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Notes to Accounts of Sambandam Spinning Mills Ltd.

Mar 31, 2015

1. Rights and restrictions in respect of equity shares

The company has one class of equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. In the even of liquidation of the Company, holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.1 Segment information

The company's primary segment is identified as business segment based on nature of products, risks, return and the internal business reporting system (i.e. cotton yarn) and operates in a single geographical segment as per Accounting Standard 17.

1.2 Related party disclosure

(i) Related parties with whom transactions have taken place during the year (1) Key managerial personnel

Sri S. Devarajan - Chairman and Managing Director Sri R.S. Shanmugam - Company Secretary Sri D. Niranjankumar- Chief Financial Officer

(2) Relatives of Key managerial personnel

Smt D. Anubama

Sri J. Sakthivel - Chief Technical Officer

(3) Associate

SPMM Healthcare Services Private Limited Salem IVF Centre Private Limited

(4) Parties where significant influence exists

Sambandam Siva Textiles Private Limited S. Palaniandi Mudaliar Charitable Trust Sambandam Spinning Mills Gratuity Trust

1.3 The net assets of the company were revalued as on March 31, 2009 by an external valuer on the basis of (i) estimated market value in the case of land and (ii) estimated depreciated replacement cost in the case of buildings and (iii) estimated amounts realizable/payable in the case other assets and liabilities. The resulting net surplus on such revaluation aggregating Rs.30,02,16,417 has been credited to revaluation reserve.

1.4 Pursuant to the enactment of Companies Act, 2013 and according to the application guide on the provisions of Schedule II to the Companies Act, 2013, a sum of Rs.35,33,337, being the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on its original cost, has been transferred to General Reserve from Revaluation Reserve account.

1.5 Pursuant to the enactment of Companies Act, 2013, the Company has applied the estimated useful lives as specified in Schedule II, except in respect of certain assets as disclosed in Accounting Policy on Depreciation/Amortization. Accordingly the unamortized carrying value is being depreciated/amortised over the revised/remaining useful lives. The written down value of Fixed Assets whose lives have expired as at April 1, 2014 have been adjusted net of tax, in the opening balance of profit and loss account amounting to Rs.25,62,989.

1.6 The information 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. There are no overdues to parties on account of principal amount and/or interest and accordingly no additional disclosures have been made; and (ii) There are no amounts remaining unpaid or unclaimed for a period of seven years in respect of unpaid dividend, matured fixed deposits and interest thereon from the date they became payable by the company and hence there are no amounts remaining to be credited to the Investor Education and Protection Fund.

1.7 Derivatives - The company uses derivative financial instruments such as forward contracts and option to hedge certain currency exposures, present and anticipated, denominated mostly in US dollars, Euro and Swiss Franks. Generally such contracts are taken for exposures materializing in the next six months. The company actively manages its currency rate exposures and uses these derivatives to mitigate the risk from such exposures. The company has hedged exposure of US $ Nil (March 31, 2014 US $ Nil) as at March 31, 2015 and has a net unhedged exposure of US $ Nil (March 31, 2014 US$ Nil) as at March 31,2015.

1.8 Raw material consumed - others include consumption of yarn for manufacture of double yarn.

1.9 Power and fuel is net of value of power generated by Wind energy converters Rs.10,59,11,210 (2013-14 Rs.10,06,72,287).

1.10 Repairs to buildings include amortization of cost of structures on leasehold land of Rs.4,88,042 (2013-14 Rs.3,25,398).

1.11 Human resources - Particulars of managerial remuneration (i) To Managing Director - Salary Rs.21,60,000 (2013-14 Rs.21,60,000), Perquisites Rs.14,40,000 (2013-14 Rs. 14,40,000); and (ii) To Joint Managing Directors - Salary Rs.24,00,000 (2013-14 Rs.24,00,000), Perquisites Rs.12,00,000 (2013-14 Rs.12,00,000).

1.12 Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof- Rs.2,80,000 (2013-14 Rs.Nil).

1.13 Depreciation/amortisation - (i) Amortised cenvat credit of Rs.2,69,722 (2013-14 Rs.4,12,185) deducted from capital reserve has been netted against the depreciation charge relating to the concerned plant and machinery.

(i) Term loans from banks aggregating Rs.40,85,91,477 (March 31, 2014 Rs.57,85,50,306) are secured by a first charge on the Company's fixed asset the charge stated in (ii) to (iv) infra and secured by a second charge on the Company's current assets;

(ii) Term loans from banks to an extent of Rs. Nil (March 31, 2014 Rs.2,51,00,000) are secured by a first charge on the Company's wind mills;

(iii) Term loans from banks to an extent of Rs.8,55,868 (2013-14 Rs.l 1,69,318) are secured by hypothecation of certain buses and cars;

(iv) Term loan from Kodak Mahindra Prime Limited of Rs.3,07,583 (2013-14 Rs.30,92,617) is secured by hypothecation of car;

(v) Cash credit/short term loan/buyers credit facilities(FC) are secured by a first charge on the Company's current assets except the stock of cotton pledged for goods loan facility and by a second charge on the Company's fixed assets excluding the charges mentioned in (ii) to (iv) supra;

(vi) Goods loan facilities are secured by pledge of cotton; and ( vii) All the above loans are guaranteed by four directors.

In the above acturial valuation the estimated of future salary increases have reckoned the effect of inflation, seniority, promotion and other relevant factors.

ii) Gratuity fund is administered through group gratuity scheme with SBI Life Insurance Company Ltd. and the Gratuity Trust through trustees.

iii) During the year, the company has recognised the following amounts in the Statement of Profit and Loss:

Salaries, wages and bonus include compensated absences of Rs. 18,13,729 (2013-14 Rs.16,40,974)

Contribution to provident, gratuity and other funds include contribution to provident fund and family pension fund contribution of Rs.76,86,597 (2013-14 Rs.68,34,888) and gratuity fund of Rs. 15,90,406 (2013-14 Rs.40,68,155).

Workmen and staff welfare expenses include contribution to employees state insurance of Rs.32,59,811 (2013-14 Rs.31,90,655).


Mar 31, 2014

1. Rights and restrictions in respect of equity shares

The Company has one class of equity shares having a par value of Rs.10 each. Each shareholder is el igible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeing. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

For the year For the year ended ended March 31, 2014 March 31, 2013 Rupees Rupees

1.1 Contingent liabilities

(i) Claims against the company not acknowledged as debts 4,59,05,014 4,59,05,014

(ii) Guarantees 96,66,200 96,66,200

(ii) Bills discounted with banks — —

Out flow relating to above not practicable to indicate in view uncertainties involved

1.2 The net assets of the company were revalued as on March 31, 2009 by an external valuer on the basis of

(i) estimated market value in the case of land and

(ii) estimated depreciated replacement cost in the case of buildings and

(iii) estimated amounts realizable/payable in the case other assets and liabilities. The resulting net surplus on such revaluation aggregating Rs.30,02,16,417 has been credited to revaluation reserve.

1.3 The information 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.

(i) There are no overdues to parties on account of principal amount and/or interest and accordingly no additional disclosures have been made; and

(ii) There are no amounts remaining unpaid or unclaimed for a period of seven years in respect of unpaid dividend, matured fixed deposits and interest thereon from the date they became payable by the company and hence there are no amounts remaining to be credited to the Investor Education and Protection Fund.

1.4 Derivatives - The company uses derivative financial instruments such as forward contracts and option to hedge certain currency exposures, present and anticipated, denominated mostly in US dollars, Euro and Swiss Franks. Generally such contracts are taken for exposures materializing in the next six months. The company actively manages its currency rate exposures and uses these derivatives to mitigate the risk from such exposures. The company has hedged exposure of US $ Nil (March 31, 2013 US $ 7,01,932) as at March 31, 2013 and has a net unhedged exposure of US $ Nil (March 31, 2013 US$ 1,31,400) as at March 31, 2013.

1.5 Raw material consumed - others include consumption of yarn for manufacture of double yarn.

1.6 Power and fuel is net of value of power generated by Wind energy converters Rs.10,06,72,287 (2012-13 Rs.12,52,72,864).

1.7 Repairs to buildings include amortization of cost of structures on leasehold land of Rs.3,25,398 (2012-13 Rs.3,25,398).

1.8 Human resources - Particulars of managerial remuneration

(i) To Managing Director - Salary Rs.21,60,000 (2012-13 Rs.21,60,000),

Perquisites Rs.14,40,000 (2012-13 Rs.14,40,000); and

(ii) To Joint Managing Directors - Salary Rs.24,00,000 (2012-13 Rs.24,00,000),

Perquisites Rs.12,00,000 (2012-13 Rs.12,00,000).

1.9 Depreciation/amortisation -

(i) Amortised cenvat credit of Rs.4,12,185 (2012-13 Rs.5,05,752) deducted from capital reserve has been netted against the depreciation charge relating to the concerned plant and machinery; and

(ii) Depreciation for the year computed on revalued assets includes a charge of Rs.37,64,401 (2012-13 Rs.37,64,401) being the excess depreciation computed by the method followed by the company prior to revaluation and the same has been transferred from Revaluation reserve to the Profit and Loss account.


Mar 31, 2013

1.1 Contingent liabilities

(i) Claims against the company not acknowledged as debts 4,59,05,014 3,92,50,691

(ii) Guarantees 96,66,200 96,66,200

(ii) Bills discounted with banks — 20,75,857 Out flow relating to above not practicable to indicate in view uncertainties involved

1.2. Segment information

The company''s primary segment is identified as business segment based on nature of products, risks, return and the internal business reporting system (i.e. cotton yam) and operates in a single geographical segment as per Accounting Standard 17.

1.3 Related party disclosure

(i) Related parties with whom transactions have taken place during the year

(1) Key management personnel : Sri S. Devarajan - Chairman and Managing Director

(2) Associate . SPMM Healthcare Services Private Limited

(3) Parties where significant Sambandam Siva Textiles Private Limited influence exists - S. Palaniandi Mudaliar Charitable Trust

Sambandam Spinning Mills Gratuity Trust

1.4 The net assets of the company were revalued as on March 31, 2009 by an external valuer on the basis of (i) estimated market value in the case of land and (ii) estimated depreciated replacement cost in the case of buildings and (iii) estimated amounts realizable/payable in the case other assets and liabilities. The resulting net surplus on such revaluation aggregating Rs.30,02,16,417 has been credited to revaluation reserve.

1.5 The information 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. There are no overdues to parties on account of principal amount and/or interest and accordingly no additional disclosures have been made; and (ii) There are no amounts remaining unpaid or unclaimed for a period of seven years in respect of unpaid dividend, matured fixed deposits and interest thereon from the date they became payable by the company and hence there are no amounts remaining to be credited to the Investor Education and Protection Fund.

1.6 Derivatives - The company uses derivative financial instruments such as forward contracts and option to hedge certain currency exposures, present and anticipated, denominated mostly in US dollars, Euro and Swiss Franks. Generally such contracts are taken for exposures materializing in the next six months. The company actively manages its currency rate exposures and uses these derivatives to mitigate the risk from such exposures. The company has hedged exposure of US $ 7,01,932 (March 31, 2012 US $ Nil) as at March 31, 2013 and has a net unhedged exposure of US $ 1,31,400 (March 31, 2012 US$ Nil) as at March 31,2013.

1.7 Raw material consumed -others include consumption of yarn for manufacture of double yarn.

1.8 Power and fuel are (i) net of value of power generated by Wind energy converters Rs.12,52,72,864 (2011 -12 Rs.7,87,59,616) and (ii) after reckoning the reversal of carbon credit accrued in prior years of Rs. Nil (2011-12 Rs.50,28,883), as a measure of abundant caution, due to (a) rejection of claim for the credit by concerned sanctioning authorities and (b) inordinate delay in issue of validation report even after completion of inspection and documentation.

1.9 Repairs to buildings include amortization of cost of structures on leasehold land of Rs.3,25,398 (2011 -12 Rs.3,25,398).

1.10 Human resources - Particulars of managerial remuneration (i) To Managing Director - Salary Rs.21,60,000 (2011-12 Rs.21,60,000), Perquisites Rs. 14,40,000 (2011-12 Rs. 14,40,000); and (ii)To Joint Managing Directors - Salary Rs.24,00,000 (2011 -12 Rs.24,00,000), Perquisites Rs. 12,00,000 (2011 -12 Rs. 12,00,000).

1.11 Depreciation/amortisation - (i) Amortised cenvat credit of Rs.5,05,752 (2011-12 Rs.7,95,724) deducted from capital reserve has been netted against the depreciation charge relating to the concerned plant and machinery; and (ii) Depreciation for the year computed on revalued assets includes a charge of Rs.37,64,401 (2011-12 Rs.37,64,401) being the excess depreciation computed by the method followed by the company prior to revaluation and the same has been transferred from Revaluation reserve to the Profit and Loss account.

1.12 The figures for the previous periods have been reclassified/regrouped/amended, wherever necessary.


Mar 31, 2012

1.1 Contingent liabilities

(i) Claims against the company not acknowledged as debts 3,92,50,691 3,36,24,998

(ii) Guarantees 96,66,200 96,66,200

(iii) Bills discounted with banks 20,75,857 4,37,29,637

Out flow relating to above not practicable to indicate in view uncertainties involved

1.2 Segment information

The company's primary segment is identified as business segment based on nature of products, risks, return and the internal business reporting system (i.e. cotton yarn) and operates in a single geographical segment as per Accounting Standard 17.

1.3 Related party disclosure

(i) Related parties with whom transactions have taken place during the year

(1) Key management personnel Sri S. Devarajan - Chairman and Managing Director

(2) Associate SPMM Healthcare Services Private Limited

(3) Parties where significant S. Palaniandi Mudaliar Charitable Trust and influence exists Sambandam Spinning Mills Graluity Trust

1.4 the net assets of the company were revalued as on March 31,2009 by an external valuer on the basis of (i) estimated market value in 1he case of land and (ii) estimated depreciated replacement cost in the case of buildings and (iii) estimated amounts realizable/payable in the case other assets and liabilities. The resulting net surplus on such revaluation aggregating to Rs.30,02,16,417 has been credited to revaluation reserve.

1.5 The information 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 1he basis of information available with the company. There are no overdue to parties on account of principal amount and/or interest and accordingly no additional disclosures have been made; and (ii) There are no amounts remaining unpaid or unclaimed for a period of seven years in respect of unpaid dividend, matured fixed deposits and interest thereon from the date they became payable by the company and hence there are no amounts remaining to be credited to the Investor Education and Protection Fund.

1.6 Derivatives - The Company uses derivative financial instruments such as forward contracts and option to hedge certain currency exposures, present and anticipated, denominated mostly in US dollars, Euro and Swiss Franks. Generally such contracts are taken for exposures materializing in 1he next six months. The Company actively manages its currency rate exposures and uses these derivatives to mitigate the risk from such exposures. The Company has hedged exposure of US $ Nil (March 31,2011 US $ 15,32,060) as at March 31, 2012 and has a net unhedged exposure of US $ Nil (March 31, 2011 US$5,76,159).

1.7 Raw material consumed - others include consumption of yarn for manufacture of double yarn.

1.8 Power and fuel are (i) net of value of power generated by Wind energy converters Rs.7,87,59,616 (2010-11 Rs.8,02,95,274); (ii) net of income by way of carbon credit of Rs.Nil (2010-11 Rs.50,28,883); and(ii) after reckoning 1he reversal of carbon credit accrued in prior years of Rs.50,28,883 (2010- 11 Rs.2,17,83,937), as a measure of abundant caution, due to (a) rejection of claim for the credit by concerned sanctioning authorities and (b) inordinate delay in issue of validation report even after completion of inspection and documentation.

1.9 Repairs to buildings include amortization of cost of structures on leasehold land of Rs.3,25,398 (2010-11 Rs.3,25,398).

1.10 Human resources - Particulars of managerial remuneration (i) To Managing Director - Salary Rs.21,60,000 (2010-11 Rs.21,60,000), Perquisites Rs.l4,40,000 (2010-11 Rs. 14,40,000); and (ii) To Joint Managing Directors - Salary Rs.24,00,000 (2010-11 Rs.24,00,000), Perquisites Rs.l 2,00,000 (2010-11 Rs.l 2,00,000).

1.11 Depreciation/amortisation - (i) Amortised cenvat credit of Rs.7,95,724 (2010-11 Rs.1 2,67,410) deducted from capital reserve has been netted against the depreciation charge relating to 1he concerned plant and machinery; and (ii) Depreciation for 1he year computed on revalued assets includes a charge of Rs.37,64,401 (2010-11 Rs.37,64,401) being the excess depreciation computed by 1he method followed by the company prior to revaluation and the same has been transferred from Revaluation reserve to the Profit and Loss account.

In the above actuarial valuation, the estimate of future salary increases have reckoned the effect of inflation, seniority, promotion and other relevant factors.

ii) Gratuity fund is administered through group gratuity scheme with SBI Life Insurance and by the Gratuity Trust through trustees.

iii) During the year, the company has recognised the following amounts in the Statement of Profit and Loss: Salaries, wages and bonus include compensated absences of Rs.6,05,967 (2010-11 Rs.6,17,078)

Contribution to provident, gratuity and other funds include contribution to provident fund and family pension fund contribution of Rs.63,28,918 (2010-11 Rs.60,47,768) and gratuity fund of Rs.79,23,091 (2010-11 Rs.49,83,211).

Workmen and staff welfare expenses include contribution to employees state insurance of Rs.22,65,296 (2010-11 Rs.24,32,815)

1.12 During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. Accordingly the Company has reclassified/regrouped/amended the previous year's figures in accordance with the requirements applicable in the current year.


Mar 31, 2011

1. Issued and subscribed capital include 24,85,900 (March 31, 2010 - 24,85,900) Equity shares allotted as fully paid up by way of bonus shares by capitalisation of part of General reserve.

2. Movement in reserves - (i) Additions: Amount appropriated from the profit and loss account to General reserve Rs. 10,00,00,000 (March 31,2010 Rs.1,50,00,000); (ii) Deduction: Amount amortised from Cenvat credit relating to capital assets and adjusted in Depreciation in Schedule 2.8 Rs. 12,67,410 (March 31, 2010 Rs. 17,11,562).

3. Particulars for secured loans - (i) Term loans from banks to an extent of Rs.81,56,17,148 (March 31, 2010 Rs.88,40,29,004) are secured by a first charge on the Company's immovable and movable properties (excluding book debts) subject to the charge stated in (iii) infra, (ii) Term loans from banks to an extent of Rs.20,57,30,489 (March 31, 2010 Rs.22,56,15,094) are secured by hypothecation of certain specific assets, (iii) Cash credit/short term loan/buyer's credit facilities are secured by a first charge on the Company's current assets except the stock of cotton pledged for goods loan facility and by a second charge on the Company's immovable and movable properties (other than those covered under the first charge mentioned in (i) supra, (iv) Goods loan facilities ate secured by pledge of stock of cotton; and (v) All the above loans are guaranteed by four directors.

4. Unsecured loans include - (i) fixed deposits from directors Rs.7,15,000 (March 31, 2010 Rs. 12,15,000), and (ii) amounts repayable within twelve months from the balance sheet date Rs. 1,86,36,400 (March 31, 2010Rs.2,65,20,025).

5. Fixed assets - (i) Gross block includes Rs.33,31,48,842 added on revaluation of land and buildings as at March 31, 2009 based on report by an external valuer; and (ii) Deductions under plant and machinery includes terminal excise duty refund under Export Promotion Capital Goods Scheme, of Rs.61,37,531 (March 31, 2010 Rs.73,68,389).

6. The net assets of the company were revalued as on March 31,2009 by an external valuer on the basis of (i) estimated market value in the case of land, (ii) estimated depreciated replacement cost in the case of other fixed assets; and (iii) estimated amounts realisable/payable in the case of other assets and liabilities. The resulting net surplus on such revaluation aggregating to Rs.30,02,16,417 has been credited to revaluation reserve.

7. (i) Investments are long term, non trade and unquoted unless otherwise stated; (ii) Cost of quoted investments Rs.60,272 (March 31,2010 Rs.27,972); (iii) Market value of quoted investments Rs.1,46,167 (March 31, 2010 Rs.1,13,810); and (iv) Cost of unquoted investments Rs.2,09,75,000 (March 31, 2010 Rs.2,09,75,000).

8. Loans and advances include Income tax paid in advance/deducted at source, net of provisions therefor. The income tax liability for March 31,2011 as minimum alternate tax under section 115JB of the Income tax Act, 1961 amounting to Rs.3,85,00,000 is eligible to be carried forward and set off against future income tax under section 115JAA of the Income tax Act, 1961 and hence the minimum alternate credit entitlement Is reckoned in the above head.

9. (i) The information 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. There are no overdues to parties on account of principal amount and/a interest and accordingly no additional disclosures have been made; and (ii) There are no amounts remaining unpaid or unclaimed for a period of seven years in respect of unpaid dividend, matured fixed deposits and interest thereon from the date they became payable by the company and hence there are no amounts remaining to be credited to the Investor Education and Protection Fund.

10. Derivatives - The company uses derivative financial instruments such as forward contracts and option to hedge certain currency exposures, present and anticipated, denominated mostly in US dollars, Euro and Swiss Franks. Generally such contracts are taken for exposures materializing in the next six months. The company actively manages its currency rate exposures and uses these derivatives to mitigate the risk from such exposures. The company has hedged exposure of US $ 15,32,060 (March 31, 2010 US $ 53,85,348) as at March 31, 2011 and has a net unhedged exposure of US $ 5,76,159 (March 31, 2010 US$1,41,199).

11. Estimated capital expenditure commitments (net of advances) Rs.10,71,4 7,366 (March 31, 2010 Rs.16,66,62,174).

12. Contingent liabilities: (i) Claims against the Company not acknowledged as debts Rs.2,06,08,526 (March 31, 2010 Rs. 1,42,30,330); (ii) Guarantees issued by the company's bankers towards disputed power tariff concession availed Rs.96,66,200 (March 31,2010 Rs.96,66,200), (iii) Bills discounted with bankers Rs.4,37,29,637 (March 31, 2010 Rs.2,83,55,291) and (iv) Other contingent liabilities Rs. 1,30,16,472 (March 31, 2010 Rs.92,41,174).

13. Sales and conversion charges earned - Power generated by Wind energy converters represents sale of power (net of captive consumption) generated by wind energy converters.

14. Other income - Miscellaneous income includes net gain on foreign currency transaction and translation (other than considered as financial cost) Rs.2,70,038 (2009-10 Rs. Nil).

15. Raw material consumed - others include consumption of yarn for manufacture of double yarn in 2010-11.

16. Power and fuel are (i) net of value of power generated by Wind energy converters Rs.8,02,95,274 (2009-10 Rs.8,82,48,105); (ii) net of income by way of carbon credit of Rs.50,28,883 (2009-10 Rs. 1,07,25,017); and (ii) after reckoning the reversal of carbon credit accrued in prior years of Rs.2,17,83,937 (2009-10 Rs. Nil), as a measure of abundant caution, due to (a) rejection of claim for the credit by concerned sanctioning authorities and (b) inordinate delay in issue of validation report even after completion of inspection and documentation.

17. Repairs to buildings include amortization of cost of structures on leasehold land of Rs.3,25,398 (2009- 10 Rs.3,25,398) and repairs to plant and machinery include amortization of cost of planned replacement of worn out parts of plant and machinery Rs.Nil (2009-10 Rs.36,44,514).

18. Human resources - Particulars of managerial remuneration (i) To Managing Director - Salary Rs.21,60,000 (2009-10 Rs.21,60,000), Perquisites Rs.14,40,000 (2009-10 Rs. 14,40,000); and (ii) To Joint Managing Directors - Salary Rs.24,00,000 (2009-10 Rs.24,00,000), Perquisites Rs. 12,00,000 (2009- 10 Rs. 12,00,000).

19. Other expenses - Miscellaneous expenses include (i) payments to auditors for Financial audit Rs.3,50,000 (2009-10 Rs.2,80,000), Cost audit Rs.44,000 (2009-10 Rs.44,000), Taxation work Rs.1,55,000 (2009-10 Rs.1,20,000), Other work Rs.1,08,000 (2009-10 Rs.78,000) and Expenses reimbursed to Statutory auditors Rs.1, 10,135 (2009-10 Rs.98,479), Cost auditors Rs.9,867 (2009-10 Rs.16,184); (ii) net loss on foreign currency transaction and translation (other than considered as financial cost) Rs.Nil (2009-10 Rs.2,21,661).

20. Financial expenses - (I) Interest paid on fixed loans Rs.9,93,87,257 (2009-10 Rs.9,25,90,369) includes Rs.40,625 (2009-10 Rs.36,509) to the Managing Director; and (ii) Bank and other financial charges Include (a) amortisation of loan raising expenses Rs. 5,45,274 (2009-10 Rs.6,53,463) and (b) foreign currency transaction and translation loss (net) Rs.87,56,436 (2009-10 gain (net) Rs.47,54,794).

21. Depreciation/amortisation - (i) Amortised cenvat credit deducted from capital reserve has been netted against the depreciation charge relating to the concerned plant and machinery; and (ii) Depreciation for the year computed on revalued assets includes a charge of Rs.37,64,401 (2009-10 Rs.37,64,401) being the excess depreciation computed by the method followed by the company prior to revaluation and the same has been transferred from Revaluation reserve to the Profit and Loss account.

22 Segment information

The Company is principally engaged in a single business segment viz.. cotton yarn and operates in a single geographical segment as per Accounting Standard 17 on 'Segment Reporting'.

23 Related party disclosure

(i) Related parties with whom transactions have taken place during the year

(1) Key management personnel - Sri S. Devarajan - Chairman and Managing Director

(2) Associate - SPMM Healthcare Services Private Limited

(3) Parties where significant - (i) S. Palaniandi Mudaliar influence exists Charitable Trust (ii) sambandam Spinning Mills Gratuity Trust

24 Employee benefits -

(ii) Gratuity is administered through Group Gratuity Scheme with SBI Life Insurance Company Limited and by the Gratuity trust through trustees.

(iii) During the year, the Company has recognised the following amounts in the Profit and Loss account in Schedule 2.5:

- Salaries, wages and bonus include compensated absences of Rs. 10,98,078 (2009-10 Rs. 20,30,482).

- Contribution to provident, gratuity and other funds include contribution to Provident fund and family pension fund contribution of Rs. 60,47,768 (2009-10 Rs.53,29,346) and gratuity fund of Rs.49,83,211 (2009-10 Rs.36,33,803).

- Workmen and staff welfare expenses include contribution to Employee State Insurance of Rs.24,32,815 (2009-10 Rs.20,59,440).

25 Figures for the previous year have been regrouped reclassified to make them comparable to the classification adopted in the current year.


Mar 31, 2010

1 Segment information

The Company is principally engaged in a single business segment viz.. cotton yarn and operates in one geographical segment as per Accounting Standard 17 on Segment Reporting.

2 Related party disclosure

(i) Related parties with whom transactions have taken place during the year

(1) Key management personnel - Sri S. Devarajan - Chairman and Managing Director

(2) Associate - SPMM Healthcare Services Private Limited

(3) Parties where significant - S. Palaniandi Mudaliar Charitable Trust influence exists . sambandam Spinning Mills Gratuity Trust

3 Issued and subscribed capital include 24,85,900 (March 31, 2009 - 24,85,900) Equity shares allotted as fully paid up by way of bonus shares by capitalisation of part of General reserve.

4 Movement in reserves - (i) Additions: (1) Amount appropriated from the profit and loss account to General reserve Rs. 1,50,00,000 (March 31, 2009 Rs. Nil); and (2) Amount credited to Revaluation. reserve on account of revaluation of net assets of the Company Rs. Nil (March 31, 2009 Rs.30,02,16,417); (ii) Deduction: Amount amortised from Cenvat credit relating to capital assets and adjusted in Depreciation in Schedule 2.8 Rs.l 7,11,562 (March 31, 2009 Rs. 18,10,284).

5 Particulars for secured loans - (i) Term loans from banks to an extent of Rs.88,40,29,004 (March 31, 2009 Rs.87,98,19,756) are secured by a first charge on the Companys immovable and movable properties (excluding book debts) subject to the charge stated in (iii) infra, (ii) Term loans from banks to an extent of Rs.22,56,15,094 (March 31, 2009 Rs.24,23,48,662) are secured by hypothecation of certain specific assets, and (iii) Cash credit/buyers credit facilities are secured by a first charge on the Companys current assets and by a second charge on the Companys immovable and movable properties (other than those covered under the first charge mentioned in (i) supra, and (iv) All the loans are guaranteed by four directors.

6 Unsecured loans include - (i) fixed deposits from directors Rs. 12,15,000 (March 31, 2009 Rs.65,000), and (ii) amounts repayable within twelve months from the balance sheet date Rs.2,65,20,025 (March 31, 2009 Rs.l,85,27,437).

7 Fixed assets - (i) Cost of additions and capital work-in-progress includes borrowing cost of Rs. Nil (March 31, 2009 Rs. 1,48,66,583) and other expenses in the course of construction Rs. Nil (March 31, 2009 Rs.96,56,514); (ii) Deductions under plant and machinery includes terminal excise duty refund under Export Promotion Capital Goods Scheme, of Rs.73,68,389 (March 31, 2009 Rs.l,21,64,036); and (iii) Gross block includes Rs.33,31,48,842 added on revaluation of land and buildings as at March 31, 2009 based on report by an external valuer.

8 The net assets of the Company were revalued as on March 31, 2009 by an external valuer on the basis of (i) estimated market value in the case of land, (ii) estimated depreciated replacement cost in the case of other fixed assets; and (iii) estimated amounts realisable/payable in the case of other assets and liabilities. The resulting net surplus on such revaluation aggregating to Rs,30,02,16,417 has been credited to revaluation reserve.

9 All investments are long term, non trade and quoted unless otherwise stated. Market value of quoted investments Rs.l,13,810 (March 31, 2009 Rs.61,940).

10 Loans and advances Include Income tax paid in advance/deducted at source, net of provisions therefor. The income tax liability for March 31, 2010 as minimum alternate tax under section 115JB of the Income tax Act, 1961 amounting to Rs.96,00,000 is eligible to be carried forward and set off against future income tax under section 115JAA of the Income tax Act, 1961 and hence the minimum alternate credit entitlement is reckoned in the above head.

11 (i) The information 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. There are no overdues to parties on account of principal amount and/or interest and accordingly no additional disclosures have been made; and (ii) There are no amounts remaining unpaid or unclaimed for a period of seven years in respect of unpaid dMdend, matured fixed deposits and interest thereon from the date they became payable by the Company and hence there are no amounts remaining to be credited to the Investor Education and Protection Fund.

12 Derivatives - The Company uses derivative financial instruments such as forward contracts and option to hedge certain currency exposures, present and anticipated, denominated mostly in US dollars, Euro and Swiss Franks. Generally such contracts are taken for exposures materializing in the next six months. The Company actively manages its currency rate exposures and uses these derivatives to mitigate the risk from such exposures. The Company has hedged exposure of US $ 53,85,348 (March 31, 2009 US $ 7,18,636) as at March 31, 2010 and has a net unhedged exposure of US $ 1,41,199 (March 31, 2009 US$10,52,570).

13 Estimated capital expenditure commitments (net of advances) Rs. 16,66,62,174 (March 31, 2009 Rs. 16,04,74,658).

14 Contingent liabilities: (i) Claims against the Company not acknowledged as debts Rs.57,64,988 (March 31, 2009 Rs. 13,38,921); (ii) Guarantees issued by the Companys bankers towards disputed power tariff concession availed Rs.96,66,200 (March 31, 2009 Rs.96,66,200), (Hi) Bills discounted with bankers Rs.2,83,55,291 (March 31,2009 Rs.2,84,65,403) and (fv) Other contingent liabilities Rs.92,41,174 (March 31, 2009 Rs. Nil).

15 Raw materials consumed - others include consumption of yarn for manufacture of double/two-for- one yarn in 2008-09.

16 Power and fuel are net of (i) amount realised towards power generated through Wind energy converters and adjusted against the cost of power purchased from state electricity board Rs.l 0,11,26,530 (2008-09 Rs.8,59,41,751) and (ii) income from carbon credits Rs. 1,07,25,017 (2008-09 Rs. 1,65,58,074).

17 Repairs to buildings include amortization of cost of structures on leasehold land of Rs.3,25,398 (2008- 09 Rs.3,25,380) and repairs to plant and machinery include amortization of cost of planned replacement of worn out parts of plant and machinery Rs.36,44,514 (2008-09 Rs.26,64,072).

18 Human resources - Particulars of managerial remuneration (i) To Managing Director - Salary Rs.21,60,000 (2008-09 Rs.l4,40,000), Perquisites Rs.l4,40,000 (2008-09 Rs.9,60,000), (ii) To Joint Managing Directors - Salary Rs.24,00,000 (2008-09 Rs.l6,00,000), Perquisites Rs.l2,00,000 (2008-09 Rs.l0,40,000), (iii) To Whole-time Director - Salary Rs. Nil (2008-09 Rs.7,20,000), Perquisites Rs. Nil (2008-09 Rs.4,80,000).

19 Other expenses - (i) Donation and charity include contribution to Communist Party of India Rs. Nil (2008-09 Rs.l0,000), (ii) Miscellaneous expenses include payments to auditors for Financial audit Rs.2,80,000 (2008-09 Rs.2,80,000), Cost audit Rs.44,000 (2008-09 Rs.44,000), Taxation work Rs. 1,20,000 (2008-09 Rs.95,000), Other work Rs. 78,000 (2008-09 Rs.55,000) and Expenses reimbursed to Statutory auditors Rs.98,479(2008-09 Rs.89,581), Cost auditors Rs.l6,184 (2008-09 Rs.20,364).

20 Financial expenses - (i) Interest paid on fixed loans Rs.9,49,89,428 (2008-09 Rs.9,35,23,672) includes Rs.36,509 (2008-09 Rs. Nil) to the Managing Director; and (ii) Bank and other financial charges include amortisation of loan raising expenses Rs. 6,53,463 (2008-09 Rs.9,40,010).

21 Depreciation/amortisation - (i) Amortised cenvat credit deducted from capital reserve has been netted against the depreciation charge relating to the concerned plant and machinery; and (ii) Depreciation for the year computed on revalued assets includes a charge of Rs.37,64,401 (2008-09 Rs. Nil) being the excess depreciation computed by the method followed by the Company prior to revaluation and the same has been transferred from Revaluation reserve to the Profit and Loss account.

22 Figures for the previous year have been regrouped to make them comparable to the classification adopted in the current year.

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