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Notes to Accounts of LGB Forge Ltd.

Mar 31, 2015

A. Terms/Rights attached to Equity shares

The Company has one class of issued shares referred to as equity shares having a par value of Rs.1/- Each holder of equity shares is entitled to one vote per share. The dividend proposed by the board of Directors, if any,is subject to the approval of shareholders in Annual General Meeting. In the event of liquidation of the Company the holder of the equity shares will be entitled to receive remaining assets of the Company after settlement of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the equity shareholders.

b. There are no bonus shares, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceeding the reporting date.

i. Rupee Term loan from ICICI Bank carries interest @ base rate plus 3.25% (i.e. 13.25 % p.a.), payable on monthly basis.The loan is repayable in 7 quarterly installments of Rs.250 lakhs each. The loan is secured by way (a) hypothecation (first charge) of whole movable properties including its movable plant and machinery, machinery spares, tools and accessories and other movable (except current assets), both present and future located at Belagola Industrial Area, Hebbal village, Mysore (Hot forging unit),Pillaiappanpalayam, Coimbatore (Hot and Warm forging unit) and Kondayampalayam, Coimbatore(Cold forging unit); and (b) first charge by way of deposit of title deeds in respect of immovable properties situated at (i) Kariyampalayam Village, Pillaiappanpalayam, Coimbatore; and (ii) Hebbal Village, Kasaba Hobli, Mysore. Loan is further secured by corporate guarantee of L.G.Balakrishnan & Bros Limited.

ii. Interest free Sales tax deferral scheme loan in respect of Karnataka Sales Tax amounting to Rs.104.38 lakhs and Karnataka VAT amounting to Rs.56.23 lakhs, has been repaid in 1 half yearly installment of Rs.10.44 lakhs & Rs.5.62 lakhs respectively ending with June 2014.

i ii. Intercorporate deposit of Rs.50 lakhs received from Tribe Investments and Services Private Limited carries interest @ 14% p.a and has been repaid in 2 quarterly installments of Rs.8.33 lakhs.

i. Working Capital/ Cash Credit loan from Axis Bank carries interest @ 12.75% p.a and are secured by first pari passu charge on entire current assets and second pari passu charge on the entire movable fixed assets of the Company, both present and future.

ii. Working Capital/Cash Credit loan from ICICI Bank carries interest @ 12.50 % p.a. and are secured by first charge by way of hypothecation of the Company''s entire stock of raw materials, semi finished and finished goods, consumable stores, tools and spares and such other moveables including book debts, bills whether documentary or clean, outstanding monies,receivables, both present and future, ranking pari passu with other participating bank (viz., Axis bank).

iii. Working Capital/Cash Credit loan from IDBI bank carries interest @ 14.00% and are secured by pari passu first charge over the current assets of the Company. Collateral second pari passu charge over the fixed assets of the Company except those that are exclusively charged to term lenders.

iv. Packing Credit facility from IDBI Bank carries interest @ 11.75% p.a. and is secured by pari pasu first charge over the current assets of the Company. Collateral second pari pasu charge over the fixed assets of the Company except those that are exclusively charged to term lenders

v. The above loans are further secured by Corporate Guarantee of L.G.Balakrishnan & Bros Ltd.

2 The Company has not recognised the net deferred tax assets, in respect of accumulated losses and unabsorbed depreciation in view of absence of virtual certainty of availing the benefit in the future.

3 The balance in parties accounts are subject to confirmation and reconciliation, if any. In the opinion of the management all current assets including stock-in-trade/sundry debtors and loans and advances in the normal course of business would realize the value at least to the extent stated in the Balance sheet.

4 Micro, Small and Medium Enterprises

There are no amounts payable to Micro, Small and Medium Enterprise as at 31st March 2015. Further, there is no interest payable on account of overdue payments. The above information regarding Micro, Small and Medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

5 The Company has only one reportable business segment namely manufacture of forged and machined components.

6 CONTINGENT LIABILITIES (to the extent not provided for) Rs.in lakhs

As at As at PARTICULARS 31.03.2015 31.03.2014

a Guarantee given by Bankers and outstanding 75.00 50.00

b Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for (Net after advance payments) - 7.05

c Letter of Credits 324.48 261.93

d Counter guarantee given to L.G. Balakrishnan to the extent of & Bros Limited for guarantee given loan guaranteed

7. RELATED PARTY DISCLOSURES (As identified by the Management and relied upon by Auditors)

A. Name of related parties and nature of relationship where control exists are as under :

i. Key Management Personnel

Sri. V. Rajvirdhan Sri. K. Karthik

1. Sri. V. Rajvirdhan has relinquished his office as a Executive Director from w.e.f. 16.05.2014 2. Sri. V. Rajvirdhan has been appointed as a Vice Chairman (Non-Executive Director) w.e.f. 16.05.2014

ii Relatives of Key Management Personnel - Sri. V. Rajvirdhan

Sri. B.Vijayakumar Sri. Arjun Karivardhan

Smt. D.Sasikala Sri. Nithin Karivardhan

Smt. Vijayshree.V Smt. V. Rajsri

ii Relatives of Key Management Personnel - Sri. K. Karthik

Sri. V. Kalyanasundaram Sri. Bharathi Sriram Ms. Kirthika Kalyan

Smt. K. Anuradha Sri. Eshwar K Srivats

iii. Others : (Enterprise over which key management personnel are able to exercise significant influence) Companies

a. L.G. Balakrishnan & Bros Ltd

b. Elgi Automotive Service (P) Ltd

c. L.G.B Auto Products (P) Ltd

d. LG Farm Products (P) Ltd

e. L.G. Balakrishnan & Bros - Karur

f. LG Sports Ltd

g. Super Speeds Private Ltd

h. Super Transports Private Ltd

i. Silent Chain India Private Ltd

j. LGB Fuel Systems Private Ltd

k. BCW V Tech India Private Ltd

l. Rolon Fine Blank Ltd

m. LGB Rolon Chain Ltd

n. South Western Engineering India Ltd

o. Tribe Investments and Services Private Ltd

p. Renold Chain India Private Ltd

8 Gratuity:

Description of the Company''s defined benefit Plan:

The Company operates a defined benefit plan for the payment of the post employee benefits in the form of gratuity. Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the Company.

9 Operating Lease:

As Lessee:

The Company has entered into operating leases, having a lease period ranging from one year to five years, with an option to renew the lease. The future minimum lease payments are as follows: Rs.in Lakhs

10 Profit on sale of land at Pillaiappampalayam has been shown under exceptional items.

11 a) Effective April 1, 2014, the Company has, with retrospective effect, changed its method of providing depreciation on certain fixed assets from ''Written Down Value'' method to ''Straight Line'' method. Accordingly, depreciation is now provided on Straight Line basis for all tangible fixed assets.

Management believes that this change will result in more appropriate presentation and will give a systematic basis of depreciation charge, representative of the time pattern in which the economic benefits will be derived from the use of these assets. Consequent to the above, the impact of the change in the method of providing depreciation upto March 31,2014 amounting to Rs.61.18 lacs has been credited to the Statement of Profit and Loss for the year and balance of Net Tangible Fixed Assets and Reserves and Surplus are higher by Rs. 61.18 lacs.

b) The management of the Company has reassessed the useful life of tangible fixed assets in accordance with Schedule II of the Companies Act, 2013 and depreciation has been provided based on the the remaining useful life of the asset on a straight line basis. In respect of assets whose remaining useful life is already exhausted as at April 1,2014, depreciation of Rs. 115.57 lacs has been adjusted against the opening balance of Retained Earnings as on that date.

Consequent to the above, depreciation for the year is higher by Rs.9.64 lacs.

This being a technical matter, has been relied upon by the auditors.

12 Unhedged foreign currency exposure :

13 Figures have been rounded off to the nearest Lakhs and two decimals thereof.

14 The amounts and disclosures included in the financial statements of the previous year have been reclassified/ regrouped wherever necessary to confirm to current years'' classification.


Mar 31, 2014

1. LONG TERM BORROWINGS (Contd.)

i. Rupee Term loan from ICICI Bank carries interest @ base rate plus 3.25% (i.e. 13.25 % p.a.), payable on monthly basis. The loan is repayable in 11 quarterly installments of Rs. 250 lakhs each. The loan is secured by way (a) hypothecation(first charge) of whole movable properties including its movable plant and machinery, machinery spares, tools and accessories and other movable asset (except current assets), both present and future located at Belagola Industrial Area, Hebbal village, Mysore (Hot forging unit),Pillaiappanpalayam, Coimbatore (Hot and Warm forging unit) and Kondayampalayam, Coimbatore(Cold forging unit); and (b) first charge by way of deposit of title deeds in respect of immovable properties situated at (i) Kariyampalayam Village, Pillaiappanpalayam, Coimbatore; and (ii) Hebbal Village, Kasaba Hobli, Mysore. Loan is further secured by corporate guarantee of M/s.L.G.Balakrishnan & Bros Limited.

ii. Interest free Sales tax deferral scheme loan in respect of Karnataka Sales Ta x amounting to Rs. 104.38 lakhs and Karnataka VAT amounting to Rs. 56.23 lakhs, is repayable in 1 half yearly installment of Rs. 10.44 lakhs & Rs. 5.62 lakhs respectively ending with June 2014.

iii. Interoperate deposit of Rs. 50 lakhs received from M/s.Tribe Investments and Services Private Limited carries interest @ 14% p.a and is repayable in 2 quarterly installments of Rs. 8.33 lakhs. Interest is payable on monthly basis.

i. Working Capital/ Cash Credit loan from Axis Bank carries interest @ 13.25% p.a and are secured by first pari passu charge on entire current assets and second pari passu charge on the entire movable fixed assets of the Company, both present and future.

ii. Working Capital/Cash Credit loan from Corporation Bank carries interest @ 14.85% p.a. and are secured by:

(i) pari passu materials, first charge on entire stock of raw materials, work-in-process, finished goods including goods held for exports, stores & spares, book debts and other chargeable current assets of the Company; and (ii) pari passu second charge on the entire fixed assets of the Company.

iii. Working Capital/Cash Credit loan from ICICI Bank carries interest @ 13.00 % p.a. and are secured by first charge by way of hypothecation of the Company''s entire stock of raw materials, semi finished and finished goods, consumable stores and spares and such other movables including book debts, bills whether documentary or clean, outstanding monies,receivables, both present and future, ranking pari passu with other participating banks (viz., Andhra Bank, Corporation Bank, Axis bank).

iv. Working Capital/Cash Credit loan from IDBI bank carries interest @ 14.50% and are secured by pari passu first charge over the current assets of the Company. Collateral second pari passu charge over the fixed assets of the Company except those that are exclusively charged to term lenders.

v. Working Capital/Cash Credit loan from Andhra Bank carries interest @ 15.50% p.a and are secured by pari passu first charge on all current assets of the company such as stock of raw materials, semi finished goods, finished goods, packing materials and book debts.

2. The company has not recognised the net deferred tax assets, in respect of accumulated losses and unabsorbed depreciation in view of absence of virtual certainty of availing the benefit in the future.

3. The balance in parties accounts are subject to confirmation and reconciliation, if any. In the opinion of the management all current assets including stock-in-trade/sundry debtors and loans and advances in the normal course of business would realize the value at least to the extent stated in the Balance sheet.

4. Micro, Small and Medium Enterprises

There are no amounts payable to Micro, Small and Medium Enterprise as at 31st March 2014. Further, there are no interest payable on account of overdue payments. The above information regarding Micro, Small and Medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

5. The Company has only one reportable business segment namely manufacture of forged and machined components

6. CONTINGENT LIABILITIES (to the extent not provided for) Rs. in lakhs

As at As at PARTICULARS 31.03.2014 31.03.2013

a Guarantee given by Bankers and outstanding 50.00 150.00

b Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for (Net after advance payments) 7.05 7.30

c Letter of Credits 261.93 102.44

d Counter guarantee given to L.G. Balakrishnan & Bros Limited to the extent of for guarantee given loan guaranteed

7. Gratuity:

Description of the Company''s defined benefit Plan:

The Company operates a defined benefit plan for the payment of the post employee benefits in the form of gratuity. Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the Company.

8. Exceptional Item during the year represents profit on sale of land and building located at Pillianpapalayam, Annur via Coimbatore - 641 653

9. Operating Lease:

10. Figures have been rounded off to the nearest Lakhs and two decimals thereof.

11. The amounts and disclosures included in the financial statements of the previous year have been reclassified/ regrouped wherever necessary to confirm to current years'' classification.


Mar 31, 2013

1 The Company has not recognised the net deferred tax assets, in respect of accumulated losses and unabsorbed depreciation in view of absence of virtual certainty of availing the benefit in the future.

2 The balance in parties accounts are subject to confirmation and reconciliation, if any. In the opinion of the Management all current assets including stock-in-trade/sundry debtors and loans and advances in the normal course of business would realize the value at least to the extent stated in the Balance Sheet.

3 Micro, Small and Medium Enterprises

There are no overdue amounts paid/payable to Micro, Small and Medium Enterprises. The above information regarding Micro, Small and Medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

4 Figures have been rounded off to the nearest Lakhs and two decimals thereof.

5 The amounts and disclosures included in the financial statements of the previous year have been reclassified/ regrouped wherever necessary to confirm to current years'' classification.

6 The Company has only one reportable business segment namely manufacture of forged and machined components.

7 Gratuity:

Description of the Company''s defined benefit Plan:

The Company operates a defined benefit plan for the payment of the post employee benefits in the form of gratuity. Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the Company.

8. Exceptional items represents expenses incurred towards relocation and other incidental expenses incurred on shifting of machines from one manufActuring unit to another.


Mar 31, 2012

A. Terms/Rights attached to Equity shares

The Company has one class of issued shares referred to as equity shares having a par value of Rs 1 /-. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the board of directors, if any, is subject to the approval of shareholders in Annual General Meeting. In the event of liquidation of the Company the holder of the equity shares will be entitled to receive remaining assets of the Company after settlement of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the equity shareholders.

The Company has issued 5,00,00,017 equity shares of face value of Rs 1 each at a premium of Rs 1.75 per Equity Share for an amount aggregating Rs 1,375.01 Lakhs on a rights basis to the existing equity shareholders of LGB forge Limited in the ratio of one equity share for every two.fully paid up equity shares held by the exising equity shareholders on the record date viz., 21st March,2012.The Rights issue closes on 28th April, 2012.

i. Rupee Term loan from ICICI Bank carries interest @ base rate 3.25% (i.e. 13.25% p.a.) The loan is repayable in 16 quarterly installments of Rs 250 lakhs each starting from March 2013. Interest is payable on monthly basis, from the date of loan viz., 30th March 2011. The loan is secured by way of hypothecation of whole movable properties including its movable plant and machinery, machinery spares, tools and accessories and other movable (except current assets), both present and future located at Belagola Industrial Area, Hebbal village, Mysore (Hot forging unit), Pillaiappanpalayam, Coimbatore (Hot and Warm forging unit) and Kondayampalayam, Coimbatore(Cold forging unit). Loan is further secured by corporate guarantee of M/s. L.G.Balakrishnan f± Bros Limited.

Term loan from Axis Bank carried interest @ 13.25% p.a. The loan was repaid during the year. The loan was secured by hypothication of entire movable assets at plants located at Pillaiappanpalayam, Kondayampalayam, forging division Mysore. The loan was further secured by corporate guarantee of M/s. L.G. Balakrishnan & Bros Ltd. Interest was paid on mothly basis.

ii. Sales tax deferral scheme loan in respect of Karnataka Sales Tax amounting to Rs 104.38 lakhs and Karnataka VAT amounting to Rs 56.23 lakhs, is repayable in 10 half yearly installments of Rs 10.44 lakhs & Rs 5.62 lakhs respectively commencing from December 2009 and ending with June 2014.

iii. Fixed deposit carries interest @ 10.5% p.a. having a maturity period of 3 years which was received in November 2009 Rs 100 lakhs, out of which, 50 lakhs was preclosed in April 2011. Interest is payable on quarterly basis.

iv. Intercorporate deposit of Rs 150 lakhs received from M/s. Tribe Investments and Services Private Limited carries interest @ 14% p.a. and is repayable in 18 quarterly installments ofRs 8.33 lakhs commencing from June 2010. Interest is payable on monthly basis.

i. Short term loan from Yes Bank carries interest @11.5% p.a . The loan can be rolled over every 6 months. The loan is secured by subservient charge on the fixed asset of the Company. Loan is further secured by corporate guarantee of M/s.L.G.Balakrishnan & Bros Limited.

ii. Working Capital loans from ICICI Bank, Axis Bank, Corporation Bank, Andhra Bank, IDBI Bank carries an interest @ 12.00% to 15.25% are primarily secured by hypothecation of inventories and book debts of the Company and also secured by hypothecation of existing block of assets of the company excluding those specific machineries charged to banks/financial institutions.

iii. Intercorporate deposit of Rs 340 lakhs received from M/s.Silent Chain India Private Limited carries interest @ 11% p.a repayable on demand. Interest is being paid on quarterly basis.

iv. Loan from Directors carries interest @11% p.a. which is repayable on demand.

v. Fixed Deposit of Rs 8 lakhs carries interest @ 9% p.a. for a period of 1 year received on November 2010.

The Company has given on tease, furnished premises situated at Pillaiappanpalayam, Coimbatore to M/s. L.G.Batakrishnan 6t Bros. Ltd. for a period of eleven months. Lease rental income received during the year for the lease of said property amounts to Rs 7.34 lakhs(Previous year Rs 10.25 Lakhs)

1 The Company has not recognised the net deferred tax assets, in respect of accumulated losses and unabsorbed depreciation in view of absence of virtual certainty of availing the benefit in the future.

2 The balance in parties accounts are subject to confirmation and reconciliation, if any. In the opinion of the management all current assets including stock-in-trade/sundry debtors and loans and advances in the normal course of business would realize the value at least to the extent stated in the Balance Sheet.

3 Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises in respect of whom the Company dues are outstanding for more than 45 days at the Balance Sheet date. The above information regarding Micro, Small and Medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

4 Consequent to the Demerger, the Company is in the process of transferring the title deeds in the name of the Company.

5 Figures have been rounded of the nearest Lakhs and decimals thereof.

6 As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended March 31, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

7 The Company has only one reportable business segment namely manufacture of forged and machined components

8 CONTINGENT LIABILITIES (to the extent not provided for)

As at As at 31.03.2012 31.03.2011 Rs in lakhs Rs in lakhs

a Guarantee given by Bankers and outstanding 150.00 150.00

b Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for (Net after advance payments) 12.10 -

c Counter guarantee given to LG Balakrishnan & Bros Limited to the extent of - for guarantee given loan guaranteed

9. Gratuity:

Description of the Company's defined benefit Plan:

The company operates a defined benefit plan for the payment of the post employee benefits in the form of gratuity. Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the Company.


Mar 31, 2011

1. Secured Loans:

a) The rupee term loan from ICICI Bank is secured by hypothecation of movable fixed assets as at 31.03.2011 along with the corporate guarantee given by M/s. L.G. Balakrishnan & Bros Limited, with creation of mortgage on immovable fixed assets of the Company subsequently.

b) The rupee term loan from Axis Bank is secured by hypothecation of movable fixed assets, mortgage of immovable fixed assets and the corporate guarantee given by M/s. L.G. Balakrishnan & Bros Limited.

c) The Working Capital/ Cash Credit loans from ICICI Bank, Axis Bank, Corporation Bank, Andhra Bank, IDBI Bank are primarily secured by hypothecation of inventories and book debts of the Company, also secured by hypothecation of existing block of assets of the Company excluding those specific machineries charged to Banks/Financial Institution.

2. Estimated value of contracts remaining to be executed on capital accounts is Rs.Nil

3. The Company has not recognized the net deferred tax assets, in respect of accumulated losses and unabsorbed depreciation in view of the virtual uncertainity of availing the benefit in future.

4. The balances in parties accounts are subject to confirmation and reconciliation, if any. In the opinion of the management all current assets including stock- in-trade/sundry debtors and loans and advances in the normal course of business would realize the value at least to the extent stated in the Balance Sheet.

5. Micro, Small and Medium enterprises:

There are no Micro, Small and Medium Enterprises in respect of whom the Companys dues are outstanding for more than 45 days at the Balance Sheet date. The above information and that given under Current Liabilities and Provisions regarding Micro, Small and Medium Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

6. Consequent to demerger the Company is in the process of transferring the title deeds in the name of the Company.

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

8. Previous years figures have been regrouped wherever necessary to conform to the current years classification.

9 CONTINGENT LIABILITIES Rs. in Lakhs

31.03.2011 31.03.2010

a Guarantee given by Bankers and outstanding 150.00 101.30

b Amount outstanding on Letter of Credit - 703.64

c Estimated amount of contracts remaining to be executed on Capital Accounts arid not provided for (Net after advance payments) Nil Nil

d Bills discounted with Banks Nil Nil

e Disputed tax liability Nil Nil

f Export obligation Nil Nil

Duty involved Nil Nil

11. RELATED PARTY DISCLOSURES (As identified by the management and relied upon by Auditors)

A. Name of related parties and nature of relationship where control exists are as under:

i. Associate Companies

a. L.G. Balakrishnan fr Bros Ltd

b. Elgi Automotive Service (P) Ltd

c. L.G.B Auto Products (P) Ltd

d. LG Farm Products (P) Ltd

e. L.G. Balakrishnan & Bros - Karur

f. LG Sports Ltd

g. Super Speeds Private Ltd

h. Super Transports Private Ltd

i. Silent Chain India Private Ltd

j. LGB Fuel Systems Private Ltd

k. BCW V Tech India Private Ltd

l. Rolon Fine Blank Ltd

m. LGB Rolon Chain Ltd

n. South Western Engineering India Ltd

o. Vijayshree Spinning Mills Private Ltd

p. Renold Chain India Private Ltd

ii. Key Management Personnel iii. Relatives of Key Management Personnel

Sri. V. Rajvirdhan Sri. V. Rajvirdhan and his Relatives

12. Gratuity:

The Company operates a defined benefit plan for the payment of the post employee benefits in the form of gratuity. Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the Company.

13. The Company has only one reportable business segment namely manufacture of forged and machined components.


Mar 31, 2010

1. Secured Loans:

a) The rupee term loan from Axis Bank is secured by the hypothecation of Plant and Machineries purchased out of the said loans and are collaterally secured by the equitable mortgage by deposits of title deeds of certain immovable properties and the corporate guarantee given by M/s. L.G. Balakrishnan & Bros Limited.

b) The Working Capita 1/ cash credit loans from ICICI Bank, Axis Bank, Corporation Bank, Andhra Bank, IDBI Bank are primarily secured by hypothecation of inventories and book debts of the company. Also collaterally secured by hypothecation of existing block of assets of the company excluding those specific machineries charged to Banks/Financial Institution.

2. Estimated value of contracts remaining to be executed on capital accounts is Rs.Nil

3. The company has not recognized the net deferred tax assets, in respect of accumulated losses and unabsorbed depreciation in view of the virtual uncertainty of availing the benefit in future.

4. The balances in parties Accounts are subject to confirmation and reconciliation, if any. In the opinion of the management all current assets including stock- in-trade/sundry debtors and loans and advances in the normal course of business would realize the value stated.

5. Power and fuel are net of own generation.

6. Micro, Small and Medium enterprises

There are no Micro, Small and Medium Enterprises in respect of whom the companys dues are outstanding for more than 45 days at the Balance sheet date.

The above information and that given under Current Liabilities and Provisions regarding Micro, Small and Medium Enterprises have been determined to the extent such parties have been identified on the basis of information available with the company and relied upon by the auditors.

7. Consequent to demerger the company is in the process of transferring the title deeds in the name of the company.

8. Preliminary expenses have been written off in accordance with the accounting standard on intangible.

9. Figures have been rounded off to the nearest thousand.

10. Previous years figures have been regrouped wherever necessary to conform to the current years classification.

Rs. in Lakhs

11 CONTINGENT LIABILITIES

31.03.2010 31.03.2009

a Guarantee given by Bankers and outstanding 101.30 153.00

b Amount outstanding on letters of Credit 703.64 35.97

c Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for (Net after advance payments) Nil Nil

d Bills discounted with Banks Nil Nil

e Disputed tax liability Nil Nil

f Export obligation Nil Nil

Duty involved Nil Nil

12. RELATED PARTY DISCLOSURES (As identified by the management and relied upon by Auditors)

A. Name of related parties and nature of relationship where control exists are as under:

i. Associate Companies

a. L.G. Balakrishnan & Bros Ltd

b. Elgi Automotive Service Ltd

c. L. G. B Auto Products Ltd

d. LG Farm Products Ltd

e. L.G. Balakrishnan & Bros - Karur

f. LG Sports Ltd

g. Super Speeds Private Ltd

h. Super Transports Private Ltd

i. Silent Chain India Private Ltd

j. LGB Fuel Systems Private Ltd

k. BCW V Tech India Private Ltd

I. Rolon Fine Blank Ltd

m. LGB Rolon Chain Ltd

n. South Western Engineering India Ltd

o. Vijayshree Spinning Mills Private Ltd

p. Renold Chain India Private Ltd

ii. Key Management Personnel Sri. V. Rajvirdhan

iii. Relatives of Key Management Personnel

Sri. V. Rajvirdhan and his Relatives

13. Gratuity:

Description of the Companys defined benefit Plan:

The company operates a defined benefit plan for the payment of the post employee benefits in the form of gratuity. Benefits under the plan are based on pay and years of service and are vested on completion of five years of service, as provided for in the payment of Gratuity Act, 1972. The terms of the benefits are common for all the employees of the Company

14. The Company has only one reportable business segment namely manufacture of forged and machined components.

 
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