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Notes to Accounts of Sri Nachammai Cotton Mills Ltd.

Jun 30, 2014

Terms & Conditions of shares:

The Company has two class of shares namely Equity having a par value of Rs. 10/- and Preference having a par value of Rs. 100/- per share. Each Share holder is eligible for one vote per share.

In the event of liquidation, the Equity share holders are eligible to receive the remaining assets of the company after distribution of all preferential amounts in proportion of their share holding.

There are no shares alloted as fully paid without payments being received in cash, bonus shares or shares bought back in the immediately preceeding 5 years.

The 10% Cumulative Redeemable Preference shares are to be redeemed in 15 half yearly instalments commencing from the 4th year from the date of allotment i.e. 26/04/2012.

1 Interest on Bank Loans is net of interest subsidy (TUF) amounting to Rs. 13,47,837/- (Previous year Rs. 21,34,519/-)

2 Income Tax Assessment uptoA.Y.-2011 -2012 has been completed.

3 The information required to 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 the information available with the Company. There are no overdues to parties on accounts of principal amount and/or interest and accordingly no additional disclosures have been made.

4 In the opinion of the Board of Directors, assets other than fixed assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

5 Balances of certain sundry debtors, advances and sundry creditors are subject to confirmation / reconciliation, as the Company has received replies only from few parties for the confirmation statements sent by the Company. The adjustments thereof, if any, having an impact of revenue nature will be made in the year in which the same are finalized and settled.


Jun 30, 2012

OTHERS USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and the disclosures of contingent liabilities as at the date of the financial statements and reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to the estimates is recognized prospectively.

Terms & Conditions of shares:

The Company has two class of shares namely Equity having a par value of Rs. 10/- and Preference having a par value of Rs. 100/- per snare. Each Share holder is eligible for one vote per share.

In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company after distribution of all preferentiai amounts in proportion of their share holding.

1 Additional Information To Financial Statements

1 Contingent Liabilities not provided for:

a) The Company has undertaken export obligation under EPCG Scheme to Export within a period of eight years for the following years - 2005 - Rs. 43,756,024/-, 2007 - Rs. 27,524,920/-, 2010 - Rs. 124,364,744/-, 2011 - Rs. 116,144,515/-, 2012 - Rs. 32,286,384/- failing which additional customs duty of Rs. 35,341,102/- along with interest shall be payable. Of the above, the company has fulfilled obligation to the extent of Rs. 65,517,836/- upto 30.06.2012.

b) The Bank has given guarantees for Rs. 6,971,780/- (previous year - Rs. 6,364,280/-) towards payment of customs duty in respect of import of Machinery.

c) Future Lease rental payable 6,000,000 10,500,000

d) The Amount called up but not for IDBI Shares including interest 5,702,233 5,702,233

e) Some of the dismissed employees have appealed before the labour court for reinstating them along with back wages from the date of dismissal, which the company is contesting. As the quantum of liability, if any, is dependent on the orders to be passed no provision is made in the accounts as it has not reached finality.

2 Interest in respect of partly paid share is not presently ascertainable for the Current year and hence not included under IDBI partly paid shares.

3 Interest on Bank Loans disclosed under financial charges is net of interest subsidy on TUF Loan amounting to Rs. 29,23,351/- (Previous year Rs. 37,00,902/-)

4 (a) Income Tax Assessment upto the year ended 31.03.2010 (AY - 2010/2011) has been completed.

(b) (i) VAT Assessment has been completed upto 31.03.2011. (ii) CST Assessment has been completed upto 31.03.2010.

5 The information required to 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 the information available with the Company. There are no overdues to parties on accounts of principal amount and / or interest and accordingly no additional disclosures have been made.

6 (a) In the opinion of the Board of Directors, assets other than fixed assets have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

(b) Balance of certain sundry debtors, advances and sundry creditors are subject to confirmation / reconciliation, as the Company has received replies only from few parties for the confirmation statements sent by the Company. The adjustments thereof, if any, having an impact of revenue nature will be made in the year in which the same are finalized and settled.

7 Amount of Sales Tax / Value Added Tax of Rs. 2,76,75,156/- collected on Sales has not been included in the Turnover of the Company.

8 Segment Report (AS-17)

As the Company operates under single segment related to Textiles, segment reporting is not applicable to the Company for the year under review.

9 Lease Disclosure (AS-19):

Disclosure of operating lease taken by the Company as per AS-19 are as follows:

a) The Company has taken the entire Fixed Assets of Supreme Yarn Spinners Limited under cancelable operating lease, which are normally renewed on expiry.

10 Disclosure as required under listing agreement:

Statement of loans and advances to associates: (As required under Clause 32 of listing agreement with the stock exchanges) To associates: Rs. NIL

11 During the year ended 30th June 2012 the Revised Schedule V! notified under the Companies Act, 1956, has become applicable to the company and accordingly the Company has reclassified / regrouped previous year figures to confirm to this year's classifcation reclassified wherever necessary.


Jun 30, 2010

1. Contingent Liabilities not provided for:

a) The Company has undertaken export obligation under EPCG Scheme to Export within a period of eight years for the following years - 2004 - Rs.43752496/-, 2005 - Rs.24926920/-, 2006 - Rs.2598000/-, 2008 - Rs.77903360/- and 2009 -Rs.41730256/- failing which additional customs duty of Rs.23863879/- along with interest shall be payable. Of the a bove, the company has fuIfilled obligation to the extent of Rs. 1,16,90,010/- upto 30.06.2010.

b) The Bank has given guarantees for Rs.45,34,815/- (previous year - Rs.27,04,465/-) towards payment of customs duty in respect of import of Machinery.

As at As at 30.06.2010 30.06.2009 Rs. Rs.

c) Future Lease rental payable 45,48,387 30,50,000

d) The Amount called up but not paid for IDBI Shares including interest 57,02,233 57,02,233

2. Interest in respect of partly paid shares is not presently ascertainable for the Current year and hence not included under IDBI partly paid shares.

3. Estimated amount of contracts remaining to be executed on Capital account. 14,72,85,144 19,92,50,360

4. Interest on Fixed Loans disclosed under financial charges is net of interest subsidy on TUF Loan amounting to Rs.58,20,485/- (Previous year Rs.49,23,208/-)

5. a) Income Tax Assessment upto the year ended 31.03.2007 (AY - 2007/2008} has been completed, b) Sales Tax Assessment upto the year ended 31.03.2007 has been completed.

6. No provision is made for doubtful debts for Rs.34,39,782/-. The effect of such non provision is that less as stated in Profit and Loss Account is less by Rs.34,39,782/- with corresponding effect on the accumulated losses carried forward.

7. a} In the opinion of Directors, current assets, loans and advances have the value at which they are stated in the BaIance Sheet if realized in theordinary course of business. b) Balances of certain sundry debtors, advances and sundry creditors are subject to confirmation / reconciliation, as the Company has received replies only from few parties for the confirmation statements sent by the Company. The adjustments thereof, if any, having an impact of revenue nature will be made in the year in which the same are finalized and settled.

8. Amount of Sales Tax/Value Added Tax of Rs.2,30,57,360/- collected on Sales has not bean included in the Turnover of the Company.

9. Segment Report (AS-17)

As the Company operates under single segment related to Textiles, segment reporting is not applicable to , the Company for the year under review.

10. Related Party Disclosure (AS-18) (as identified by the Management): i) Names of related parties and description of relationship:

a) Associates : Supreme Yarn Spinners Ltd

Raja Yarns Private Limited

b) Key Management Personnel : 1. Shri.R Palaniappan, Chairman cum Managing Director

2. Smt. RUmayal, Joint Managing Director.

c) Relatives of Key Management : 1. Smt. R.GeethanjaliRamasamy Personnel 2. Smt. RM. Umaiyal

3. Shri. R Palaniappan (HUF)

4. Shri. MC. Ramasamy (HUF)

11- Disclosure as required under listing agreement:

Statement of loans and advances to associates: (As required under Clause 32 of listing agreement with the stock exchanges) To Associates: Rs. Nil

12. (a) There are no derivative financial instruments either for hedging or for speculation outstanding as atthe Balance Sheet date

13, Current year figures have been rounded off to the nearest rupee and figures in respect of the previous year have been regrouped and reclassified wherever necessary.


Jun 30, 2009

1. Contingent Liabilities not provided for:

a) The Company has undertaken export obligation under EPCG Scheme to Export worth of Rs. 7,12,27,416/- spread over a period of 8 years from 2004 failing which additional customs duty of Rs. 81,39,761/-along with interest at the appropriate rate shall be payable. Of the above, the company has fulfilled obligation to the extent of Rs. 93,86,190/- upto 30.06.2009

2. Tax amounting to Rs. 3,81,073/- was paid under protest to Sales Tax Department against the demand on treating premium on Hank Yarn Obligation as sales for the assessment years 1997-1998,2002-2003 & 2004-2005. However, the Company after paying the above demand under protest, has appealed and the matter is pending before the Sales Tax Tribunal.

3. Interest on Fixed Loans disclosed under financial charges is net of interest subsidy on TUF Loan amounting to Rs. 49,23,208/- (Previous year Rs. 54,38,200/-)

4. a) Income Tax Assessment upto the year ended 31.03.2007 (AY - 2007/2008) has been completed. b) Sales Tax Assessment upto the year ended 31.03.2007 has been completed.

5. No provision is made for doubtful debts for Rs. 29,13,783/-. The effect of such non provision is that less as stated in Profit and Loss Account is less by Rs. 29,13,783/- with corresponding effect on the accumulated losses carried forward.

6. a) In the opinion of Directors, current assets, loans and advances have the value at which they are stated in the Balance Sheet if realized in the ordinary course of business. b) Balances of certain sundry debtors, advances and sundry creditors are subject to confirmation / reconciliation, as the Company has received replies only from few parties for the confirmation statements sent by the Company. The adjustments thereof, if any, having an impact of revenue nature will be made in the year in which the same are finalized and settled.

7. Amount of Sales Tax /Value Added Tax of Rs. 1,48,21,764/- collected on Sales has not been included in the Turnover of the Company.

8. Segment Report (AS-17)

The Company is engaged in the business of manufacturing yarn which comes under a single segment. Hence, Segment reporting is not applicable to the Company for the year under review.

9. Related Party Disclosure (AS-18) (as identified by the Management): i) Names of related parties and description of relationship:

a) Associates : Supreme Yarn Spinners Ltd

Raja Yarns Private Limited

b) Key Management Personnel : 1. Shri.R Palaniappan, Chairman cum Managing Director

2. Smt. R Umayal, Joint Managing Director.

c) Relatives of Key Management : 1. Smt. Geethanjali Ramasamy Personnel 2. Smt. RM. Umaiyal

3. Shri.R Palaniappan (HUF)

4. Shri.MC. Ramasamy (HUF)

10. Current year figures have been rounded off to the nearest rupee and figures in respect of the previous year have been regrouped and reclassified wherever necessary.