearRs,6,56,030), Others - Other Related Parties - AssociatesRs,1,03,950 (Previous YearRs,74,250).

9. Outstanding Receivables includes Lakshmi Machine Works LimitedRs,30,25,78,052 (Previous YearRs,28,09,30,562) and Others - Other Related Parties - AssociatesRs,38,34,551 (Previous YearRs,19,81,583).

10. Outstanding Payables includes Lakshmi Machine Works LimitedRs,6,97,27,147 (Previous YearRs,13,09,77,986) and Others - Other Related Parties - AssociatesRs,45,67,610 (Previous YearRs,1,07,41,528).


Mar 31, 2014

1. A s defined under Micro, Small and Medium Enterprises Development Act 2006, the disclosure in respect of the amount payable to such enterprises as at 31.03.2014 has been made in the financial statements based on information received and available with the company.

2. Contingent Liabilities and claims against the company not acknowledged as debts:

A] (i) Estimated amount of contracts to be Executed on capital account and not provided for 28,57,954 24,84,388

(ii) Guarantees and Counter Guarantees executed by the Company 63,44,038 56,98,238

(iii) Letters of Credit 1,24,67,103 31,27,472

B] Sales Tax Assessments have been completed up to Financial Year 2005 – 2006 and Financial Year 2009 - 2010.

C] Income Tax Assessments have been completed up to A.Y. 2011 -12.

3. Some of the Debtors / Creditors accounts whose balances show a variance as compared to the Books of Accounts of the Company are in the process of reconciliation. This however will not have any material impact on the profits for the year.

4. Figures have been rounded off to the nearest rupee.

5. The previous year''s figures have been regrouped and reclassified wherever necessary to suit this year''s presentation.


Mar 31, 2013

1. Secured Loans :

Working Capital loans from Indian Bank and Bank of Baroda have been secured by the hypothecation of Raw Materials, Components, Work-in-progress, Finished Goods, Book Debts and all other movable current assets of the Company.

2. Contingent Liabilities and claims against the company not acknowledged as debts:

A] (i) Estimated amount of contracts to be Executed on capital account and not provided for 2,484,388 1,067,008

(ii) Guarantees and Counter Guarantees executed by the Company 5,698,238 3,071,450

(iii) Letters of Credit 3,127,472 -

B] (i) Sales Tax Assessments have been completed up to Financial Year 2004 - 2005

(ii) The Company''s appeal against demand for Sales Tax penalty of Rs.1.34 Lakhs for the financial year 1997-98 has been decided against the Company. However no provision is made as on 31.03.2013 in view of the waiver of penalty under the Tamil Nadu Sales Tax (Settlement of Arrear) Scheme 2008.

C] Income Tax Assessments have been completed up to A.Y. 2010 -11.

3. Some of the Debtors / Creditors accounts whose balances show a variance as compared to the Books of Accounts of the Company are in the process of reconciliation. This however will not have any material impact on the profits for the year.

4. Figures have been rounded off to the nearest rupee.

5. The previous year''s figures have been regrouped and reclassified wherever necessary to suit this year''s presentation.

Disclosure in respect of Material Related Party Transactions during the year:

1. Purchase of Goods includes Lakshmi Machine Works Limited Rs. 71,24,80,572 (Previous Year Rs. 89,37,39,181), and Others - Other Related Parties - Associates Rs. 8,51,24,875 (Previous Year Rs. 6,86,287).

2. Sale of Goods includes Lakshmi Machine Works Limited Rs. 1,28,02,43,173 (Previous Year Rs. 1,60,43,95,330), and Others - Other Related Parties - Associates Rs. 13,57,45,921 ( Previous Year Rs. 2,16,81,246).

3. Sale of Fixed Assets includes SunSpintex (Merged with LEDL) Rs. 1,09,74,955 (Previous Year Rs. 4,12,85,000) and Others - Other Related Parties - Associates Rs. 3,09,979 (Previous Year Rs. 23,090).

4. Rendering of Services includes Lakshmi Machine Works Limited Rs. 1,65,36,441 (Previous Year Rs. 2,07,68,094),and Others - Other Related Parties - Associates Rs. 16,11,656 (Previous Year Rs. 20,50,328).

5. Receiving of Services includes Lakshmi Precision Tools Limited Rs. 10,08,677(Previous Year Rs. 2,97,014) Lakshmi Cargo Company Limited Rs. 9,15,041 (Pervious Year Rs. 21,59,315), Starline Travels Limited Rs. 18,11,457(Previous Year Rs. 5,95,381), and Others - Others Related Parties - AssociatesRs. 2,78,964 (Previous Year Rs. 4,00,365).

6. Managerial Remuneration includes amount paid to Smt. Nethra J.S. Kumar Rs. 50,59,900 (Previous Year Rs. 74,70,797)

7. Dividends paid to includes Smt. Nethra J.S. Kumar Rs.24,86,685 (Previous Year Rs. 22,38,017), Lakshmi Electrical Drives Limited Rs.6,56,030 (Previous Year Rs. 3,04,241 ) Others Related Parties - Associates Rs.74,250 (Previous Year Rs. 66,375).

8. Outstanding Receivables includes Lakshmi Machine Works Limited Rs. 14,68,23,684 (Previous Year Rs. 21,28,32,866), LMW Machinery Limited Rs. 4,03,24,773 and Others - Others Related Parties - Associates Rs. 58,84,226 (Previous Year Rs. 16,90,209).

9. Outstanding Payables includes Lakshmi Machine Works Limited Rs. 16,99,07,362 (Previous Year Rs. 18,81,18,597), LMW Machinery Limited Rs. 2,31,13,131 and Others - Others Related Parties - Associates Rs. 10,48,340 (Previous Year Rs. 2,08,623).

3) The undernoted companies constitute the " Group" in terms of regulation 3(1)(e)(i) of Securities and Exchange Board of India (Substantial Acquisition of Shares Takeovers) Regulations,1997 as amended with effect from 09- 09-2002.

1) Eshann Enterprises Ltd, 2) Harshni Textiles Ltd, 3) Integrated Electrical Controls India Ltd, 4) Lakshmi Precision Tools Ltd, 5) Lakshmi Electrical Drives Ltd, 6) Lakshmi Ring Travellers (CBE) Ltd, 7) Lakshmi Cargo Company Ltd, 8) Lakshmi Technology & Engineering Industries Ltd, 9) Lakshmi Life Sciences Ltd, 10) LCC Cargo Holding Ltd, 11) Lakshmi Machine Works Ltd, 12) LMW Machinery Ltd, 13) Mahalaxmi Engineering Holding Ltd, 14) Quattro Engineering India Ltd, 15) Starline Travels Ltd, 16) Titan HMG Paints India Ltd, 17) Venkata Varadhaa Agencies Ltd, 18) Sun Spintex Ltd.


Mar 31, 2012

1. Secured Loans

Working Capital loans from Indian Bank and Bank of Baroda have been secured by the hypothecation of Raw Materials, Components, Work-in-progress, Finished Goods, Book Debts and all other movable current assets of the Company.

2. Contingent Liabilities and claims against the company not acknowledged as debts.

2011-12 2010-11 (Amount in Rs) (Amount in Rs)

A] (i) Estimated amount of contracts to be Executed on capital account and not provided for 1,067,008 1,820,325

(ii) Guarantees and Counter Guarantees executed by the Company 3,071,450 2,796,450

(iii) Letters of Credit - 721,000

B] (i) Sales Tax Assessments have been completed upto financial year 2004 - 2005.

(ii) The Company's appeal against demand for Sales Tax penalty of Rs.1.34 Lakhs for the financial year 1997-98 has been decided against the Company. However no provision is made as on 31.03.2012 in view of the waiver of penalty under the Tamilnadu Sales Tax (Settlement of Arrear) Scheme 2008.

C] Income Tax Assessments have been completed upto A.Y. 2009-2010.

3. 2 Nos. of Engel make injection moulding machines were imported under EPCG Scheme during the financial year 2007-2008. The entire export obligation has been fulfilled during the year 31.03.2012 and the formalties of redemption before JDGFT is in process.

Note: The salary escalation considered in acturial valuation,takes account of inflation,seniority,promotion and other relevant factors such as supply and demand in the employment market.

Gratuity is applicable to all permanent and full time employees of the Company.

"Gratuity payment is based on last drawn basic salary and dearness allowance at the time of termination or retirement. The Scheme takes into account each completed year of service or part thereof in excess of six months.

The entire contribution is borne by the Company."

Leave encashment benefits are provided as per the Rules of the Company.

4. Some of the Debtors / Creditors accounts whose balances show a variance as compared to the Books of Accounts of the company are in the process of reconciliation. This however will not have any material impact on the profits for the year.

5. Figures have been rounded off to the nearest rupee.

6. The previous year's figures have been regrouped and reclassified wherever necessary to suit this year's presentation.


Mar 31, 2011

2010-11 2009-10

A] (i) Estimated amount of contracts to be Executed (Amount in Rs.) (Amount in Rs.) on capital account and not provided for 1,820,325 6,981,310

(ii) Guarantees and Counter Guarantees executed by the Company 2,796,450 2,796,450

(iii) Letters of Credit 721,000 2,027,235

B] (i) Sales tax assessments have been completed upto financial year 2003 - 2004

(ii) The Company's appeal against demand for Sales Tax penalty of Rs.1.34 Lakhs for the financial year 1997-98 has been decided against the Company. However no provision is made as on 31.03.2011 in view of the waiver of penalty under the Tamilnadu Sales Tax (Settlement of Arrear) Scheme 2008.

2. Provision for Excise Duty amounting to Rs. 5,22,271/- for the uncleared stock of finished goods has been made in the accounts.

3. 2 Nos. of Engel make injection moulding machines were imported under EPCG Scheme during the financial year 2007-08. The entire export obligation of Rs.131.72 lakhs which is to be fulfilled on or before 30.01.2016 will be fulfilled by the Group Company Lakshmi Precision Tools Limited. The export obligation pending as on 31.03.2011 is Rs.131.72 lakhs. Non fulfillment will entail payment of duty saved together with interest, the amount being indeterminant.

4. Some of the Debtors / Creditors accounts whose balances show a variance as compared to the Books of Accounts of the company are in the process of reconciliation. This however will not have any material impact on the profits for the year.

5. Figures have been rounded off to the nearest rupee.

6. The previous year's figures have been regrouped and reclassified wherever necessary to suit this year's presentation.

(B) RELATED PARTY DISCLOSURES FOR THE YEAR ENDED 31st MARCH, 2011

1) Relationships

Description of relationship Names of related parties

Other related parties Eshann Enterprises Ltd

Harshni Textiles Ltd

Integrated Electrical Controls India Limited Lakshmi Precision Tools Ltd Lakshmi Electrical Drives Limited Lakshmi Ring Travellers(CBE) Ltd Lakshmi Cargo Company Ltd Lakshmi Technology & Engineering Industries Ltd Lakshmi Life Sciences Limited LCC Cargo Holding Ltd Lakshmi Machine Works Ltd Mahalaxmi Engineering Holding Ltd Starline Travels Limited Titan HMG Paints India Ltd Venkata Varadhaa Agencies Limited

Key Management Personnel

Smt. Nethra J.S. Kumar

Managing Director


Mar 31, 2010

1. Secured Loans

a. Term Loan from Indian Bank availed by the Company have been secured by Equitable Mortgage of the Land and Buildings and Movable Machinery including Wind Mills.

b. Working Capital loans from Indian Bank and Bank of Baroda have been secured by the hypothecation of Raw Materials, Components, Work-in-progress, Finished Goods, Book Debts and all the movable assets pertaining to the current assets of the Company.

2. Contingent Liabilities and claims against the company not acknowledged as debts.

2009-10 2008-09 A](i) Estimated amount of contracts to be Executed (Amount in Rs.) (Amount in Rs.) on capital account and not provided for 6,981,310 2,431,200

(ii) Guarantees and Counter Guarantees executed by the Company 2,796,450 2,069,000

(iii) Letters of Credit 2,027,235 --

B] (i) Sales tax assessments have been completed upto financial year 2003 - 2004

(ii) The Companys appeal against demand for Sales Tax penalty of Rs.1.34 Lakhs for the financial year 1997-98 has been decided against the Company. However no provision is made as on 31.03.2010 in view of the waiver of penalty under the Tamilnadu Sales Tax (Settlement of Arrear) Scheme 2008.

3. Provision for Excise Duty amounting to Rs. 7,84,819/- for the uncleared stock of finished goods has been made in the accounts.

4. 2 Nos. of Engel make injection moulding machines were imported under EPCG Scheme during the financial year 2007-08. The entire export obligation of Rs.131.72 lakhs which is to be fulfilled on or before 30.01.2016 will be fulfilled by the Group Company Lakshmi Precision Tools Limited. The export obligation pending as on 31.03.2010 is Rs.131.72 lakhs. Non fulfillment will entail payment of duty saved together with interest, the amount being indeterminant.

5. Deferred Tax

(a) Out of the deferred tax liability created from General Reserve for the earlier years in 2001-02, Rs.17,43,684/- has been transferred to General Reserve on account of reversal.

6. Some of the Debtors / Creditors accounts whose balances show a variance as compared to the Books of Accounts of the company are in the process of reconciliation. This however will not have any material impact on the profits for the year.

7. Figures have been rounded off to the nearest rupee.

8. The previous years figures have been regrouped and reclassified wherever necessary to suit this years presentation.

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