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Notes to Accounts of Lokesh Machines Ltd.

Mar 31, 2015

1 The Loans referred at (a), (e), (h) above are secured by 1st pari-passu charge by hypothecation of movable fixed assets (Plant & Machinery), Buildings at Balanagar created out of bank finance and Land at Toopran as per Machine Division expansion plan and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on the fixed assets of the company(other than project assets exclusively financed) and current assets of the company.

2 The Loans referred at (d) above are secured by Extention of 1st pari-passu charge on current assets, 2nd charge on the fixed assets pari-passu basis and immovable property at Medchel standing in the name of Mr. M.Lokeswara Rao.

3 The Loans referred at (g) & (i) above are secured by 1st pari-passu charge by hypothecation of land & buildings and Plant & Machinery, created out of bank finance as per 2DI and Connecting rod expansion plan at Pune and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on the fixed assets of the company(other than project assets exclusively financed) and current assets of the company

4 The Loans referred at (j) above are secured by 1st pari-passu charge by hypothecation Plant & Machinery, created out of bank finance at pune and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on the fixed assets of the company(other than project assets exclusively financed) and current assets of the company

5 The Loans referred at (k) above are secured by 1st pari-passu charge by hypothecation of movable fixed assets (Plant & Machinery), created out of finance and guaranted by Managing Director and Director.

b) During the financial year, company has paid an amount of Rs.173.02 lacs on due date out of Rs.1403.47 lacs payable against Secured Non Convertible Debentures (NCD's) with interest due to the slow down in business. However the company has submitted its reschedulement proposal for revised repayment schedule and debenture holders consented for the same in principle.

6. Working capital limits from consortium banks are secured by way of :

i) Primary : pari-passu first charge by way of hyphothecation of stocks of raw material, semi finished goods, finished goods, stores and spares, book debts and all movable and other current assets of the company.

ii) Collateral : (i) pari-passu first charge by way of Equitable Mortage of land & buildings at B-36, 15&17,25&27, Plot No 41 at Balanagar, Land & Buildings at Bonthapalli and Medchel except the relating to the specific term loans.

(ii) pari-passu second charge by way of Equitable Mortage of fixed assets of the Company.

a) There are no delays in payments to Micro and Small enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act 2006. The information regarding Micro and Small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

1 Raw materials and Components are at cost on first in first out basis(FIFO)

2 Finished good and work in progress are valued at lower of cost and net realizable value on full absorption cost basis

7. NOTES TO ACCOUNTS ANNEXED TO AND FORMING PART OF THE ACCOUNTS.

Figures in Rs. Lakhs

As on As on Particulars 31.03.2015 31.03.2014

1 Contingent Liabilities not provided for on account of :

(a) Letter of Credit 437.80 595.99

(b) Bank Guarantees 257.22 1,016.74

(c) Contracts to be executed on capital 50.00 10.25 projects

2 Earnings in Foreign Exchage FOB value 378.47 808.83 of Exports

3 Expenditure in Foreign Currency.

(a) Travel 3.64 4.86

(b) Captial Goods - 418.00

(c) Stores & Components 430.76 615.62

4 Value of Imports calculated on CIF basis in respect of :

(a) Stores, Spares & Components 468.57 842.69

(b) Captial Goods - -

8. Employee Benefits : Gratuity

Consequent to the adoption of Accounting Standard on Employees Benefits (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of india, the following disclosures have been made as required by the Standard for Acturial valuation of Gratuity.

The Company has created a Trust namely LML Employess Group Gratuity Trust vide Trust dated 01.03.1997 and obtained approvals from Income Tax Authorities vide letter No H.Qrs.I/GF/98-99 dated 23.03.1999. LIC has been appointed for management of the Trust fund for the benefits of the employees. The following tables summarize the components of net benefits.

9. Employee Benefits : Actuarial valuation of Leave encashment

Consequent to the adoption of Accounting Standard on Employees Benefits (AS-15) (Revised 2005) is- sued by the Institute of Chartered Accountants of India, the following disclosure have been made as re- quired by the standard for Acturial valuation of Leave encashment.

The primary reporting of the company has been performed on the basis of business segment. The com- pany is organized into two business segments i.e. Machines division and Components division. Segments have been identified and reported based on the nature of the products, risks and returns, the organization structure and the internal financial reporting systems.

Secondary segment reporting is performed on the basis of geographical location of customers. The opera- tions of the company are largely confined to India, with exports contributing to approximately 3.20% of its annual net sales. The management views the Indian market and export market as distinct geographical segments.

10. Segment revenue and results

The expenses that are not directly attributable to the business segments are shown as unallocated corporate costs.

11. Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of debtors, inventories, advances and fixed assets, net of allowances. Assets at the corporate level are not allocable to segments on a reasonable basis and thus the same have not been allocated.

Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.

12. Inter segment transfers

There were no inter-segment transfers during the year.

13. The Company has decided to issue 10,00,000 equity shares to non promoters and 31,00,400 convertible warrants to promoters and non promoters on preferential basis in the EGM conducted on 30.03.2015 . Accordingly company has received an amount of Rs. 500 lakhs against equity shares and Rs. 25 lakhs against convertible warrants.

14. In the opinion of the Board, the current assets and loans & advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

15 Previous year's figures have been re-grouped and/or reclassified wherever necessary to make them comparable with those of current year.


Mar 31, 2014

Rs. Lakhs Particulars 31.03.2014 31.03.2013 1 Contingent Liabilities not provided for on account of :

(a) Letter of Credit 595.99 778.84

(b) Bank Guarantees 1,016.74 825.37

(c) Contracts to be executed on capital projects 10.25 587.8

2 Employee Benefits : Gratuity

Consequent to the adoption of Accounting Standard on Employees Benefits (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of india, the following disclosures have been made as required by the Standard for Acturial valuation of Gratuity.

The Company has created a Trust namely LML Employess Group Gratuity Trust vide Trust dated 01.03.1997 and obtained approvals from Income Tax Authorities vide letter No H.Qrs.I/GF/98-99 dated 23.03.1999. LIC has been appointed for management of the Trust fund for the benefits of the employees. The following tables summarize the components of net benefits.

The primary reporting of the company has been performed on the basis of business segment. The company is organized into two business segments i.e. Machines division and Components division. Segments have been identified and reported based on the nature of the products, risks and returns,

the organization structure and the internal financial reporting systems.

Secondary segment reporting is performed on the basis of geographical location of customers. The operations of the company are largely confined to India, with exports contributing to approximately 7.23% of its annual net sales. The management views the Indian market and export market as distinct geographical segments.

Segment revenue and results

The expenses that are not directly attributable to the business segments are shown as unallocated corporate costs.

Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of debtors, inventories, advances and fixed assets, net of allowances. Assets at the corporate level are not allocable to segments on a reasonable basis and thus the same have not been allocated.

Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.

Inter segment transfers

There were no inter-segment transfers during the year.

3 In the opinion of the Board, the current assets and loans & advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

4 Previous year''s figures have been re-grouped and/or reclassified wherever necessary to make them comparable with those of current year.


Mar 31, 2013

1 Employee Benefits : Gratuity

Consequent to the adoption of Accounting Standard on Employees Benefits (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of india, the following disclosures have been made as required by the Standard for Acturial valuation of Gratuity.

The Company has created a Trust namely LML Employess Group Gratuity Trust vide Trust dated 01.03.1997 and obtained approvals from Income Tax Authorities vide letter No H.Qrs.I/GF/98-99 dated 23.03.1999. LIC has been appointed for management of the Trust fund for the benefits of the employees. The following tables summarize the components of net benefits.

Employee Benefits : Actuarial valuation of Leave encashment

Consequent to the adoption of Accounting Standard on Employees Benefits (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of India, the following disclosure have been made as required by the standard for Acturial valuation of Leave encashment.

The primary reporting of the company has been performed on the basis of business segment. The company is organized into two business segments i.e. Machines division and Components division. Segments have been identified and reported based on the nature of the products, risks and returns, the organization structure and the internal financial reporting systems.

Secondary segment reporting is performed on the basis of geographical location of customers. The operations of the company are largely confined to India, with exports contributing to approximately 5.35% of its annual net sales. The management views the Indian market and export market as distinct geographical segments.

Segment revenue and results

The expenses that are not directly attributable to the business segments are shown as unallocated corporate costs.

Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of debtors, inventories, advances and fixed assets, net of allowances. Assets at the corporate level are not allocable to segments or a reasonable basis and thus the same have not been allocated.

Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Inter segment transfers There were no inter-segment transfers during the year.

In the opinion of the Board, the current assets and loans & advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

Previous year''s figures have been re-grouped and/or reclassified wherever necessary to make them comparable with those of current year.


Mar 31, 2012

1 The Loans referred at (a), (e), (i) above are secured by 1st pari-passu charge by hypothecation of movable fixed assets (Plant & Machinery), Buildings at Balanagar created out of bank finance and Land at Toopran as per Machine Division expansion plan and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on the fixed assets of the company(other than project assets exclusively financed) and current assets of the company

2 The Loans referred at (b), (f), above are secured by 1st pari-passu charge by hypothecation of land & buildings and Plant & Machinery, created out of bank finance as per 2DI first phase expansion plan and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on the fixed assets of the company(other than project assets exclusively financed) and current assets of the company

3 The Loans referred at (c) above are secured by 1st pari-passu charge by hypothecation of movable fixed assets (Plant & Machinery), created out of bank finance as per 2DI second phase expansion plan and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on the fixed assets of the company(other than project assets exclusively financed) and current assets of the company

4 The Loans referred at (g) above are secured by 1st pari-passu charge by hypothecation of land & buildings and Plant & Machinery, created out of bank finance as per 2DI expansion plan at Pune and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on the fixed assets of the company(other than project assets exclusively financed) and current assets of the company

5 The Loans referred at (d), (h) above are secured by 1st pari-passu charge by hypothecation of fixed assets of the company and guaranted by Managing Director and Executive Director & 2nd pari-passu charge on current assets of the company

1 Hire Purchase Loans above are secured by hypothecation of the respective asset and guaranted by one of the Directors of the Company

2 Terms of Repayment: Monthly Installments.

a) The promoters or their nominees has to purchase 75% of OCD's and to be convertible in to equity before 18 months from the date of issue of OCD's. The remaining 25%of OCD's are under option of IFCI Ventures for convertion in to equity shares before 18 months from the date of issue.

b) On the date of completion of tenure of OCD's, the Company will issue a Secured Non Convertible Debentures (NCD's) of face value of Rs. 59.40 against each of the OCD's not bought back by Promoters or their Nominees & not opted for conversion by IFCI Venture if OCD's are not converted in to equity.

c) The OCD's are secured by mortgage of land of 26.34 Acres located at Part-B, Automotive Park at survey No 148 of Kalakkal village, Toopan Mondal, Medak Dist, Andhra Pradesh and further secured by pledge the shares of 5,00,000 held by promoters and further guaranted by promoters.

1 Working capital limits from consortium banks are secured by way of :

i) Primary : pari-passu first charge by way of hyphothecation of stocks of raw material, semi finished goods, finished goods, stores and spares, book debts and all movable and other current assets of the company.

ii) Collateral: (i) pari-passu first charge byway of Equitable Mortage of land & buildings at B-36,15&17,25&27, Plot No 41 at Balanagar, Land

& Buildings at Bonthapalli and Medchel except the relating to the specific term loans

(ii) pari-passu second charge by way of Equitable Mortage of fixed assets of the Company.

1 Raw materials and Components are at cost on first in first out basis(FIFO)

2 Finished good and work in progress are valued at lower of cost and net realizable value on full absorption cost basis B NOTES TO ACCOUNTS

1 (A) Contingent Liabilities not provided for on account of:

Rs. In lakhs

2011-12 2010-11

(a) Letter of Credit 1,731.61 753.83

(b) Bank Guarantees 565.57 643.76

(c) Interest on OCD's 171.54 0.00

(B) Estimated amount of Contracts remaining to be executed on Capital account and not provided for Rs.154.45 lakhs (31.03.2011: Rs. 3535.39 lakhs) [(Net of Advances Rs.434.49 lakhs) (31.03.2011: Rs.403.90 lakhs

2 Expenditure in Foreign Currency.

a) Travel Rs.18.66 lakhs (2010-11: Rs.12.82 lakhs)

b) Capital Goods: Rs 676.64 (2010-11: Rs. Nil lakhs)

c) Stores and components Rs. 710.89 lakhs (2010-11:Rs. 516.36. lakhs)

3 Earnings in Foreign currency:

FOB value of goods exported: Rs.23.89 lakhs (2010-11: Rs. 165.72 lakhs)

4 CIF Value of Imports:

a) Stores, spares and components: Rs. 976.89 lakhs (2010-11: 743.68 lakhs)

b) Capital Goods: Rs 696.13 (2010-11: Rs. Nil lakhs)

5 Employee Benefits : Gratuity

Consequent to the adoption of Accounting Standard on Employees Benefits (AS-15) (Revised 2005) issued by the Institute of Chartered Accountants of India, the following disclosures have been made as required by the Standard for Actuarial valuation of Gratuity.

(Amounts in brackets represent previous year figures)

The primary reporting of the company has been performed on the basis of business segment. The company is organized into two business segments i.e. Machines division and Components division. Segments have been identified and reported based on the nature of the products, risks and returns, the organization structure and the internal financial reporting systems.

Secondary segment reporting is performed on the basis of geographical location of customers. The operations of the company are largely confined to India, with exports contributing to approximately 0.15% of its annual net sales. The management views the Indian market and export market as distinct geographical segments.

Segment revenue and results

The expenses that are not directly attributable to the business segments are shown as unallocated corporate costs.

Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of debtors, inventories, advances and fixed assets, net of allowances. Assets at the corporate level are not allocable to

segments on a reasonable basis and thus the same have not been allocated.

Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.

Inter segment transfers

There were no inter-segment transfers during the year

(Figures in brackets represent transactions for the year 2010-11/ balance as on March 31, 2012 including opening balances)

6 Consequent to the Notification under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared under Revised Schedule VI accordingly. The previous year's figures also have been reclassified to confirm to this year's classification. There is a significant impact in presentation of the figures due to change in presentation arising out of schedule VI.

 
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