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
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
*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 3000 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
(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
(ii) Interest accrued and due Rs.738221/- remained unpaid as on the
Balance sheet date.
(i) Trade payables include acceptances Rs.118689908/- (Previous Year
(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.
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
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
5 Freehold Offices Premises are in respect of office flats at Mumbai
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
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
Civil Courts 239980 - - 239980 460517
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
(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.
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.
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
(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.