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Notes to Accounts of Lakshmi Precision Screws Ltd.

Mar 31, 2015

(i) The liability towards gratuity is as certified by an actuary.

(ii) The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment. The liability is provided based on numbers of days of unutilized leave at each Balance Sheet date as certified by an Actuary.

a. Working capital limits from banks (secured)

(1) Working capital limits from consortium banks are from Canara Bank and State Bank of India in the ratio of 70:30 and are secured by way of pari passu first charge against hypothecation of entire chargeable current assets i.e stock and book debts (present and future) of the Company and pari passu second charge on fixed assets of the Company consisting of land and building, plant and machinary and other fixed assets including capital work in progress (present and future) and guaranteed by Directors of the Company and their relatives. Working capital limits from consortium banks are further secured by way of equitable mortgage of:

(i) Plant I & II of the Company

Property part of Khewal No 124/115, Khatoni No 171, Killa No 96/(713/2(3-8, 14/2 (10-3), 15/1(1-12)-17(9-4)-24(7-12) and Part of Khewat No 129/120, Khatoni No 183 min, Killa No 96(4/1(2-17)-7/3/1(4-1) situated at 8.5 lane Mile Stone,Village Totoli, Jind Road,Rohtak-124001 Haryana

Plant III of the Company

Plot No 153, Sector 3 IMT Manesar, Gurgaon-122050 Haryana measuring 4050 sq mtrs.

Packaging Unit of the Company

Plot No 257 Sector 6 IMT Manesar Gurgaon-122050, Haryana measuring 1800 sq mtrs.

Plant-IV of the Company

Part of Khewat No 141 Min. Khatoni No 176 Min, Killa No 122/1(5-4) and Part of Kheat No 140 Min, Khatoni No 175 Min Killa No 103/108 (8-0), 11(8-0), 20(8-0) and Part of Khewat No 103/1(8-0), 104(5/2(4-0), 5/3(2-0) and Part of Khewat No 140 N.H. 10 Near Sudhir Automotive NH-10, Kharwar Delhi Road, Rohtak 124001 Haryana, Measuring 45496 sq yards.

(ii) Property situated at adjacent LPS Plant-II and Near Canara Bank and Honda Showroom Hissar Road Industrial Area, Rohtak in the name of Smt. Sushila Devi Jain wife of Late Shri Bimal Prasad Jain measuring 10640 sq yards of land

(iii) Agriculture land part of Khewat no 97 Min, Khatoni no 117 Min. and Killa no 126/12/2/1(2-3) and part of Khewat no 90 Min, Khatoni No 103 Min and Killa no 126/19/2(7-13), 22/1(6-5) and Part of Kheat no 88/97 Min, Khatoni no 10 Min and Killa no 126/22/2(1-8) 23(8-0) and part of Khewat no 97 Min, Khatoni no 117 Min and Killa no 147/1/(8-0)3(6-17)4(7-7) and part of Khewat no 91 Min, Khatoni no 103 Min and Killa no 147/3 Min Northern 4-9 situated at near LPS Bossard and Kharwar village Rohtak Delhi Road NH 10, Village Kharwar, Distt Rohtak, Haryana measuring 46125 acres

(iv) First pari passu charge with other consortium members on Dies and Tools capitalized during financial year 2010-2011 and 2011-12.

(v) Exclusive charge on Dies and Tools capitalized during financial year 2012-13.

(1) Working capital limits from Corporation Bank Limited (outside consortium) are secured against equitable mortgage of Industrial plot measuring 16 Kanal 3 Marla situated in the Revenue Village Kutana, Tehsil & District Rohtak, Hayana in the name of the Company.

(2) Interest accrued and due Rs. 1708774/- (previous year 1708771/-) on Fixed Deposit from Directors and others remained unpaid as on the Balance

Sheet date.

b. Other loans and advances from a Company (unsecured)

(i) Other loans and advances are from Companies and repayable on demand.

Interest accrued and due Rs. 514110/- (previous year Rs760932/)- remained unpaid as on the Balance sheet date.

(i) Trade payables include payable to a subsidiary company Rs. 10097214/- (Previous Year Rs.8961869/-)

(ii) Information required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended 31st March, 2015. This information has been determined to the extent such parties have been identified on the basis of information available with the company.

(i) Investor Protection and Education Fund is being credited by the amount of unclaimed dividend after seven years from the due date. The company has transferred and deposited a sum of Rs. 427941/- (Previous year 216095/-) of unclaimed dividend pertaining to the F.Y. 2006-07 to Investor Education and Protection Fund of Central Government in accordance with the provision of section 205C of the Companies Act, 1956.

(ii) The Company has made a provision of Excise duty amounting Rs 50974629/- (previous year Rs. 50328743/-) payable on stocks of Finished and Scrap material. Excise duty is considered as an element of cost at the time of manufacture of goods.

(iii) Employees benefit expense includes Rs 4636000/- (Previous year Rs.6615000/-) payable to Directors of the Company.

(iv) Statutory dues are in respect of PF,ESI,Sales Tax, TDS, Service Tax, Withholding Tax, Income Tax, TCS, Labour Welfare Fund, Work Contract Tax, Professional Tax, Interest on TDS, Interest on Income Tax, Interest on Sales Tax, Interest on PF/ESI, R&D Cess and Excise Duty.

(v) Other payables include expenses payable, advance against sale of assets and other payables.

(vi) Other payables include Rs. 3211753/- (previous year Rs.1070754/-) payable to Directors of the Company.

(vii) Credit Balance with HDFC Bank Limited, Rohtak is due to uncashed cheques.

* Statutory dues are in respect of Income Tax and Wealth Tax.

* Includes Rs. 286196/- under statutory dues payable (Note no. 9)

Notes:

1 Depreciation has been provided as per useful life prescribed in Schedule II of Companies Act, 2013 as per written down value method except in case of Plant II, Manesar and Recoil Division where the depreciation has been provided on straight line method.

2 The addition in fixed assets include Rs. 36843267/- (Last year Rs.16730445) capitalized on account of borrowing costs in accordance with AS-16 "Borrowing Cost" issued by The Institute of Chartered Accountant of India.

3 Leasehold Offices Premises are in respect of office flats at Bangalore.

4 Freehold offices Premises are in respect of office flats at Mumbai and Delhi.

5 Plant & Machinery include capital expenditure of Rs. 12326476/- incurred during the year (Previous year Rs. 5963676/- ) on Research & Development.

*In terms of joint venture agreement entered into with Bossard AG, Switzerland on 26.06.1997, the Company has invested a sum of Rs.23520190/- in LPS Bossard Private Limited towards allotment of 2352019 Equity Shares of Rs.10/- each and a sum of Rs.1847490/- in LPS Bossard information Systems Private Limited towards allotment of 184749 equity shares of Rs. 10/- each, towards 49% holding in the aforesaid companies.

Inventories have been valued at lower of cost and net realizable value. Cost has been ascertained in case of Semi-finished goods at 66% less on price-list and finished goods have been valued at 57% less on price-list and special items have been valued at 31% less in case of semi-finished goods and 22% less in the case of finished goods of the selling price; since exact cost is not ascertainable. Excise duty payable on finished goods and scrap materials are shown separately as part of manufacturing cost and is included in the valuation of finished goods and scrap materials. Inventories are consumed on FIFO (First in First out) basis. Scrap material has been valued at net realizable value.

* Fixed deposits with banks include deposits of Rs. 31418179/- (Previous Year of Rs. 36641627/-) with maturity of more than 12 months. ** Unpaid dividends can be utilized only for payment of unpaid dividend liability.

Trade receivables includes

a) Rs 779216/- (previous year Rs. 271723/-) due from LPS Bossard Private Limited, a Joint Venture Company.

b) Rs 67880/- (previous year Rs. 7880) due from J C Fasteners Limited, an Associate Company.

c) Rs 448058/- (previous year Rs. 448058) due from Lakshmi Extrution Limited, an Associate Company.

d) Rs 8945990/- (previous year Rs. 7745249) due from Universal Precision Screws, a firm in which directors are partners.

e) Rs 129855/- (previous year Rs. 139019/-) due from LPS Industrial Supplies Pvt Ltd, an Associate company.

(ii) The balance with central excise department includes balance in central excise account at head office, duty paid on stocks lying at the branches and with consignees.

(i) Employee benefits expenses include managerial remuneration Rs. 3,73,80,000/- (previous year Rs. 4,48,50,000/-).

(ii) The managerial remuneration has been paid in terms of sanction from Central Government u/s 2(94), 2(78), 197 and 200 of the Companies Act, 2013, vide letters

(i) Interest received includes a sum of Rs. 6971282/- (previous year Rs.7725097/-) on bank deposits, Rs. 24048/- (previous year Rs. 90661/-) from trade customers, Rs. 930426/- (previous year Rs. 664590/-) on loans , and Rs. 2249035/- (previous year Rs. 2477645/-) on securities.

(ii) The Company has been sanctioned term loan of Rs. 25,00,00,000/- from Haryana State Industrial and Infrastructure Development Corporation Limited to be utilized for setting up plant at IMT, Rohtak. Out of the said loan, Haryana State Industrial and Infrastructure Development Corporation Limited has disbursed a sum of Rs. 23,13,51,000/- till the date of Balance Sheet, which has been utilized for the purpose for which it was sanctioned.

(iii) The Company has been disbursed a loan of Rs. 13605400/- from Intec Capital Limited for purchase of machinery. The Company has utilized the loan for the purpose it was sanctioned.

(iv) The Company has been sanctioned a term loan of Rs. 52198474/- from Karvy Financial Services Limited for working Capital Purposes. The same has been utilized for the purpose it was sanctioned.

(v) The Company has been sanctioned and disbursed a term loan of Rs.200000000/- from Hero Fincorp Limited for the purchase of equipment/Plant and Machinery. Out of the said loan, the Company has utilized a sum of Rs.114048736/- for the purpose it was sanctioned.

(vi) That there was a misappropriation of funds amounting to Rs.16059342/- by an employee of the Company in the earlier years. An FIR was lodged with City Police Station, Rohtak on 22.06.2006. Investigations are being conducted. The hearing was conducted on 02.05.2011 in the Court of Chief Judicial Magistrate, Rohtak for the purpose of checking of challan and framing of charges against the employee. The next hearing is due on 18th July 2015 for argument on charge, in the court of Chief Judicial Magistrate. The Company had also filed a civil suit for recovery before the Delhi High Court on 13/09/2006. The aforesaid amount has been debited to concerned employee and shown under Short term loans and advances. No provision for the same has been made since the Company expects to recover the entire amount.

(vii)(a)Till 31st March, 2014 depreciation was being provided on Written Down Value Method except in case of Plant-II, Manesar and Recoil Division where depreciation has been provided on Straight Line method as per the rates prescribed in Schedule XIV of the Companies Act, 1956. The Schedule XIV has been replaced by Schedule II of Companies Act, 2013 and depreciation has been charged on WDV method and straight line method respectively on the basis of useful lives of the assets in the manner as prescribed in Schedule II of the Companies Act, 2013.

(b)Till 31st March, 2014, the assets for a value not exceeding Rs. 5000/- were written off in the year of purchase as per Schedule XIV of the Companies Act, 1956. Schedule II of the Companies Act, 2013 does not recognise such a practice. The depreciation on the assets for a value not exceeding Rs. 5000/- has been provided on the basis of their useful lives in the manner as prescribed in the Schedule II of the Companies Act, 2013.

(viii) Interest and other borrowing costs amounting to Rs.36843267/- (previous year Rs.16730445/-) have been capitalized to the carrying cost of fixed assets and capital work in progress being financing costs directly attributable to the acquisition, construction or installation of the concerned qualifying assets till the date of its commercial use.

(ix) The Company has capitalized dies and tools amounting to Rs.21634049/- (previous year Rs.22313167/-) relating to dies and tools purchased/manufactured during the year.

(x) Segment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), "Accounting for Segment Reporting" issued by the Institute of Chartered Accountants of India.

Primary-Business Segment

The Company is in the business of manufacture of high tensile fasteners. Since the Company is operating in a single line of product, there are no reportable primary segments.

(xi) Confirmations from debtors and creditors and parties to whom loans and advance have been made are being obtained on a periodical basis. In respect of accounts under reconciliation, necessary entries will be passed on reconciliation of these accounts.

(xii) In the opinion of the Board, assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made.

* Net of Provision for doubtful receivables

(xiii) Related Party Transactions:

As per Accounting Standard No.18 issued by the Institute of Chartered Accountants of India, related parties in terms of the said Standard are disclosed below: -

(a) Names of Related parties and description of relationship:

1 Subsidiary i Indian Fasteners Limited

2 Enterprises where Directors exercises i Amit Screws Private Limited

sign cant influence: ii Hanumat Wire Udyog Private Limited

iii J C Fasteners Limited

iv LPS Bossard Private Limited (Joint Venture)

v LPS Bossard Information System Private Limited (Joint Venture)

vi Lakshmi Extrusion Limited

vii LPS Fasteners & Wires Private Limited

viii Nav Bharat Industries (Partnership Firm)

ix Nav Bharat Agencies (Partnership Firm)

x Shiv Industries (Partnership Firm)

xi Swadesh Engineering Industries (Partnership Firm)

xii Sudhir Automotive Industries Private Limited

xiii United Engineers (Partnership Firm)

xiv Universal Enterprises (Partnership Firm)

xv Universal Precision Screws (UPS) (Partnership Firm)

xv LPS Industrial Supplies Private Limited

3 Key Management Personnel i Shri Lalit Kumar Jain

ii Shri Dinesh Kumar Jain

iii Shri Vijay Kumar Jain

iv Shri Rajesh Jain

4 Relative of Key Management Personnel i Shri Sudesh KumarJain

ii Shri Nikhlesh Jain

iii Shri Amit Jain

iv Shri Gagan Jain

v Shri Gautam Jain

vi Shri Rahul Jain

vii Smt. Charul Jain

viii Smt. Rita Jain

ix Smt. Sushila Devi Jain

(xiv) In accordance with Accounting Standard 28 'Impairment of Assets' issued by the Institute of Chartered Accountants of India and made applicable from 1st day of April, 2004, the Company has assessed the potential generation of economic benefits from its business units as on the balance sheet date and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business; there is no indication to the contrary and accordingly, the management is of the view that no impairment provision is called for in these accounts.

Dened Benefit Plan

The employee's Gratuity Fund Scheme, which is defined benefit plan, is managed by Trust maintained with Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using 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

Notes:

1) The plan assets are maintained with Life Insurance Corporation of India (LIC).

2) The Company expects to contribute Rs. 50.00 lacs (previous year Rs. 35.00 lacs) to the plan during the next financial year.

3) The estimates of rate is escalation in salary's considered in actuarial valuation and other factors such as inflation seniority, promotion and other relevant factors including supply and demand in the employment market have been taken into account. The above information is certified by the actuary.

4) The expected rate of return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk, historical results of return on plan assets and the Company's policy for the plan assets management.

Notes:

1) The estimates of rate is escalation in salary's considered in actuarial valuation and other factors such as inflation seniority, promotion and other relevant factors including supply and demand in the employment market have been taken into account. The above information is certified by the actuary.

2) Since the liability is not funded, thereby information with regard to the plan assets has not been furnished. The estimates of rates of escalation in salary considered in actuarial valuation after taking into account inflation seniority, promotion and other relevant factors including supply and demand in the employment market.

Leave encashment:-

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

(xvi) Deferred tax assets in respect of timing differences capable of reversal in future and carried forward losses under the Income Tax Act 1961 has not been recognized in view of absence of virtual certainty supported by convincing evidence that sufficient taxable income will be available in future for reversal of deferred tax assets. The total deferred tax assets not recognized amounting to Rs. 120139276/- as on 31.03.2015.

(xvii) During the year, the Company has valued the inventory of finished goods at 57% and semi-finished goods at 66% less on the price-list and special items have been valued at 22% less in the case of finished goods of the selling price and 31% less in case of semi-finished goods. The exact cost of each item is not ascertainable in case of finished goods and semi-finished goods in view of multiple sizes and nature of products. However, the management believes that its impact on financial statements is not likely to be material on adoption of actual cost vis-a-vis the Standard Costing adopted by the Company. the Company plans to review its standard costing system based on the overall cost data every year.

(xviii) The Company is amortizing dies and tools on the basis of effective residual remaining life based on technical assessment conducted by a committee. However, the said assessment has not undertaken during the year and dies and tools have been amortized to the Statement of Profit and Loss as and when they are scrapped. Pending the technical assessment and determination of effective residual values of dies and tools, the impact of amortization thereof is not ascertainable and will be provided prospectively as and when the assessment is undertaken.

(xvix) As per the transfer pricing norms prescribed under section 92 of the Income Tax Act, 1961, the Company is required to use certain specified methods in computing arm's length price of international transactions and specified domestic transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate methods to be adopted will depend on the nature of transaction/ class of transaction, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of conducting a transfer pricing study for the current financial year. Accordingly, these financial statements do not include any adjustments for the transfer pricing implications, if any.

(xx) The Company has taken various residential/commercial premises under cancellable operating leases. There lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases.

(xxi) The figure of the previous year has been regrouped/rearranged wherever necessary to make them comparable with those of the current year.

(xxii) Figure have been rounded off to the nearest rupee.

(xxiii) Note No.1 to 30 form an integral part of the balance sheet and statement of profit and loss.


Mar 31, 2014

NOTE - 1

CONTINGENT LIABILITIES AND COMMITMEN TS

Contingent liabilities and commitments

(a) Contingent liabilities

1 Letter of credits and guarantees obtained from bank (Net of margin money) 151256824 79722194

2 Liabilities against legal undertakings/bonds executed in favour of DGFT on account of export obligation undertaken by the Company against Advance/ import licenses under EPCG Scheme. 56917398 66917398

3 Income Tax liabilities on account of appeals pending with various authorities 171667 7716673

(b) Commitments

1 Estimated amount of capital contracts remaining to be executed and not provided for (net of advances) 138018914 6829118

NOTE - 2

OTHER NOTES ON ACCOUNTS

(i) The Company has one following subsidiary as on 31.03.2014.

Name of Subsidiary: Indian Fasteners Limited

Country of Incorporation: India

Date of control: 24.12.1990

Nature: Subsidiary Company

Extent of control: 67.30%

(ii) The Company has been sanctioned term loan of Rs. 25,00,00,000/- from Haryana State Industrial and Infrastructure Development Corporation Limited to be utilised for setting up plant at IMT, Rohtak. Out of the said loan, Haryana State Industrial and Infrastructure Development Corporation Limited has disbursed a sum of Rs. 17,84,51,000/- as on the date of Balance Sheet, which has been utilised for the purpose for which it was sanctioned, except a sum of Rs. 132155/- lying in the current account to be utilised in the current year.

(iii) The Company has been sanctioned a term loan of Rs. 10,00,00,000/- from Hero Fincorp Limited for purchase of equipment/Plant and Machinery. Out of the said loan, Hero Fincorp Limited has disbursed a sum of Rs. 5,90,00,000/- as on the date of Balance Sheet, which has been utilised for the purpose for which it was sanctioned.

(iv) That there was a misappropriation of funds amounting to Rs.16059342/- by an employee of the Company in the earlier years. An FIR was lodged with City Police Station, Rohtak on 22.06.2006. Investigations are being conducted. The hearing was conducted on 02.05.2011 in the Court of Chief Judicial Magistrate, Rohtak for the purpose of checking of challan and framing of charges against the employee. The next hearing is due on 9th July 2014 for argument on charge, in the court of Chief Judicial Magistrate. The Company had also filed a civil suit for recovery before the Delhi High Court on 13/09/2006. The aforesaid amount has been debited to concerned employee and shown under Short term loans and advances. No provision for the same has been made since the Company expects to recover the entire amount.

(v) Interest and other borrowing costs amounting to Rs 16730445/- (previous year Rs. 6314538/-) have been capitalized to the carrying cost of fixed assets and capital work in progress being financing costs directly attributable to the acquisition, construction or installation of the concerned qualifying assets till the date of its commercial use.

(vi) The Company has capitalized dies and tools amounting to Rs. 22313167/- (previous year Rs. 29009177/-) relating to dies and tools purchased/ manufactured during the year.

(vii) Research and development expenses debited to the statement of profit and loss include the following:

(viii) Prior Period Items: The company has written off a sum of Rs. 9628697/- on account of excess provisions for export benefits for the financial years 2011-12 and 2012-13 in respect of Focus Product Scheme(FPS) and a sum of Rs. 2769688/- on account of excess provision for the financial year 2010-11 in respect of Status Holder Incentive Scheme(SHIS). The same has been treated as prior period items in accordance with AS-5 ''Net Profit or Loss for the period, prior period items and change in accounting Policies'' and treated accordingly in the statement of profit and loss.

(ix) Foreign currency exposures not hedged by the Company are as follows:-

(x) Confirmations from debtors and creditors and parties to whom loans and advance have been made are being obtained on a periodical basis. In respect of accounts under reconciliation, necessary entries will be passed on reconciliation of these accounts.

(xi) In the opinion of the Board, assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made.

(xiii) E arning per share- Basic and Diluted

(xiv) S egment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), "Accounting for Segment Reporting" issued by the Institute of Chartered Accountants of India.

Primary-Business Segment

The Company is in the business of manufacture of high tensile fasteners. Since the Company is operating in a single line of product, there are no reportable primary segments.

Secondary-Geographical Segment

The analysis of geographical segment is based on geographical location of the customers. The following is the distribution of Company''s consolidated revenue by geographical market, regardless of where the goods were produced.

As per Accounting Standard No.18 issued by the Institute of Chartered Accountants of India, related parties in terms of the said Standard are disclosed below: -

(a) Names of Related parties and description of relationship:

1 Subsidiary

i Indian Fasteners Limited

2 Enterprises where Directors exercises significant influence:

i Amit Screws Private Limited

ii Hanumat Wire Udyog Private Limited

iii J C Fasteners Limited

iv LPS Bossard Private Limited (Joint Venture)

v LPS Bossard Information System Private Limited (Joint Venture)

vi Lakshmi Extrusion Limited

vii LPS Fasteners & Wires Private Limited

viii Nav Bharat Industries (Partnership Firm)

ix Nav Bharat Agencies (Partnership Firm)

x Shiv Industries (Partnership Firm)

xi Swadesh Engineering Industries (Partnership Firm)

xii Sudhir Automotive Industries Private Limited

xiii United Engineers (Partnership Firm)

xiv Universal Enterprises (Partnership Firm)

xv Universal Precision Screws (UPS) (Partnership Firm)

xvi LPS Industrial Supplies Private Limited

3 Key Management Personnel

i Shri Lalit Kumar Jain

ii Shri Dinesh Kumar Jain

iii Shri Vijay Kumar Jain

iv Shri Rajesh Jain

4 Relative of Key Management Personnel

i Shri Sudesh KumarJain

ii Shri Nikhlesh Jain

iii Shri Amit Jain

iv Shri Gagan Jain

v Shri Gautam Jain

vi Shri Rahul Jain

vii Smt. Charul Jain

viii Smt. Rita Jain

ix Smt. Deepa Jain

x Smt. Sushila Devi Jain

(xvi) In accordance with Accounting Standard 28 ''Impairment of Assets'' issued by the Institute of Chartered Accountants of India and made applicable from 1st day of April, 2004, the Company has assessed the potential generation of economic benefits from its business units as on the balance sheet date and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business; there is no indication to the contrary and accordingly, the management is of the view that no impairment provision is called for in these accounts.

(xvii) Disclosure in respect of Company''s joint ventures in India pursuant to Accounting Standard 27, ''''Financial Reporting of Interest in Joint Ventures'''':

(i) a) Name of the Venture LPS Bossard Pvt. Ltd.

b) Country of Incorporation India

c) Proportion of ownership interest as at March 31,2014 49%

d) The aggregate of Company''s share in the above ventures in:

(xviii) The Company has obtained acturial valuation in respect of liability towards Gratuity and Leave Encashment in accordance with AS-15 ''Employee Benefits'' notified under the Companies (Accounting Standards) Rules, 2006 (as amended). A sum of Rs. 180807588/- and 44224758/-has been debited in the statement of Profit and Loss towards Gratuity Liability and Leave Encashment respectively towards past service liability which has been fully amortised in view of average working period of employees being more than 5 years. The said liability has arisen due to first time adoption of actuarial valuation of Gratuity and Leave Encashment as prescribed under AS-15 ''Employee Benefits'' and therefore has been debited to Employee benefit expenses and not been treated as an exceptional item.

As per Accounting Standard 15 "Employee Benefits", the disclosures of Employees benefits as defined in the Accounting Standard are given below: Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized as an expense for the year are as under:

Defined Benefit Plan

The employee''s Gratuity Fund Scheme, which is defined benefit plan, is managed by Trust maintained with Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using 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 data has been given for the current year only as the acturial valuation has been adopted for the first time in accordance with AS-15 "Employees Benefits" issued by the Institute of Chartered Accountants of India.

* The data has been given for the current year only as the acturial valuation has been adopted for the first time in accordance with AS-15 "Employees Benefits" issued by the Institute of Chartered Accountants of India.

(xix) During the year, the Company has valued the inventory of finished goods at 57% (earlier 55%) and semi-finished goods at 66% (earlier 65%) less on the price-list and special items have been valued at 22% (earlier 20%) less in the case of finished goods of the selling price and 31% (earlier 30%) less in case of semi-finished goods. The cost has been reviewed in light of overall cost data and Gross Margin in case of finished goods. Due to this, inventories of finished goods have decreased by Rs. 20947082/- and semi-finished goods by Rs. 18883848/- The exact cost of each item is not ascertainable in case of finished goods and semi-finished goods in view of multiple sizes and nature of products. However, the management believes that its impact on financial statements is not likely to be material on adoption of actual cost vis-a-vis the Standard Costing adopted by the Company. the Company plans to review its standard costing system based on the overall cost data every year.

(xx) The Company has revised its accounting policy of amortisation of dies and tools. In the earlier years, the same was charged to statement of profit and loss account when the dies were scrapped and discarded from actual use. During the current year, the company has assessed the residual remaining life of dies and tools based on report of technical committee and amortised the same on the basis of effective remaining residual life of dies. Due to this the amortisation of dies and tools has increased by Rs. 27556298/-. in the current year.

The Company propose to undertake technical assessment of dies and tools at the end of every quarter and amortise the dies and tools accordingly.

(xxvi) As per the transfer pricing norms prescribed under section 92 of the Income Tax Act, 1961, the Company is required to use certain specified methods in computing arm''s length price of international transactions and specified domestic transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate methods to be adopted will depend on the nature of transaction/ class of transaction, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of conducting a transfer pricing study for the current financial year. Accordingly, these financial statements do not include any adjustments for the transfer pricing implications, if any.

(xxvii) The Company has taken various residential/commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases.

(xxviii) The Company has also taken few commercial premises under non-cancellable operating leases. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. Normally there are renewal and escalation clauses in these contracts. The total of future minim um lease payments in respect of such leases are as follows:

(xxix) The figure of the previous year has been regrouped/rearranged wherever necessary to make them comparable with those of the current year.

(xxx) Figure have been rounded off to the nearest rupee.

(xxxi) Note No.1 to 31 form an integral part of the balance sheet and statement of profit and loss.


Mar 31, 2013

(i) The Company has one following subsidiary as on 31.03.2013.

Name of Subsidiary: Indian Fasteners Limited

Country of Incorporation: India

Date of control: 24.12.1990

Nature: Subsidiary Company

Extent of control: 67.30%

(ii) Foreign currency loan from ICICI Bank Limited as at the end of the year has been translated at the prevailing rate of exchange as on the date of balance sheet. Consequent to realignment of the value of foreign currency loan, the rupee liability of the Company has increased by Rs. 2259727/- Out of the said exchange loss, a sum of Rs. 1501815/- has been adjusted to the carrying cost of fi xed assets and the balance sum of Rs 757913/- has been credited to the Foreign Currency Monetary Item Translation Difference Account in accordance with Accounting Standard 11 (AS-11) as amended vide notifi cation no.G.S.R 225 (E) dated 31.03.2009 and further amended by notifi cation dated 11.05.11 issued by the Ministry of Corporate Affairs.

(iii) The Company has been sanctioned a term loan of Rs. 50000000/- by Canara Bank Limited ,to be utilized for purchase of accessories of machines and dies and tools, out of which the bank has disbursed a sum of Rs. 5680000/- till the date of Balance Sheet. The same is lying unutilised as at the end of the year and shall be utilized for the purpose for which it was sanctioned in the current year.

(iv) That there was a misappropriation of funds amounting to Rs.16059342/- by an employee of the Company in the earlier years. An FIR was lodged with City Police Station, Rohtak on 22.06.2006. Investigations are being conducted. The hearing was conducted on 02.05.2011 in the Court of Chief Judicial Magistrate, Rohtak for the purpose of checking of challan and framing of charges against the employee. The next hearing is due on 6th July, 2013 for argument on charge, in the court of Chief Judicial Magistrate. The Company had also fi led a civil suit for recovery before the Delhi High Court on 13.09.2006. The aforesaid amount has been debited to concerned employee and shown under Short term loans and advances. No provision for the same has been made since the Company expects to recover the entire amount.

(v) Interest and other borrowing costs amounting to Rs.6314538/- (previous year Rs. 34320709/-) have been capitalized to the carrying cost of fi xed assets and capital work in progress being fi nancing costs directly attributable to the acquisition, construction or installation of the concerned qualifying assets till the date of its commercial use.

(vi) The Company has capitalized dies and tools amounting to Rs.29009177/- (previous year Rs. 45865408/-) relating to dies and tools purchased/ manufactured during the year.

(vii) Research and development expenses debited to the statement of profi t and loss include the following:

(viii) Prior Period Items: The Company has recognised an income in respect of export incentives relating to Status Holders Incentive Scheme (SHIS) for the fi nancial Year 2009-10, 2010-11 & 2011-12 amounting to Rs.14871472/- and written off a sum of Rs.7172294/- in respect of excess provision of export incentives relating to Focus Product Scheme (FPS) in earlier years . The same has been treated as prior period items in accordance with AS-5 ''Net Profi t or Loss for the period, prior period items and change in accounting Polices'' and treated accordingly in the statement of profi t and loss.

(ix) Foreign currency exposures not hedged by the Company are as follows:-

(x) Confi rmations from debtors and creditors and parties to whom loans and advance have been made are being obtained on a periodical basis. In respect of accounts under reconciliation, necessary entries will be passed on reconciliation of these accounts.

(xi) The Company has taken various residential/commercial premises under cancellable operating lease for a period not exceeding one year. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. Lease payments recognised in the statement of profi t and loss as an expense for the year is Rs.5819947/- (Previous year Rs.5825256/-).

(xii) In the opinion of the Board, assets other than fi xed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made.

(xiii) Segment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), "Accounting for Segment Reporting" issued by the Institute of Chartered Accountants of India.

Primary-Business Segment

The Company is in the business of manufacture of high tensile fasteners. Since the Company is operating in a single line of product, there are no reportable primary segments.

Secondary-Geographical Segment

The analysis of geographical segment is based on geographical location of the customers. The following is the distribution of Company''s consolidated revenue by geographical market, regardless of where the goods were produced.

(xiv) Related Party Transactions:

As per Accounting Standard No.18 issued by the Institute of Chartered Accountants of India, related parties in terms of the said standard are disclosed below: -

(a) Names of Related parties and description of relationship:

1 Subsidiary i Indian Fasteners Limited

2 Enterprises where Directors exercises signifi cant infl uence:

i Amit Screws Private Limited

ii Hanumat Wire Udyog Private Limited

iii J C Fasteners Limited

iv LPS Bossard Private Limited (Joint Venture)

v LPS Bossard Information System Private Limited (Joint Venture)

vi Lakshmi Extrusion Limited

vii LPS Fasteners & Wires Private Limited

viii Nav Bharat Industries

ix Nav Bharat Agencies

x Shiv Industries

xi Swadesh Engineering Industries

xii Sudhir Automotive Industries Private Limited

xiii United Engineers

xiv Universal Enterprises

xv Universal Precision Screws (UPS)

3 Key Management Personnel i Shri Lalit Kumar Jain

ii Shri Dinesh Kumar Jain

iii Shri Vijay Kumar Jain

iv Shri Rajesh Jain

v Smt. Sushila Devi Jain

4 Relative of Key Management Personnel i Shri Sudesh KumarJain

ii Shri Nikhlesh Jain

iii Shri Amit Jain

iv Shri Gagan Jain

v Shri Gautam Jain

vi Shri Rahul Jain

vii Smt.Charul Jain

viii Smt. Rita Jain

ix Smt. Deepa Jain

(xv) In accordance with Accounting Standard 28 ''Impairment of Assets'' issued by the Institute of Chartered Accountants of India and made applicable from 1st day of April, 2004, the Company has assessed the potential generation of economic benefi ts from its business units as on the balance sheet date and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business; there is no indication to the contrary and accordingly, the management is of the view that no impairment provision is called for in these accounts.

(xvi) Disclosure in respect of Company''s joint ventures in India pursuant to Accounting Standard 27, ''''Financial Reporting of Interest in Joint Ventures'''':

(i) a) Name of the Venture LPS Bossard Pvt. Ltd.

b) Country of Incorporation India

c) Proportion of ownership interest as at March 31, 2013 49%

d) The aggregate of Company''s share in the above ventures in:

Defined Benefit Plan

The employee''s Gratuity Fund Scheme, which is defi ned benefi t plan, is managed by Trust maintained with Life Insurance Corporation of India (LIC). The Company could not obtain actuarial valuation in respect of provision for gratuity liability and leave encashment payable to its employees. The impact of liability on this account, is therefore not ascertainable and not provided for. In absence of actuarial valuation, The disclosures as required by AS-15 ''Employee Benefi ts'' are not furnished in their entirety.

(xvii) Inventories are valued at lower of cost and net realizable value. However, since exact cost is not ascertainable, semi-fi nished goods have been valued at 65% less on the price- list and fi nished goods have been valued at 55% less on the price-list and special items have been valued at 30% less in case of semi-fi nished goods and 20% less in the case of fi nished goods of the selling price. The stocks will be valued on actual cost basis on implementation of detailed cost records. The impact, if any, on fi nancial statements on valuation of stocks on actual cost basis shall be provided for as and when ascertained.

(xviii) The cost of dies and tools are charged to statement of profi t and loss as and when scrapped. The Company is reviewing the policy to charge the cost of dies and tools in a systematic manner depending upon their useful lives. The impact of such change on the fi nancial statements is not ascertainable and hence not provided for.

(xix) As per the transfer pricing norms prescribed under section 92 of the Income Tax Act, 1961, the Company is required to use certain specifi ed methods in computing arm''s length price of international transactions and specifi ed domestic transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate methods to be adopted will depend on the nature of transaction/ class of transaction, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of conducting a transfer pricing study for the current fi nancial year. Accordingly, these fi nancial statements do not include any adjustments for the transfer pricing implications, if any.

(xx) The fi gures for the previous year has been regrouped/rearranged wherever necessary to make them comparable with those of the current year.

(xxi) Figures have been rounded off to the nearest rupee.

(xxii) Note No.1 to 31 form an integral part of the balance sheet and statement of profit and loss.


Mar 31, 2012

A. Terms/right attached to equity shares:

The Company has issued equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share dividend recognized as distributions to equity shareholders is Rs.1.50 (Previous Year Rs.1.50)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assests of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

*Pursuant to Notification no: G.S.R 225(E) dated 31st March, 2009 and as amended by notification dated 11th May, 2011 issued by the Ministry of Corporate Affairs, the Company has opted to apply the prescribed treatment in respect of exchange rate variation arising on long term foreign currency monetary items. Accordingly exchange rate variation arising out of reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital assets, are added to or deducted from the cost of the assets and depreciated over the balance life of the asset, and in other cases accumulated in a Foreign Currency Monetary Item Translation Difference Account:, and amortized over the balance period of such long term asset/liability by recognition as income or expense in each of such period. Out of total exchange loss of Rs.13112115/- arising on aforesaid long term foreign currency monetary items, a sum of Rs.8714312/- has been deducted from the cost of fixed assets and a sum of Rs.4397803/- has been transferred to Foreign Monetary Items Translation Difference account. A sum of Rs.2619364/- has been amortized in the Statement of Profit and loss in accordance with the remaining period of the long term liability.

(i) Period and amount overdue and unpaid as on the Balance Sheet date:

a) Out of instalment of $333000 due on 21.03.2012 in respect of foreign currency term loan(ECB) from ICICI Bank Ltd, a sum of $ 176250 remains unpaid as on 31.03.2012

b) Interest accrued and due Rs.1784687/- remain unpaid as on the date of Balance Sheet.

a. Term Loans from other parties (secured)

a) Term Loan from Intec Capital Limited is secured to the extent of cash collateral security of Rs. 5460000/- and has been shown under the secured term loan from other parties and balance under unsecured term loan from other parties in note no. 4(d).

b. Deferred Payment Liabilities:

(i) Deferred payment credits from Haryana State Industrial & Infrastructure Development Corporation Limited (HSIIDC) are secured against the properties as under:

1. Plot no. 153, Sector 3 at IMT Manesar, Gurgaon

2. Plot no. 257, Sector 6 at IMT Manesar, Gurgaon

3. Working Housing unit at IMT Manesar, Gurgaon

4. Dormitory House at IMT Manesar, Gurgaon

5. Plot no. 4, Sector 30B at IMT Rohtak

a) The above properties shall continue to belong to HSIIDC until and unless the full price of the properties with interest and other amount, if any, due to HSIIDC is paid by the Company.

b) On the payment of total price of the properties, the HSIIDC would execute a deed of conveyance in favour of the Company.

(i) The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment. The liability is provided based on numbers of days of unutilized leave at each Balance Sheet date.

(ii) The shortfall in liability, if any, on ascertainment of liability by an independent actuary, will be provided for on the basis of actuarial valuation certificate when obtained.

a. Working capital limits from banks (secured)

1) Working capital limits are in consortium with Canara Bank and State Bank of India in the ratio of 70:30 and are secured by way of pari passu first charge against hypothecation of entire chargeable current assets i.e stock and book debts (present and future) of the Company and pari passu second charge on fixed assets of the Company consisting of land and building, plant and machinery and other fixed assets including capital work in progress (present and future) and guaranteed by some of Directors of the Company and their relatives.

Working capital limits from consortium banks are further secured by way of equitable mortgage of:

# Second pari passu charge on 10640 square yards of Land and Building standing in the name of Smt. Sushila Devi Jain, Director of the Company, situated at NH - 10, Hissar Road, Rohtak.

# Second pari passu charge on Land and Building 4.6125 acres situated at Mauza Kharawar, Tehsil - Sampla, District - Rohtak, Haryana in the name of Shri Nikhlesh Jain and Shri Saurabh Jain

# Second pari passu charge with working capital consortium members on Dies and Tools capitalised during financial year 2010-2011

b. other loans and advances from a company (unsecured)

(i) Other loans and advances received from a Company are repayable on demand.

(ii) Interest accrued and due Rs.738221/- remained unpaid as on the Balance sheet date.

(i) Trade payables include acceptances Rs.118689908/- (Previous Year Rs.91782556/-)

(ii) Trade payables include payable to a subsidiary company Rs. 4913910/- (Previous Year Rs.3731492/-)

(ii) The Company has made a provision of Excise duty amounting Rs.47615531/- (previous year Rs.32334578/-) payable on stocks of Finished and Scrap material. Excise duty is considered as an element of cost at the time of manufacture of goods.

(iii) Employees benefit expense includes Rs.16831400/- (Previous year Rs.902200/-) payable to Directors of the Company.

(iv) Other payables include Rs.175186/- (previous year Rs.175186/-) payable to a Director of the Company.

(v) Statutory dues are in respect of PF, ESI, Sales Tax and TDS.

(vi) Other payables include expenses payable and other liabilities.

Notes:

1 Depreciation has been provided on rates as per Schedule XIV of the Companies Act,1956 on WDV basis except in case of Plant-II, Manesar Plants and Recoil Division where depreciation has been provided on straight line method.

2 Depreciation on assets for a value not exceeding Rs.5000/- has been provided @100%.

3 Addition in fixed assets include Rs.34320709/- (last year Rs.15912144/-) capitalised on account of borrowing costs in accordance with AS-16 "Borrowing Cost"' issued by Institute of Chartered Accountants of India.

4 Leasehold Offices Premises are in respect of office flats at Bangalore.

5 Freehold Offices Premises are in respect of office flats at Mumbai and Delhi.

6 A sum of Rs.8714321/- on account of exchange loss incurred during the year has been adjusted in Plant and Machinery in accordance with notification no. G.S.R. 225(E) dated 31.03.2009 as amended vide notification dated 11.05.2011, issued by Ministry of Corporate Affairs.

7 Plant and Machinery include capital expenditure of Rs.25822374/- incurred during the year and Rs.20195483/- incurred during the previous year on research and development.

8 Title Deeds in respect of lands acquired from HSIIDC, have not been yet executed. As per the terms of letters of allotment, the same will be executed after the full payment to HSIIDC.

Inventories have been valued at lower of cost and net realizable value. Cost has been ascertained in case of Semi-finished goods at 65% less price-list and finished goods have been valued at 55% less price-list and special items have been valued at 30% less in case of semi-finished goods and 20% less in the case of finished goods of the selling price; since exact cost is not ascertainable. Excise duty payable on finished goods and scrap materials are shown separately as part of manufacturing cost and is included in the valuation of finished goods and scrap materials. Inventories are consumed on FIFO (First in First out) basis. Scrap material has been valued at net realisable value.

note - 1

contingent liabilities and commitments

Contingent liabilities and commitments

(a) Contingent liabilities

1 Letter of credits and guarantees obtained from bank (Net of margin money) H 135637867 2456447 -138094314 112585617

2 Liabilities against legal undertakings/bonds executed in favour of DGFT on account of export obligation undertaken by the Company against Advance/ import licenses under EPCG Scheme. 66917098 - - 66917098 53209439

3 Income Tax liabilities on account of appeals pending with various authorities 7716673 - - 7716673 7716673

4 Liabilities on account of suits filed against the Company in the Labour Courts/ESI Corporation/ Civil Courts 239980 - - 239980 460517

(b) Commitments

1 Estimated amount of capital contracts remaining to be executed and not provided for (net of advances) 21766520 - - 21766520 39587317

note - 2

other notes on accounts

(i) The Company has one following subsidiary as on 31.03.2012.

Name of Subsidiary: Indian Fasteners Limited

Country of Incorporation: India

Date of control: 24.12.1990

Nature: Subsidiary Company

Extent of control: 67.30%

(ii) Foreign currency loan from ICICI Bank Limited as at the end of the year has been translated at the prevailing rate of exchange as on the date of balance sheet. Consequent to realignment of the value of foreign currency loan, the rupee liability of the Company has increased by Rs.9263033/-. Out of the said exchange loss, a sum of Rs.6156212/- has been adjusted to the carrying cost of fixed assets and the balance sum of Rs. 3106821/- has been credited to the Foreign Currency Monetary Item Translation Difference Account in accordance with Accounting Standard 11 (AS-11) as amended vide notification no.G.S.R 225 (E) dated 31.03.2009 and further amended by notification dated 11.05.11 issued by the Ministry of Corporate Affairs.

(iii) The Company has been sanctioned a term loan of Rs.50000000/- by Canara Bank Limited, to be utilized for working capital requirements, out of which the bank has disbursed a sum of Rs.40100441/- The same has been utilized for the purpose for which it was sanctioned and there are no amounts lying unutilized as at the end of the year.

(iv) The Company has been sanctioned a term loan of Rs. 45000000/- by State Bank of India, to be utilized for working capital requirements, out of which the bank has disbursed a sum of Rs. 45000000/-. The same has been utilized for the purpose for which it was sanctioned and there are no amounts lying unutilized as at the end of the year.

(v) That there was a misappropriation of funds amounting to Rs.16059342/- by an employee of the Company in the earlier years. An FIR was lodged with City Police Station, Rohtak on 22.06.2006. Investigations are being conducted. The hearing was conducted on 02.05.2011 in the Court of Chief Judicial Magistrate, Rohtak for the purpose of checking of challan and framing of charges against the employee. The next hearing is due on 05.07.2012 for argument on charge, in the court of Chief Judicial Magistrate. The Company had also filed a civil suit for recovery before the Delhi High Court on 13.09.2006. The aforesaid amount has been debited to concerned employee and shown under Short term loans and advances. No provision for the same has been made since the Company expects to recover the entire amount.

(vi) Interest and other borrowing costs amounting to Rs.34320709/- (previous year Rs.15912144/-) have been capitalized to the carrying cost of fixed assets and capital work in progress being financing costs directly attributable to the acquisition, construction or installation of the concerned qualifying assets till the date of its commercial use.

(vii) The Company has capitalized dies and tools amounting to Rs.45865408/- (previous year Rs.30039429/-) relating to dies and tools purchased/ manufactured during the year.

(viii) Research and development expenses debited to the statement of profit and loss include the following:

(x) Confirmations from debtors and creditors and parties to whom loans and advance have been made are being obtained on a periodical basis. In respect of accounts under reconciliation, necessary entries will be passed on reconciliation of these accounts.

(xi) The Company has taken various residential/commercial premises under cancellable operating lease for a period not exceeding one year. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases.

Lease payments recognised in the statement of profit and loss as an expense for the year is Rs. 5825256/- (Previous year Rs.5508024/-).

(xii) In the opinion of the Board, any of the assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

(xiv) Segment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), "Accounting for Segment Reporting" issued by the Institute of Chartered Accountants of India.

Primary-Business Segment

The Company is in the business of manufacture of high tensile fasteners. Since the Company is operating in a single line of product, there are no reportable primary segments.

Secondary-Geographical Segment

The analysis of geographical segment is based on geographical location of the customers. The following is the distribution of Company's consolidated revenue by geographical market, regardless of where the goods were produced.

(xvi) In accordance with Accounting Standard 28 'Impairment of Assets' issued by the Institute of Chartered Accountants of India and made applicable from 1st day of April, 2004, the Company has assessed the potential generation of economic benefits from its business units as on the balance sheet date and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business; there is no indication to the contrary and accordingly, the management is of the view that no impairment provision is called for in these accounts.

Defined Benefit Plan

The employee's Gratuity Fund Scheme, which is defined benefit plan, is managed by Trust maintained with Life Insurance Corporation of India (LIC). The Company could not obtain actuarial valuation in respect of provision for gratuity liability and leave encashment payable to its employees. The impact of liability on this account, is therefore not ascertainable and not provided for. In absence of actuarial valuation, The disclosures as required by AS-15 'Employee Benefits' are not furnished in their entirety.

(xix) Inventories are valued at lower of cost and net realizable value. However, since exact cost is not ascertainable, semi-finished goods have been valued at 65% less on the price- list and finished goods have been valued at 55% less on the price-list and special items have been valued at 30% less in case of semi-finished goods and 20% less in the case of finished goods of the selling price. The company is under the process of implementing the maintenance of cost records and the exact cost will be ascertained on maintenance of the said cost records.

(xx) Dies carried as inventories are amortized as a charge to the statement of profit and loss when they are scrapped from active use. The Company is reviewing the policy to charge off consumption of dies on a systematic basis over their useful period of lives. Pending such change in policy, the impact, if any, on the financial statements is not ascertainable and hence cannot be provided for.

(xxvi) Till the year ended 31st March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.

(xxvii) Figures have been rounded off to the nearest rupee.

(xxviii) Note No.1 to 31 form an integral part of the balance sheet and statement of profit and loss.


Mar 31, 2011

A) CONTINGENT LIABILITIES:

(Lac/Rs.)

Sr. Particulars MBBT 2010-11 2009-10 No.

1. Estimated amount of capital contracts remaining to be executed and not provided for (net of advances) 396 452

2. Letter of credits and guarantees obtained from bank (Net of margin money) 1097 590

3. Liabilities against legal undertakings/ bonds executed in favour of DGFT on account of export 532 441 obligation undertaken by the Company against Advance/Import licenses under EPCG Scheme.

4. Income Tax liabilities on account of appeals pending with various authorities. 77 77

5. Liabilities on account of suits filed against the Company in the Labour Court/ ESI Corporation. 5 5

C) NOTES:

1. The Company has following subsidiary as on 31.03.2011.

Name of Subsidiary : Indian Fasteners Limited

Country of Incorporation : India

Date of control : 24.12.1990

Nature : Subsidiary Company

Extent of control : 67.295%

2. a) IDBI Bank Limited has disbursed a term loan of Rs.1935.74 lacs as on the date of Balance Sheet against the sanctioned amount of Rs.2000 lacs to be utilized towards capital expenditure at the existing units of the Company. The same has been utilized for the purpose for which it was sanctioned and a sum of Rs. 144.98 lacs is lying unutilized as at the end of the year on this account.

b) The Company has been sanctioned a term loan of Rs.1500 lacs by the Canara Bank and IDBI Bank Limited in consortium in the ratio of 70:30 respectively to be utilized for working capital requirements, out of which Canara Bank has disbursed of a sum of Rs.1050 lacs. The same has been utilized for the purpose for which it was sanctioned and there are no amounts lying unutilized as at the end of the year.

c) Foreign currency loan from ICICI Bank Limited as at the end of the year has been translated at the prevailing rate of exchange as on the date of balance sheet. Consequent to realignment of the value of foreign currency loan, the rupee liability of the Company has decreased by Rs.6.36 lacs. Out of the said exchange gain, a sum of Rs.4.23 lacs has been adjusted to the carrying cost of fixed assets and the balance sum of Rs.2.13 lacs has been credited to the Foreign Currency Monetary Item Translation Difference Account in accordance with Accounting Standard 11 (AS-11) as amended vide notification no.G.S.R 225 (E) dated 31.03.2009 and further amended by notification dated 11.05.11 issued by the Ministry of Corporate Affairs.

3. In terms of joint venture agreement entered into with Bossard AG, Switzerland on 26.06.1997, the Company has invested a sum of Rs.2,35,20,190/- in LPS Bossard Private Limited towards allotment of 23,52,019 Equity Shares of Rs.10/- each and a sum of Rs.18,47,490/- in LPS Bossard Information Systems Private Limited towards allotment of 1,84,749 Equity Shares of Rs.10/- each, towards 49% holding in the aforesaid Companies.

4. Fixed deposits from public include a sum of Rs. 1,23,50,000/- due to Directors (previous year Rs.1,23,50,000/-).

5. There is a change in accounting policy with regard to accounting treatment of Dies and Tools. A sum of Rs.25,02,30,200/- has been capitalized from inventories representing dies and tools having a useful life of more than three years and depreciation has been charged accordingly.

The Company has adopted the policy of providing depreciation on aforesaid tools and dies capitalized, with a view to provide more appropriate and reliable information. Due to such change profit for the year ended 31st March, 2011 is lower by Rs.1,61,849/-.The said change in policy is not likely to have a material impact in future periods.

6. The Company has capitalized dies and tools amounting to Rs.3,00,39,429./-(Previous year Rs.2,15,71,784/-) relating to dies and tools purchased/ manufactured during the year.

7. Sundry Debtors include a sum of Rs. 1,28,38,653/- due from LPS Bossard Private Limited, a Joint Venture Company (maximum due during the year Rs.2,43,37,892/-) (previous year due Rs.1,53,31,641/- and maximum due Rs.3,43,75,355/-).

8. a) Advances recoverable in cash or in kind or for value to be received, include a sum of Rs.69,96,685/- due from Lakshmi Extrusion limited, an associate Company (Maximum due Rs.89,93,709/-) (previous year due Rs.44,96,073/- and maximum due Rs.57,82,621/-).

b) Advances recoverable in cash or in kind or for value to be received, includes a sum of Rs.3,77,488/- due from J.C Fasteners Limited, an associate Company (Maximum due Rs.3,77,448/-) (previous year due Rs.nil and maximum due Rs.nil).

9. That there was a misappropriation of funds amounting to Rs. 1,60,59,342/- by an employee of the Company in the earlier years. An FIR was lodged with City Police Station, Rohtak on 22.06.2006. Investigations are being conducted. The hearing was conducted on 02.05.2011 in the Court of Chief Judicial Magistrate, Rohtak for the purpose of checking of challan (police report file) and framing of charges against the employee. The next hearing is due on 07.07.2011 in the court of Chief Judicial Magistrate. The Company had also filed a civil suit for recovery before the Delhi High Court on 13.09.2006. The aforesaid amount has been debited to concerned employee and shown under loans and advances. No provision for the same has been made since the Company expects to recover the entire amount.

10. That the balance of Rs.2,33,35,811/- with central excise department as on 31.03.2011 includes balance in central excise account at head office, duty paid on stocks lying at the branches and with consignees.

11. The Company has made a provision of Excise duty amounting Rs.3,23,34,578/- (Previous Year Rs.3,69,45,535/-) payable on stocks of Finished and Scrap material. Excise duty is considered as an element of cost at the time of manufacture of goods.

12. a) Sundry creditors include:

i) Rs.23,65,92,783/- (previous year Rs.23,21,07,035/-) on account of letter of credits on 180 days'sight issued by Canara Bank, which are not due for payment on the date of Balance Sheet.

ii) Rs.6,53,01,093/- (previous year Rs.6,90,54,674/-) on account of, letter of credits on 180 days' sight issued by Indian Overseas Bank, which are not due for payment on the date of Balance Sheet.

iii) Rs.37,31,492/- (previous year Rs.34,07,816/-) payable to Indian Fasteners Ltd., a subsidiary Company.

iv) Rs.1,75,186/- payable to Directors of the Company (previous year Rs. 1,75,186/-).

b) Other liabilities include Rs.9,02,200/-(previous year Rs.10,57,200/-) payable to directors on account of salaries.

c) Information required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006/MSMED Act' for the year ended 31st March, 2011. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

13. Prior period items represents a sum of Rs.40,12,186/- and Rs.69,38,451/- credited to the profit and loss account on account of FPS (Focus Product Scheme) entitlement in terms of Para 3.15 of Foreign Trade Policy 2009-14 for the financial years 2008-09 and 2009-10 respectively. The same has been ascertained and provided during the year.

14. As per Accounting Standard 15 "Employee Benefits", the disclosures of Employees benefits as defined in the Accounting Standard are given below:

Defined Benefit Plan

a) The employee's Gratuity Fund Scheme, which is a defined benefit plan, is managed by Trust maintained with Life Insurance Corporation of India (LIC). During the year ended 31st March, 2011, the Company has provided a gratuity liability of Rs.55,41,719/- and paid a sum of Rs.54,62,816/- to the Life Insurance Corporation of India and debited a sum of Rs.1,10,04,535/- to the Profit and Loss account.

The Company has provided the gratuity liability of Rs.25,41,719/- in respect of Plant II and Manesar Unit on the basis of actuarial valuation certificate, while the gratuity liability in respect of other units has been provided at Rs.30 lacs on estimate basis. The disclosure as required by Accounting Standard 15, 'Employee Benefits' issued by the Institute of Chartered Accountants of India in respect of Plant II and Manesar Unit is as follows:

The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for the plan assets management.

The disclosure requirement in respect of other plants as required by Accounting Standard 15, 'Employee Benefits' has not been given and the shortfall in the gratuity liability (if any), will be provided on receipt of actuarial valuation certificate.

b) The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment. The liability is provided based on numbers of days of unutilized leave at each Balance Sheet date.

The shortfall in liability, if any, on ascertainment of liability by an independent actuary, will be provided for on the basis of actuarial valuation certificate when obtained.

15. Interest and other borrowing costs amounting to Rs. 1,59,12,144/- (previous year Rs. 1,15,56,381/-) have been capitalized to the carrying cost of fixed assets and capital work in progress being financing costs directly attributable to the acquisition, construction or installation of the concerned qualifying assets till the date of its commercial use.

16. Pursuant to Notification no: G.S.R 225(E) dated 31 st March, 2009 and 11 th May, 2011 issued by the Ministry of Corporate Affairs, the Company has opted to apply the prescribed treatment in respect of exchange rate variation arising on long term foreign currency monetary items. Accordingly exchange rate variation arising out of reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital assets, are added to or deducted from the cost of the assets and depreciated over the balance life of the asset, and in other cases accumulated in a Foreign Currency Monetary Item Translation Difference Account:, and amortized over the balance period of such long term asset/liability by recognition as income or expense in each of such period. Out of total exchange gain of Rs.2.83 lacs arising on aforesaid long term foreign currency monetary items, a sum of Rs.1.88 lacs has been deducted to the cost of fixed assets and a sum Rs.0.95 lacs has been transferred to Foreign Monetary Items Translation Difference account. A sum of Rs.8.60 lacs has been amortized in profit and loss account in accordance with the remaining period of the long term liability.

17. Confirmations from debtors and creditors and parties to whom loans and advance have been made are being obtained on a periodical basis. In respect of accounts under reconciliation, necessary entries will be passed on reconciliation of these accounts.

18. Interest received includes a sum of Rs.44,64,504/- (previous year Rs.33,49,119/-) on bank deposits and Rs.6,681/- (previous year Rs.1829/-) received from trade customers and interest paid include Rs. 13,58,500/- paid to Directors (previous year Rs. 13,58,500/-).

19. In the opinion of the Management, current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and the provision for all known liabilities have been made.

20. Segment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), "Accounting for Segment Reporting" issued by the Institute of Chartered Accountants of India.

Primary-Business Segment

The Company is in the business of manufacture of high tensile fasteners. Since the Company is operating in a single line of product, there are no reportable primary segments.

Secondary-Geographical Segment

The analysis of geographical segment is based on geographical location of the customers. The following is the distribution of Company's consolidated revenue by geographical market, regardless of where the goods were produced.

21. Related Party Transactions

As per Accounting Standard No.18 issued by the Institute of Chartered Accountants of India, related parties in terms of the said standard are disclosed below: -

(a) Names of Related parties and description of relationship:

1. Subsidiary (i) Indian Fasteners Limited

2. Associates (i) Amit Screws Pvt. Ltd.

(ii) Hanumat Wire Udyog Pvt. Ltd. (iii) J C Fasteners Ltd. (iv) LPS Bossard Pvt. Ltd. (Joint Venture)

(v) LPS Bossard Information Systems Pvt. Ltd. (Joint Venture)

(vi) Lakshmi Extrusion Ltd. (vii) LPS Fasteners & Wires Pvt. Ltd. (viii) Nav Bharat Industries

(ix) Nav Bharat Agencies

(x) Shiv Industries

(xi) Swadesh Engineering Industries

(xii) Sudhir Automotive Industries Pvt. Ltd.

(xiii) United Engineers

(xiv) Universal Enterprises

3. Key Management Personnel (i) Shri Lalit Kumar Jain

(ii) Shri Dinesh Kumar Jain

(iii) Shri Vijay Kumar Jain

(iv) Shri Rajesh Jain

(v) Smt. Sushila Devi Jain

4. Relative of Key Management Personnel (i) Shri S.K.Jain (Brother of Shri D.K.Jain)

(ii) Shri Nikhlesh Jain (Son of Shri D.K.Jain)

(iii) Shri Amit Jain (Son of Shri V.K.Jain)

(iv) Shri Gagan Jain (Son of Shri L.K. Jain) (v) Shri Gautam Jain (Son of Shri L.K. Jain)

(vi) Shri Rahul Jain (Son of Shri R.K. Jain)

(vii) Smt. Charul Jain (Wife of Shri Amit Jain)

(viii) Smt. Rita Jain (Wife of Shri L.K. Jain)

(ix) Smt. Deepa Jain (Wife of Shri V.K. Jain)

22. Disclosure in respect of Company's Joint Ventures in India pursuant to Accounting Standard 27 "Financial Reporting of Interest in Joint Ventures":

(i) a) Name of the Venture LPS Bossard Pvt. Ltd.

b) Country of Incorporation India

c) Proportion of Ownership interest as at March 31,2011 49%

d) The aggregate of Company's share in the above ventures in:

(ii) a) Name of the Venture LPS Bossard Pvt. Ltd.

b) Country of Incorporation India

c) Proportion of Ownership interest as at March 31,2011 49%

23. In accordance with Accounting Standard 28 'Impairment of Assets' issued by the Institute of Chartered Accountants of India and made applicable from 1st day of April, 2004, the Company has assessed the potential generation of economic benefits from its business units as on the balance sheet date and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business; there is no indication to the contrary and accordingly, the management is of the view that no impairment provision is called for in these accounts.

24. The Company has proposed dividend for the year @15% on its equity capital and the provision for corporate dividend tax including surcharge and education cess thereon has been made in accordance with Finance Act, 2011. The said amount is not subject to tax deducted at source (TDS).

We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of the Accounting Standard (AS-21) Consolidated Financial Statements, Accounting standard (AS-23) Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard (AS-27)' Financial Reporting of interests in Joint Ventures, issued by the Institute of Chartered Accountants of India, and on the basis of the separate financial statements of the subsidiary, associates and the joint ventures included in the Consolidated Financial Statements.

We report that, on the basis of the information and explanations given to us, and on consideration of report of auditors on separate financial statements of subsidiary company and provisional financial statements of the Joint ventures and associates, the consolidated financial statements, subject to Note No. 10 of Schedule 17 with regard to non provision of gratuity liability and leave encashment in accordance with AS-15 'Employee Benefits' issued by the Institute of Chartered Accountants of India and read together with other notes thereon give a true and fair view in the case of:

(a) the consolidated balance sheet, of the consolidated state of affairs of the Company, its subsidiary, associates and joint ventures as at 31st March, 2011 and

(b) the consolidated profit and loss account, of the consolidated results of the operations of the Company, its subsidiary, associates and joint ventures for the year ended on that date;

(c) in the case of consolidated cash flow statements, of the consolidated cash flows of the Company, its subsidiary, associates and the joint ventures for the period ended on that date.

 
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