Home  »  Company  »  Rajapalayam Mill  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Rajapalayam Mills Ltd.

Mar 31, 2016

3. Sales Tax Assessment upto year ended 31st March, 2007 has been completed.

4. In respect of Service Tax matters, appeals are pending with Appellate Authorities for a demand amount of Rs. 182.97 Lakhs (PY: Rs. 172.15 Lakhs) towards manpower recruitment or supply agency services, of which we have already deposited Rs. 11.21 Lakhs and disclosed under Other Current Assets. In view of the various case laws decided in favour of the Company and in the opinion of the management, there may not be any tax liability on this matter.

5. Income Tax Assessment have been completed upto the Accounting Year ended 31st March, 2013 i.e. AY 2013-14.

6. In respect of Electricity matters, Appeals / Writ petition are pending with TNERC / APTEL / High Court for various matters for which no provision has been made in the books of accounts to the extent of Rs. 477.08 Lakhs (PY: Rs. 434.18 Lakhs). In view of the various case laws decided in favour of the Company and in the opinion of the management, there may not be any tax liability on the this matter.

7. Income Tax department has filed an appeal before the Hon''ble Supreme Court / High Court against the order of the High Court / ITAT in the matter of Replacement Expenditure allowed in favour of the Company in previous years. The Hon''ble Supreme Court / High Court had remanded the mater back to the Commissioner of Income Tax / Assessing Authorities to consider the matter afresh. On these issues there is no pending demand from the department. However the Company has made a provision of Rs. 107.57 Lakhs towards Income Tax in the financial year 2015-16 and the same is included in "Income Tax expenses relating to earlier years".

The amount of interest, if any that would be payable on account of above issues cannot be currently ascertained considering various legal options available to the Company and hence no provision has been made for the same.

10. Company''s shares are listed in BSE Limited, for which listing fee for the year 2016-17 has been paid.

11. There are no dues to micro and small enterprises as at 31-03-2016 (PY: Rs. NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

12. The unadjusted units generated from the Windmills as on 31-03-2016 are 5.87 Lakhs KWH (PY: 18.44 Lakhs KWH) and its monetary value of Rs. 39.11 Lakhs (PY: Rs. 122.93 Lakhs) has been included in Other Current Assets, which will be adjusted in the forthcoming months.

13. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract. During the current year Rs. 14.96 Lakhs (PY: Rs. 33.66 Lakhs) has been amortized and the same is included in Finance Costs.

14. a) Pursuant to the Schedule II of the Companies Act, 2013 the Company has componentized its fixed assets based on technical advice and separately assessed the useful life of the significant components, forming part of the main asset. Consequently, the depreciation for the year ended 31-03-2016 is higher by Rs. 326.69 Lakhs. The Company has opted to adjust the carrying value of the significant component of Rs. 54.64 Lakhs to the General Reserves as per the transitional provisions of the said Act. The deferred tax impact of Rs. 18.58 Lakhs on the said transitional adjustment is credited to the General Reserves.

b) During last year, pursuant to implementation of Schedule II of the Companies Act, 2013 with effect from 01-04-2014, the Company has calculated the depreciation on all the assets under Straight Line Method based on the useful life prescribed under the said schedule. Accordingly, during the financial year 2014-15, the value of assets whose useful life is exhausted as on 01-04-2014, as per the new Act, amounting to Rs. 121.65 Lakhs had been charged off to the General Reserves. The deferred tax impact of Rs. 41.35 Lakhs on the said transitional adjustment is credited to the General Reserves.


Mar 31, 2015

(Rs. in Lakhs)

As at As at 31-03-2015 31-03-2014

OTHER DISCLOSURES

1. Contingent Liabilities

Liability on guarantees given to the Bankers (Refer to Item No. 20(i) of this Note) 47,109 46,428 Of which, actual loan amount outstanding as at the end of the year 19,383 23,592

2. Commitments

(i) Estimated amount of contracts remaining to be executed on capital account not provided 356 1,946

(ii) Other Commitments

Liability on Letter of Credit opened for Capital Goods 73 299

Liability on Letter of Credit opened for Others NIL 170

3. Sales Tax Assessment upto year ended 31st March, 2007 has been completed.

4. In respect of Service Tax matters, appeals are pending with Appellate Authorities for a demand amount of Rs. 172.15 Lakhs (PY: Rs. 153.02 Lakhs) towards manpower recruitment or supply agency services, of which we have already deposited Rs. 11.21 Lakhs.

5. Income Tax Assessment have been completed upto the Accounting Year ended 31st March, 2012 i.e. AY 2012-13. The Company has preferred Appeals before Appellate Authorities in respect of various disallowances and wrong demands raised without considering the taxes already paid by the Company. These appeals are pending and as against the tax demand of Rs. 92.95 Lakhs (PY Rs. 4.15 Lakhs), the Company has already paid an amount of Rs. 85.47 Lakhs, which was not considered by the Department, while raising the demand.

6. In respect of Electricity matters, Appeals / Writ petition are pending with TNERC / APTEL / High Court for various matters for which no provision has been made in the books of accounts to the extent of Rs. 434.18 Lakhs (PY: Rs. 428.50 Lakhs).

7. Income Tax department has filed an appeal before the Hon'ble Supreme Court / High Court against the order of the High Court / ITAT in the matter of Replacement Expenditure allowed in favour of the Company in previous years. The Hon'ble Supreme Court / High Court had remanded the matter back to the Commissioner of Income Tax / Assessing Authorities to consider the matter a fresh. On these issues there was no pending demand from the department. The Tax amount involved in these litigations is Rs. 156.19 Lakhs.

In view of the various case laws decided in favour of the Company and in the opinion of the management, there may not be any tax liability on the above matters mentioned in point no. 4 to 7 above.

8. An amount of Rs.868.58 Lakhs was outstanding at the beginning of the year towards Deposits accepted from public under the erstwhile Companies Act,1956. The Company has availed the option provided under Section 74 of the New Companies Act, 2013 to repay all the above deposits by complying with the formalities required in this regard. Accordingly, during the year 2014-15, the Company has repaid all the deposits.

9. Company's shares are listed in Bombay Stock Exchange Limited, for which listing fee for the year 2015-16 has been paid.

10. There are no dues to micro and small enterprises as at 31-03-2015 (PY: Rs. NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

11. The unadjusted units generated from the Windmills as on 31-03-2015 are 18.44 Lakhs KWH (PY 24.35 Lakhs KWH) and its monetary value of Rs. 122.93 Lakhs (PY: Rs. 140.63 Lakhs) has been included in Other Current Assets, which will be adjusted in the forthcoming months.

12. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract. During the current year Rs. 33.66 Lakhs (PY: Rs.64.32 Lakhs) has been amortized and the same is included in Finance Costs.

13. Till 31-03-2014, the Company had followed Straight Line / Written down value method of depreciation for various categories of Fixed Assets in accordance with rates specified under Schedule XIV of the Companies Act, 1956 prevailing at the time of acquisition of assets. Pursuant to implementation of Schedule II of the Companies Act, 2013 with effect from 01-04-2014, the Company has calculated the depreciation on all the assets under Straight Line Method. Accordingly:-

a) The value of assets whose useful life is exhausted as on 01-04-2014, as per the new Act, amounting to Rs. 121.65 Lakhs had been credited to the Depreciation Reserves. A sum of Rs. 80.30 Lakhs (net of Deferred Tax of Rs. 41.35 Lakhs) corresponding to the above has been adjusted in General Reserve.

b) The depreciation provided for the year ended 31-03-2015 is lower by Rs. 740 Lakhs when compared to the calculation of depreciation under the Companies Act, 1956.

14. The Company on 25-04-2014 has completed the sale of Assets and Liabilities of Rajapalayam Mills Subramaniapuram Unit in accordance with the Special Resolution passed by the Shareholders through postal ballot on 31-03-2014. Accordingly Assets relating to this Unit having WDV of Rs. 2,311.89 Lakhs [Gross Value of Rs. 3,888.53 Lakhs and depreciation withdrawn of Rs. 1,576.64 Lakhs] have been sold for Rs. 3,331.00 Lakhs and the profit of Rs. 1,019.11 Lakhs have been shown as an Exceptional Item in the Statement of Profit and Loss.

The Company has received an amount of Rs. 1,116.33 Lakhs towards the above sales consideration and balance amount has been settled by way of transfer of Term Loan and unsecured loan to the extent of Rs. 2,214.67 Lakhs.


Mar 31, 2014

(Rs. in Lakhs) As at As at 31-03-2014 31-03-2014 OTHER DISCLOSURES

1. Contingent Liabilities Liability on guarantees given to the Bankers [Refer to Note No.26 (20(i))] 46,428 51,208 Of which, actual loan amount outstanding as at the end of the year 23,592 29,925

2. Commitments

(i) Estimated amount of contracts remaining to be executed on capital account not provided 1,946 2,993

(ii) Other Commitments Liability on Letter of Credit opened for Capital Goods 299 219 Liability on Letter of Credit opened for Others 170 58

3. Sales Tax Assessment upto year ended 31st March, 2007 has been completed.

4. In respect of Service Tax matters, appeals are pending with Appellate Authorities for a demand amount of Rs. 153.02 Lakhs (PY: Rs. 118.90 Lakhs) towards manpower recruitment or supply agency services.

5. In respect of Income Tax matter, appeals are pending with Appellate Authorities for a demand amount of Rs. 4.15 Lakhs (PY: Rs. 4.15 Lakhs) towards Book Profit payable on the disallowance made U/s. 14A of the Income Tax Act, 1961.

6. In respect of Electricity matters, Appeals / Writ petition are pending with TNERC / APTEL / High Court for various matters for which no provision has been made in the books of accounts to the extent of Rs. 428.50 Lakhs.

In view of the various case laws decided in favour of the Company and in the opinion of the management, there may not be any tax liability on the above matters mentioned in point no. 4 to 6 above.

7. Details of Loans from Directors under "Loan from Related Parties" are:-

Name Closing Balance as on Interest Paid 31-03-2014 31-03-2013 2013-14 2012-13

Shri P.R. Ramasubrahmaneya Rajha 1,087.79 - 101.43 - Smt. R. Sudarsanam 90.92 35.42 9.73 1.22

8. Auditors'' remuneration (excluding Service Tax) & expenses: 2013-14 2012-13 A. Statutory Auditors a. As Auditors - Fees 2.50 2.50 - Expenses reimbursed 1.94 1.45 b. In other Capacities - Tax Audit Fees 0.40 0.30 c. Certification Work - Fees 1.36 0.81 6.20 5.06

B. Cost Auditors As Auditors 1.10 0.75 7.30 5.81

9. Company''s shares are listed in Madras Stock Exchange Limited and Bombay Stock Exchange Limited, for which listing fee for the year 2014-15 has been paid.

10. There are no dues to micro and small enterprises as at 31-03-2014 (PY: Rs.NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

11. The unadjusted units generated from the Windmills as on 31-03-2014 are 24.35 Lakhs KWH (PY: 25.31 Lakhs KWH) and its monetary value of Rs. 140.63 Lakhs (PY: Rs. 92.55 Lakhs) has been included in Other Current Assets, which will be adjusted in the forthcoming months.

12. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract. During the current year Rs. 64.32 Lakhs (PY: Rs.51.02 Lakhs) has been amortized and the same is included in Finance Costs.

13. Fixed Deposit accepted by the Company under Section 58A of the Companies Act,1956 from public will be repaid on or before 31-03-2015 irrespective of their actual maturity date in accordance with Section 74 of the Companies Act, 2013. Hence all the deposits outstanding as on 31-03-2014 has been classified under "Short Term Borrowings" under Note No.6.

14. As per Accounting Standard - 15 (Employee Benefits), the disclosures of employee benefits as defined in the Accounting Standard are given below:

(Rs. in Lakhs) 2013-14 2012-13

Defined Contribution Plan:

Employer''s Contribution to Provident Fund 254.61 211.10 Employer''s Contribution to Superannuation Fund 19.63 16.52

Details of the Post Retirement Gratuity Plan (Funded) are as follows:

Reconciliation of opening and closing balances of defined benefit plan

Defined Benefit Obligation as on 01-04-2013 505.95 465.42

Addition on Amalgamation [Refer to Note No.26(17)] 13.46 -

Current Service Cost 43.54 38.79

Interest Cost 39.89 37.72

Actuarial (gain) / loss 7.34 17.60

Benefits paid (-)77.65 (-)53.58

Defined Benefit obligation as on 31-03-2014 532.53 505.95

Reconciliation of opening and closing balances of fair value of plan assets:

Fair value of plan assets as on 01-04-2013 491.15 428.68

Addition on Amalgamation [Refer to Note No.26(17)] 9.56 -

Expected return on plan assets 43.82 40.70

Actuarial gain / (loss) (-) 2.73 (-) 0.88

Employer Contribution 18.70 76.23

Benefits paid (-) 77.65 (-) 53.58

Fair value of plan assets as on 31-03-2014 482.85 491.15

Actual Return of plan assets:

Expected return of plan assets 43.82 40.70

Actuarial gain / (loss) on plan assets (-) 2.73 (-) 0.88

Actual return on plan assets 41.09 39.82

Reconciliation of fair value of assets and obligations:

Fair value of plan assets 482.85 491.15

Present value of obligation 532.53 505.95

Difference 49.68 14.80

Unrecognized transitional liability NIL NIL

Amount recognized in Balance Sheet 49.68 14.80

Expense recognized during the year:

Current Service Cost 43.54 38.79

Interest Cost 39.89 37.72

Expected return on plan assets (-) 43.82 (-) 40.70

Actuarial (gain) / loss 10.07 18.48

Past service cost-non-vested benefits NIL NIL

Past service cost-vested benefits NIL NIL

Net Cost 49.68 54.29

Investment Details:

GOI Securities 0.35% 0.49%

State Government Securities NIL NIL

High Quality Corporate Bonds NIL NIL

Funds with LIC 99.12% 99.24%

Bank balance 0.42% 0.17%

Others 0.11% 0.10%

Total 100.00% 100.00%

Actuarial assumptions:

Indian Assured Lives (2006-08) Ultimate Table applied for Service Mortality rate YES YES

Discount rate p.a 9.10% 8.30%

Expected rate of return on plan assets p.a 9.30% 9.30%

Rate of escalation in salary p.a 3.00% 3.00%

Details of Leave Encashment Plan (Unfunded) are as follows:

Reconciliation of opening and closing balances of Obligation:

Defined Benefit Obligation as on 01-04-2013 152.68 138.46

Addition on Amalgamation [Refer to Note No.26(17)] 6.18 -

Current Service Cost 19.07 16.65

Interest Cost 11.74 10.47

Actuarial (gain) / loss 23.84 20.52

Benefits paid (-) 34.88 (-) 33.42 Defined Benefit obligation as on 31-03-2014 178.63 152.68

Reconciliation of opening and closing balances of fair value of plan assets:

Fair value of plan assets as on 01-04-2013 NIL NIL

Expected return on plan assets NIL NIL

Actuarial gain / (loss) NIL NIL

Employer Contribution 34.88 33.42

Benefits paid (-) 34.88 (-) 33.42

Fair value of plan assets as on 31-03-2014 NIL NIL

Actual Return of plan assets:

Expected return of plan assets NIL NIL Actuarial gain / (loss) on plan assets NIL NIL Actual return on plan assets NIL NIL

Reconciliation of fair value of assets and obligations:

Fair value of plan assets NIL NIL Present value of obligation 178.63 152.68 Difference 178.63 152.68

Unrecognized past service cost non vested benefits NIL NIL Amount recognized in Balance Sheet 178.63 152.68

Expense recognized during the year:

Current Service Cost 19.07 16.65 Interest Cost 11.74 10.47 Expected return on plan assets NIL NIL Actuarial (gain) / loss 23.84 20.52 Past service cost-non-vested benefits NIL NIL Past service cost-vested benefits NIL NIL Net Cost 54.65 47.64

Investment Details as on 31-03-2014:

GOI Securities NIL NIL

State Government Securities NIL NIL

High Quality Corporate Bonds NIL NIL

Funds with LIC NIL NIL

Bank balance NIL NIL

Others NIL NIL

Total NIL NIL

Actuarial assumptions:

Indian Assured Lives (2006-08) Ultimate Table applied for Service Mortality rate YES YES

Discount rate p.a 9.10% 8.30%

Expected rate of return on plan assets p.a NIL NIL Rate of escalation in salary p.a 3.00% 3.00%

15. Earnings per Share Particulars 2013-14 2012-13

Net Profit after Tax - Rs. in Lakhs (A) 2,658.55 2,377.13 Number of Equity Shares - In Lakhs (B) 73.76 73.76 Basic & Diluted earnings per share for Rs.10/- each - In Rupees (A)/(B) 36.04 32.23

16. Amalgamation

The Board of Directors approved the scheme of amalgamation of Rajapalayam Spinners Limited (RSL), a wholly owned subsidiary with the Company on 28-05-2012. The scheme of amalgamation has been filed with Honorable High Court, Madras and it was admitted by the Court in CP No. 71/2013. In terms of the scheme, the appointed date is 01-04-2012.

Pursuant to the scheme of amalgamation (''the scheme'') of the erstwhile RSL with the Company under sections 391 to 394 of the Companies Act,1956 sanctioned by the Honorable High Court of Madras on 13-06-2013, the assets and liabilities of the erstwhile RSL were transferred to and vested in the Company. Accordingly, the scheme has been given effect to in these accounts.

The amalgamation has been accounted for under the "pooling of interests" method as prescribed by AS - 14 ''Accounting for Amalgamations''. Accordingly, the accounting treatment has been given as under-

(i) The Assets, Liabilities and debit balance in the Profit and Loss account of RSL as at 1st April, 2012 have been incorporated at their book values in the financial statements of the Company.

(ii) 60,00,000 Equity Shares of Rs.10/- each, fully paid up of RSL and investments in such Equity Shares held by the Company of Rs. 526.91 Lakhs stands cancelled.

(iii) The accounts of RSL for the year ended 31st March, 2013 were finalized as a separate entity. The Net Loss after tax amounting to Rs. 159.54 Lakhs of RSL for the financial year 2012-13, has been adjusted in the balance in Profit and Loss account of the Company.

Consequently, the financial statements for the year ended 31st March, 2014 include the operations of RSL.

17. Discontinuing Operations

The Company has decided to discontinue the operations of Tissue Culture division w.e.f. January, 2013 in order to concentrate on its core business viz. Textiles. The Tissue Cultural division was contributing only 1% of the Company''s revenue.

Following are the details of the Discontinuing Operations: (Rs. in Lakhs) Particulars 2013-14 2012-13

Total Assets 231.73 354.40 Total Liabilities 0.15 4.91 Total Revenue 18.43 170.54 Total Expenses - 522.57 Profit / (Loss) for the year (Before Tax) 18.43 (352.03)

During the year, the fixed assets (other than land & building) held for sale related to the above division have been disposed off fully and there was a profit on sale of these assets to the extent of Rs.18.43 Lakhs, which are credited in the "Profit on Sale of Assets" under note No.19.

Fixed assets having written down value of Rs. 9.04 Lakhs (Cost Rs. 46.50 Lakhs and accumulated Depreciation Rs. 37.46 Lakhs) related to the above division have been transferred to other Units of the Company and included in Fixed Assets under Note No.9.

The net cash flows attributable to the discounting operations are as follows:

Net Cash Flow from 2013-14 2012-13 Operating Activities - 67.63 Investing Activities 115.54 162.56 Financing Activities (122.02) (245.90)

18. During the year, the Company made an investment of Rs. 4.37 Lakhs in the Equity Shares of M/s. A.R.S. Metals Private Limited in order to enable the Company to purchase electricity from them under Group Captive arrangement for the period from October, 2013 to March, 2014. The Company has not renewed the power purchase agreement beyond March, 2014 and hence sold the above investment for Rs. 4.37 Lakhs during March, 2014.

19. Related Party Transactions

As per Accounting Standard-18 (Related Party Disclosures) issued by the Institute of Chartered Accountants of India, the Company''s related parties are given below:

Key Managerial Personnel

Shri P.R. Ramasubrahmaneya Rajha, Chairman Smt. R. Sudarsanam, Managing Director Shri V. Gurusamy, Company Secretary

Relatives of Key Managerial Personnel

Shri P.R. Venketrama Raja, Director, son of Shri P.R. Ramasubrahmaneya Rajha Smt. Saradha Deepa, daughter of Shri P.R. Ramasubrahmaneya Rajha

Enterprises over which the above persons exercise significant influences and with which the Company had transactions during the year:

(i) Companies:

M/s. The Ramco Cements Limited

M/s. Sri Vishnu Shankar Mill Limited

M/s. The Ramaraju Surgical Cotton Mills Limited

M/s. Thanjavur Spinning Mill Limited

M/s. Ramco Industries Limited

M/s. Ramco Systems Limited

M/s. Sandhya Spinning Mill Limited

M/s. Sri Harini Textiles Limited

M/s. Ramco Management Private Limited

M/s. RCDC Securities & Investments Private Limited

M/s. Shri Harini Media Limited

M/s. Madras Chip Board Limited

M/s. Ramco Wind Farms Limited

M/s. Rajapalayam Spinners Limited [Refer to Note No.26(17)]

(erstwhile Subsidiary Company now Amalgamated)

(ii) Public Trusts

Smt. Lingammal Ramaraju Shastra Prathishta Trust P.A.C.R. Sethurammal Charity Trust P.A.C.R. Sethurammal Charities


Mar 31, 2013

1. Sales Tax Assessment upto year ended 31st March, 2007 has been completed.

2. In respect of Service Tax matters, appeals are pending with Appellate Authorities for a demand amount of Rs.118.90 Lakhs (PY: Rs.127.40 Lakhs) towards manpower recruitment or supply agency services. In respect of Income Tax matter, appeals are pending with Appellate Authorities for a demand amount of Rs.4.15 Lakhs (PY: Rs. NIL) towards Book Profit payable on the disallowance made U/s. 14A of the Income Tax Act,1961. In view of the various case laws decided in favour of the Company and in the opinion of the management, there may not be any tax liability.

3. An amount of Rs. 110.97 Lakhs (PY: Rs. NIL) considered as MAT Credit in earlier years has now been reversed based on conservative estimates and adjusted against Current Year''s MAT Credit entitlement.

4. Contribution to Gratuity Fund includes an amount of Rs. NIL (PY: Rs.25.09 Lakhs) related to past service transitional liability in accordance with Accounting Standard-15 (Employee Benefits).

5. Company''s shares are listed in Madras Stock Exchange Limited and Bombay Stock Exchange Limited, for which listing fee for the year 2013-14 has been paid.

6. There are no dues to micro and small enterprises as at 31 -03-2013 (PY: Rs.NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. The unadjusted units generated from the Windmills as on 31-03-2013 are 25.31 Lakhs KWH (PY: 16.96 Lakhs KWH) and its monetary value of Rs. 92.55 Lakhs (PY: Rs. 68.63 Lakhs) has been included in Other Current Assets.

8. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract. During the current year Rs. 51.02 Lakhs (PY: Rs.85.48 Lakhs) has been amortized and the same is included in Finance Costs.

9. An amount of Rs.0.27 Lakhs (PY: Rs. NIL) have been written off as there is permanent diminution in the value of Investments and has been charged to Statement of Profit and Loss under the Other Expenses.

10. The value of power generated from windmills and adjusted against own consumption at the Mills (captive consumption) of Rs.3,605.22 Lakhs (PY: Rs.2,230.28 Lakhs) have been set-off against cost of "Power and Fuel". The value of unadjusted units available of Rs.48.75 Lakhs as on 31-03-2013 (PY: Rs.26.64 Lakhs) and sold to the Electricity Board are shown under Income from Wind Mills. In the previous year all the above amount have been classified under Income from Wind Mills.

11. Amalgamation

The Board of Directors approved the scheme of amalgamation of Rajapalayam Spinners Limited, a wholly owned subsidiary with the Company on 28-05-2012. The scheme of amalgamation has been filed with Hon''ble High Court, Madras and it was admitted by the Court in CP No. 71/2013. In terms of the scheme, the appointed date is 01-04-2012. Pending approval by the Hon''ble High Court, no effect of the above mentioned proposed amalgamation schemes have been recognized in these financial statements.

12. Discontinuing Operations

The Company has decided to discontinue the operations of Tissue Culture division w.e.f. January, 2013 in order to concentrate on its core business viz. Textiles. The Tissue Culture division contributes only 1% of the Company''s revenue. The Company is in the process of selling all the assets of this division. The Tissue Culture division is being reported as a separate Segment "Tissue Culture" under Item No. 16 of Note No.26.

The Company has initiated the process of selling the machineries, electrical equipments, Furniture etc. of Tissue Culture Division. The Company has written down these assets to the net realizable value of Rs.100.04 Lakhs and recognised an impairment loss of Rs. 17.75 Lakhs, which is included in "Other Expenses" in the Statement of Profit and Loss. These assets have been disclosed separately as "Fixed assets pertaining to discontinuing operations held for sale" on the face of the Balance Sheet. The remaining assets (other than machineries, Electrical items etc.,) viz., land and building attributable to discontinuing operations has been classified as "Non-current Investments" under Note No.10. Though the discontinuance of Tissue Culture division is effective from January, 2013, amounts relating to Discontinuing Operations have been restated for the previous year also in order to make the amounts comparable.

13. Related Party Transactions

As per Accounting Standard-18 (Related Party Disclosures) issued by the Institute of Chartered Accountants of India, the Company''s related parties are given below:

a. Key Management Personnel & Relatives

Shri PR. Ramasubrahmaneya Rajha, Chairman Smt. R. Sudarsanam, Managing Director Shri PR. Venketrama Raja, Director

The Company''s transactions with the above persons are furnished in Item No. 6 of Note No. 26 above.

b. Enterprises over which the above persons exercise significant influences and with which the Company had transactions during the year:

M/s. Madras Cements Limited

M/s. Sri Vishnu Shankar Mill Limited

M/s. The Ramaraju Surgical Cotton Mills Limited

M/s. Thanjavur Spinning Mill Limited

M/s. Ramco Industries Limited

M/s. Ramco Systems Limited

M/s. Sandhya Spinning Mill Limited

M/s. Sri Harini Textiles Limited

c. Subsidiary Company

M/s. Rajapalayam Spinners Limited

14. Previous year figures have been regrouped / restated wherever necessary to make them comparable with the current year''s figures.

15. Figures have been rounded off to Lakhs with two decimals.


Mar 31, 2012

A. Issued, Subscribed and fully Paid-up Shares includes 62,13,850 Equity Shares (PY: 27,01,270 Equity Shares) of Rs. 10/- each were allotted as fully paid Bonus Shares by Capitalisation of Reserves.

c. Rights / Restrictions attached to Equity Shares

1. There are no special rights attached to equity shares other than those specified under provisions of various Acts.

2. The preferential allotment of 3,51,000 equity shares made on 25-11-2011 are subject to a lock-in period of three years from the date of allotment.

a) Term Loan from Banks are secured by pari-passu charge on the fixed assets of the Company and a second charge on the current assets of the Company. (Rs. in Lakhs)

As at As at

NOTE NO. 1 31-03-2012 31-03-2011

OTHER DISCLOSURES

1. Contingent Liabilities

(i) Liability on guarantees given by the Bankers 29 36

(ii) Liability on guarantees given to the Bankers 59,394 61,399

2. Commitments

(i) Estimated amount of contracts remaining to be executed on capital account not provided 1,697 1,720

(ii) Other Commitments

Liability on Letter of Credit opened for Capital Goods - 833

Liability on Letter of Credit opened for Others 94 396

3. Sales Tax Assessment upto year ended 31st March, 2002 has been completed.

4. In respect of Service Tax matters, appeals are pending with Appellate Authorities for a demand amount of Rs. 127.40 Lakhs (PY: NIL) towards manpower recruitment or supply agency services. In view of the various case laws decided in favour of the Company and in the opinion of the management, there may not be any tax liability.

5. Contribution to Gratuity Fund includes an amount of Rs. 25.09 Lakhs (PY: 25.08 Lakhs) recognized in the current period related to past service transitional liability in accordance with Accounting Standard-15 (Employee Benefits).

6. Company's shares are listed in Madras Stock Exchange Limited and Bombay Stock Exchange Limited, for which listing fee for the year 2012-13 has been paid.

7. There are no dues to micro and small enterprises as at 31-03-2012 (PY: NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

8. The unadjusted units generated from the Windmills as on 31-03-2012 are 16.96 Lakhs KWH (PY 9.07 Lakhs KWH) and its monetary value of Rs. 68.63 Lakhs (PY Rs. 38.11 Lakhs) has been included in Other Current Assets.

9. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract. During the current year Rs. 85.48 Lakhs (PY: 12.20 Lakhs) has been amortized and the same is included in Finance Costs.

10. Related Party Transactions

As per Accounting Standard-18 (Related Party Disclosures) issued by the Institute of Chartered Accountants of India, the Company's related parties are given below:

a. Key Management Personnel & Relatives

Shri P.R. Ramasubrahmaneya Rajha, Chairman

Smt. R. Sudarsanam, Managing Director

Shri P.R. Venketrama Raja, Director

The Company's transactions with the above persons are furnished in Item No. 5 of Note No. 26 above.

b. Enterprises over which the above persons exercise significant influences and with which the Company had transactions during the year:

M/s. Madras Cements Limited

M/s. Sri Vishnu Shankar Mill Limited

M/s. The Ramaraju Surgical Cotton Mills Limited

M/s. Thanjavur Spinning Mill Limited

M/s. Ramco Industries Limited

M/s. Ramco Systems Limited

M/s. Sandhya Spinning Mill Limited

M/s. Sri Harini Textiles Limited

c. Subsidiary Company

M/s. Rajapalayam Spinners Limited

(f) Assets Purchased during the year: NIL (PY: Rs. 263.69 Lakhs).

(g) Purchase of Shares of Rajapalayam Spinners Ltd : Rs.526.91 Lakhs (PY: NIL)

11. The Financial Statement for the year ended 31st March, 2011 had been prepared as per the then applicable, pre-revised Schedule VI of the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the Financial Statement for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly the previous year's figures have also been reclassified to confirm to the current year's classification.

12. Figures have been rounded off to Lakhs with two decimals.


Mar 31, 2011

(Rs . in Lakhs)

As at As at 31-03-2011 31-03-2010 1. Contingent Liabilities

(i) Liability on Letter of Credit opened

Capital Goods 833 27 Others 396 301

(ii) Estimated amount of contracts remaining to be executed on capital account not provided 1,720 299

(iii) Liability on guarantees given by the bankers 36 32

(iv) Liability on guarantees given to the bankers 61,399 57,539

2. The tax liability for the company for the financial year 2010-11 is under MAT which works out to Rs. 730 Lakhs. The tax provision of Rs.729 Lakhs made for the current year under MAT will be available for set-off within a period of 10 years and hence the entitlement MAT Credit to the same extent has been taken and included in Loans and advances as per Accounting Standard-22 (Accounting for Taxes on income).

Income tax assessments have been completed up to the accounting year ended on 31-03-2008 i.e., Assessment year 2008-09.

3. Sales Tax Assessment upto year ended 31st March, 2002 has been completed.

4. (i) The Sales Tax Authorities (Tamil Nadu) have issued demand notice to the Company for a sum of Rs. 87.55 Lakhs for the Assessment Year 2010-11 for reversal of VAT Input Credit taken on Wind Mills purchased. The company has filed a Revison Petition with the Joint Commissioner of Commercial Taxes. In the opinion of the management, there may not be any tax liability.

(ii) In respect of Service Tax matters, appeals are pending with Appellate Authorities for a demand amount of Rs. 0.48 Lakhs towards rent on immovable properties. In the opinion of the management, there may not be any tax liability.

5. Contribution to Gratuity Fund includes an amount of Rs. 25.08 Lakhs recognized in the current period related to past service transitional liability. An amount of Rs 25.08 Lakhs related to past services transitional liability remains unrecognized as at the Balance Sheet in accordance with Accounting Standard -15 (Employee Benefits).

6. The Company's shares are listed in Madras Stock Exchange Limited and Bombay Stock Exchange Limited, for which Listing Fee for the year 2011-12 has been paid.

7. There are no dues to micro and small enterprises as at 31-03-2011 (PY: NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

8. The proposed Dividends are not subject to deduction of Income Tax as the company is paying Dividend Distrubution Tax U/s 115O of the Income Tax Act, 1961.

9. The unadjusted units generated from the Windmills as on 31-03-2011 are 9.07 Lakhs KWH (PY 15.02 Lakhs KWH) and its monetary value of Rs.38.11 Lakhs (PY Rs. 54.67 Lakhs) has been included in Loans & Advances.

10. The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract. During the current year Rs.12.20 Lakhs (PY: 6.19 Lakhs) has been amortized and the same is included in interest & finance charges.

11. RELATED PARTY TRANSACTIONS

As per Accounting Standard-18 (Related Party Disclosures) issued by the Institute of Chartered Accountants of India, the Company’s related parties are given below:

Key Management Personnel & Relatives:

Shri. P.R. Ramasubrahmaneya Rajha, Chairman

Smt. R. Sudarsanam, Managing Director

Shri. P.R. Venketrama Raja, Director

The Company's transactions with the above persons are furnished in Note No. 5 and 6 above.

Enterprises over which the above persons exercise significant influences and with which the Company had transactions during the year:

M/s. Madras Cements Limited

M/s. Sri Vishnu Shankar Mill Limited

M/s. The Ramaraju Surgical Cotton Mills Limited

M/s. Thanjavur Spinning Mill Limited

M/s. Ramco Industries Limited

M/s. Ramco Systems Limited

M/s. Sandhya Spinning Mill Limited

M/s. Sri Harini Textiles Limited

M/s. Rajapalayam Spinners Private Limited

12. Additional information pursuant to provision of paragraphs III & IV of part II of the Schedule VI of the companies Act, 1956.

13. Previous year figures have been regrouped / restated wherever necessary to make them comparable with the current year's figures.

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


Mar 31, 2010

As at As at 31-03-2010 31-03-2009

1. Contingent Liabilities

(i) Liability on Letter of Credit opened

Capital Goods 27 Nil

Others 301 101

(ii) Estimated amount of contracts remaining to be executed on capital account not provided 299 79

(iii) Liability on guarantees given by the bankers 32 64

(iv) Liability on guarantees given to the bankers 57,539 61,672

2. The tax liability for the company for the financial year 2009-10 is under MAT which works out to Rs. 94.12 Lakhs. The company has MAT credit entitlement of Rs. 399 Lakhs included in Loans and Advances, of which an amount of Rs.93.12 Lakhs has been reversed during the current year as the company will not be in a position to utilize the credit within the time limit specified under the Income-tax Act, 1961. However, the tax payable to the extent of Rs.102 Lakhs for the current year under MAT will be available for set-off within a period of 7 years and hence the entitlement MAT Credit of Rs.102 Lakhs has been taken and included in Loans and advances as per Accounting Standard-22 (Accounting for Taxes on income) . The tax liability, "Income Tax-MAT" shown in the profit and loss account is net of above adjustments.

3. Sales Tax Assessment upto year ended 31st March, 2002 has been completed.

4. Contribution to Gratuity Fund includes an amount of Rs. 25.08 Lakhs recognized in the current period related to past service transitional liability. An amount of Rs. 50.16 Lakhs related to past services transitional liability remains unrecognized as at the Balance Sheet in accordance with Accounting Standard -15 (Employee Benefits).

5. The Companys shares are listed in Madras Stock Exchange Limited and Bombay Stock Exchange Limited, for which Listing Fees for the year 2010-11 has been paid.

6. There are no dues to micro and small enterprises as at 31-03-2010 (PY: NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. The unadjusted units generated from the Wind Mills as on 31-03-2010 are 15.02 Lakhs KWH (PY 7.26 Lakhs KWH) and its monetary value of Rs.54.67 Lakhs (PY Rs. 25.27 Lakhs) has been included in Loans & Advances.

8 .The premium on forward exchange contracts not intended for trading or speculation purpose is amortized as expenses over the life of the contract. During the current year Rs. 6.19 Lakhs (PY: NIL) has been amortized and the same is included in interest & finance charges.

9. As per Accounting Standard -15 (Employee Benefits), the disclosures of employee benefits as defined in the Accounting Standard are given below

10.RELATED PARTY TRANSACTIONS

As per Accounting Standard-18 (Related Party Disclosures)issued by the Institute of Chartered Accountants of India,the Companys related parties are given below:

Key Management Personnel &Relatives:

Shri PR.Ramasubrahmaneya Rajha,Chairman

Smt.R.Sudarsanam,Managing Director

Shri PR.Venketrama Raja,Director

The Companys transactions with the above persons are furnished in Note No.4 and 5 above.

Enterprises over which the above persons exercise significant influences and with which the Company had transactions during the year:

M/s.Madras Cements Limited

M/s.Sri Vishnu Shankar Mill Limited

M/s.The Ramaraju Surgical Cotton Mills Limited

M/s.Thanjavur Spinning Mill Limited

M/s.Ramco Industries Limited

M/s.Ramco Systems Limited

M/s.Sandhya Spinning Mill Limited

M/s.Sri Harini Textiles Limited

M/s.Rajapalayam Spinners Private Limited

11.Additional information pursuant to provision of paragraphs III &IV

12.Previous year figures have been regrouped /restated wherever necessary to make them comparable with the current years figures.

13.Figures have been rounded off to the nearest rupee. of part II of the Schedule VI of the Companies Act,1956.

Find IFSC