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Notes to Accounts of Sri Ramakrishna Mills (Coimbatore) Ltd.

Mar 31, 2015

1. SHARE CAPITAL:

NOTE:

The Company has only one class of equity shares having a par value of Rs.10 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 allotted as fully paid without payments being received in cash, bonus shares or shares bought back in the immediate preceding 5 previous years.

(b) Customs department filed an appeal before Madras High Court against the orders of Settlement Commission under Advance License Scheme in respect of reduction of Interest of Rs.8.26 lakhs allowed to us.

(c) There is a demand of Rs.3,19,712/- raised by Andhra Pradesh Electricity Department in respect of Fuel Surcharge adjustment (FSA). The same is disputed by the Company before Hon'ble High Court and pending orders no provision is made in the accounts.

2. The Balance of Debtors and Creditors, which in the absence of confirmations wherever necessary are taken as per the books and are subject to reconciliation and adjustments thereon having an impact of revenue nature, if any will be made in the year in which the same are finalized and settled.

3. In the opinion of Directors, assets other than fixed assets and non-current investments have the value or realization in the ordinary course of business at least equal to the amount at which they are stated.

4. Sales Tax collections not included in the Sales for the year ended 31.03.2015 is Rs.18,56,895/- (previous year Rs.24,84,441/-).

5. Building, Plant & Machinery had been revalued as on 30th September 2002 and land had been revalued as on 30th September 2003 ( by approved valuers, since their original costs no longer gave a true and fair view of their then values) and surplus (arisen on revaluation of Building, Plant & Machinery) amounting to Rs.15,56,26,170/- and Rs.6,88,20,020/- respectively were credited to Revaluation Reserve Account. Future salary increase considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Defined Contribution Schemes

Provident Fund 25,11,303 23,83,671 38,35,020

6. Segmental Reporting (AS-17):

The Company has only Single Reportable Business Segment, i.e. "Yarn Segment" in terms of requirements of AS-17.

7. Lease (AS-19)

The Lease Agreement provides for an option to the company to renew the lease period for a further period varying from 1 to 2 years at the end of the period provided atleast three months' prior notice is given:

Future Minimum lease rent to be received:

b) The Company has provided for Deferred Tax Asset on account of depreciation that arose on account of assets whose lives have become NIL as per Schedule-II of the Companies Act, 2013 to the extent of Rs.95,88,778/-. However, the Company has not considered Deferred Tax Asset in respect of others as there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Consequent to the enactment of the Companies Act, 2013 and its applicability for accounting periods commencing from 1st April 2014, the Company has reassessed the remaining useful life of fixed assets in accordance with the provisions prescribed under Schedule-II to the Companies Act 2013. In case of assets which have completed their useful life, the carrying value (net of residual life) as at 1st April 2014 was Rs.3,06,23,007/- out of which Rs.2,10,34,229/- was transferred to retained earnings after considering Rs.95,88,778/- under Deferred Tax. In case of other assets, the carrying value (net of residual value) is being depreciated over the revised remaining useful life. The depreciation and amortization expenses charge for the year would have been higher by Rs.1,56,654/- had the company continued with the previous useful life of assets.

8. Capital Reserve relates to revaluation of land made during 2013 in Partnership Firm in which Company is a Partner. The revaluation of land is done on the basis of valuation certified by Certified Valuer. Corresponding effect is accounted under receivable from Partnership Firm.

9. Previous year figures have been re grouped and reclassified wherever necessary to correspond with current year's classification/disclosure.


Mar 31, 2014

AS-1 CONTINGENT LIABILITY

a) A provision is recognized when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reasonable estimate can be made. Provisions are not discounted to the present value and are determined based on Management estimate. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b) Contingent liabilities are disclosed by way of notes to financial statements. Provision is made if it becomes probable that an out flow of future economic benefits will be required for an item previously dealt with as a contingent liability.

c) Contingent liability under various fiscal laws includes those in respect of which the Company/Department is in appeal.

OTHERS

(i) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted Accounting Pri nciples requires Management to make estimates and assumptions that affects 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.

(ii) CENVAT

a) The Value of CENVAT benefit is being reduced from the value of purchase of materials. Consumption of materials is arrived at accordingly.

b) The value of CENVAT benefit eligible in respect of capital item is reduced from the cost and depreciation is claimed accordingly.

(iii) SUNDRY DEBTORS AND ADVANCES

Doubtful advances are disclosed by way of notes.

NOTE:

The C ompany has only one class of equity shares having a par value of Rs.10 per share. Each Shareholder 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 immediatley preceding previsous years.

Details of Security :

i) Secured by equitable mortgage of 4.135 acres of vacant land situated at Coimbatore with all its present and future superstructure

ii) Hire Purchase Loans are secured by hypothecation of respective assets

Aggregage amount of loans guaranteed by Chairman & Managing Director towards term loans:

3. Customs department filed an appeal before Madras High Court against the orders of Settlement Commission under Advance License S cheme in respect of reduction of Interest of Rs.8.26 lakhs allowed to us.

4. There is a demand of Rs.3,19,712/- raised by Andhra Pradesh Electricity Department in respect of Fuel Surcharge adjustment (FSA). The same is disputed by the Company before Hon ble High Court and pending orders no provision is made in the accounts.

5. a) Income Tax assessments from Assessment year 2012-13 and onwards are pending.

b) Sales Tax Asses sments pending:

a) Under TNGST:1999-00 to 2000-01 & 2004-05 to 31.12.06

b) Under TNVAT:01.01.07 to 31.03.14

c) Under CST (TN):1999-00 to 2013-14

d) Under KGST:2005-06

e) Under CST (Kerala):2005-06

f) Under APVAT:2011-12 to 2013-14

g) Under CST (AP):2011-12 to 2013-14

2. Balance of Sundry Debtors and Sundry Creditors are subject to confirmation, reconciliation and consequent adjustments thereof.

3. In the opinion of Directors, assets other than fixed assets and non-current investments have the value or realization in the ordinary course of business at least equal to the amount at which they are stated.

4.Sales Tax collections not included in the Sales for the year ended 31.03.2014 is Rs.24,84,441/-(previous year Rs.65,61,597/-).

5. Disclosure required under the Micro, Small and Medium Enterprises D evelopment Act, 2006 (the Act) are given as follows:

6. Building, Plant & Machin ery had been revalued as on 30th September 2002 and land had been revalued as on 30th September 2003 ( by approved valuers, since their original costs no longer gave a true and fair view of their then values) and surplus (arisen on revaluation of Building, Plant & Machinery) amounting to Rs.15,56,26,170/- and Rs.6,88,20,020/- respectively were credited to Revaluation Reserve Account.

7. Particulars regarding investment in the capital of M/s.Dove Real Estates:

b) The company has not provided for deferred tax asset as on 01.04.2001.

c) The company has also not provided for deferred tax asset for the current year on account of prudence as there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

8. Capital Reserve relates to revaluation of land in Partnership Firm in which Company is a Partner. Th e revaluation of land is done on the basis of valuation certified by Certified Valuer. Corresponding effect is accounted under receivable from Partnership Firm.

9. Previous year figures have been re grouped and reclassified wherever necessary to correspond with current year''s classification/disclosure.


Mar 31, 2013

AS-1 ACCOUNTING FOR TAXES ON INCOME

Deferred tax resulting from timing differences between book and tax profits is accounted under liability method as enacted or substantially enacted rate as on the date of balance sheet. Deferred tax asset, other than those arising on account of unabsorbed depreciation or carry forward of losses under tax laws are recognised and carried forward subject to consideration of prudence only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

Deferred tax asset, arising on account of unabsorbed depreciation or carry forward of loss under tax laws are recognised and carried forward subject to consideration of prudence only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

AS-2 INTANGIBLE ASSETS

Software is being amortized over a period of 4 years

AS-3 IMPAIRMENT OF ASSETS

An asset is impaired when the carrying amount of the asset exceeds its recoverable amount. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting year is reversed if there has been a change in the estimate of the recoverable amount.

AS-4 CONTINGENT LIABILITY

a) A provision is recognized when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reasonable estimate can be made. Provisions are not discounted to the present value and are determined based on Management estimate. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b) Contingent liabilities are disclosed by way of notes to financial statements. Provision is made if it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability.

c) Contingent liability under various fiscal laws includes those in respect of which the Company/Department is in appeal.

OTHERS

(i) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted Accounting Principles requires Management to make estimates and assumptions that affects 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.

(ii) CENVAT

a) The Value of CENVAT benefit is being reduced from the value of purchase of materials. Consumption of materials is arrived at accordingly.

b) The value of CENVAT benefit eligible in respect of capital item is reduced from the cost and depreciation is claimed accordingly.

1. Customs department filed an appeal before Madras High Court against the orders of Settlement Commission under Advance Licence Scheme in respect of reduction of Interest of Rs.8.26 lakhs allowed to us.

2. There is a demand of Rs. 3,19.712/- raised by Andhra Pradesh Electricity Department in respect of Fuel Surcharge adjustment (FSA). The same is disputed by the Company before Hon''ble High Court and pending order no provision is made in the accounts.

3. a) Income Tax assessments from Assessment year 2010-11 and onwards are pending. b) Sales Tax Assessments pending''.

a) Under TNGST : 1999-00 to 2000-01 & 2004-05 to 31.12.06

b) Under TNVAT : 01.01.07 to 31.03.12

c) Under CST(TN) : 1999-00 to 2011-12

d) Under KGST : 2005-06

e) Under CST (Kerala) : 2005-06

f) Under APVAT : 2009-10 & 2011-12

g) Under CST (AP) : 2009-10 & 2011-12

4. Balance of Sundry Debtors and Sundry Creditors are subject to confirmation, reconciliation and consequent adjustments thereof.

5. In the opinion of Directors, assets other than fixed assets and non-current investments have the value or realization in the ordinary course of business at least equal to the amount at which they are stated.

6. Sales Tax collections not included in the Sales for the year ended 31.03.2013 is Rs.65,61,597/- (previous year Rs.59,78,344/-)

7. Disclosure required under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) are given as follows:

8. Building, Plant & Machinery had been revalued as on 30th September 2002 and land had been revalued as on 30th September 2003 ( by approved valuers, since their original costs no longer gave a true and fair view of their then values) and surplus (arisen on revaluation of Building, Plant & Machinery) amounting to Rs. 15,56,26,170/- and Rs.6,88,20,020/- respectively were credited to Revaluation Reserve Account.

9. Segmental Reporting (AS-17):

The Company has only Single Reportable Business Seqmant, i.e. "Yarn Segment" in terms of requirements of AS-17.

10. Exceptional item in Statement of Profit and Loss represents surplus arising on conversion of land, being capital asset, to stock in trade during the year. The value of converted land is taken at the value as certified by certified valuer.

11. Capital Reserve relates to revaluation of land in Partnership Firm in which Company is a Partner. The revaluation of land is done on the basis of valuation certified by Certified Valuer. Corresponding effect is accounted under receivable from Partnership Firm.

12. Previous year figures have been re grouped and reclassified wherever necessary to correspond with current year''s classification/disclosure.


Mar 31, 2012

(i) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted Accounting Principles requires Management to make estimates and assumptions that affects 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.

(ii) CENVAT

a) The Value of CENVAT benefit is being reduced from the value of purchase of materials. Consumption of materials is arrived at accordingly.

b) The value of CENVAT benefit eligible in respect of capital item is reduced from the cost and depreciation is claimed accordingly.

(iii) SUNDRY DEBTORS AND ADVANCES

Doubtful advances are disclosed by way of notes.

1. ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

2. Customs department filed an appeal before Madras High Court against the orders of Settlement Commission under Advance Licence Scheme in respect of reduction of Interest of Rs. 8.26 lakhs allowed to us.

3. a) Income Tax assessments are completed upto and including Assessment year 2009-10.

b) Sales Tax Assessments pending:

a) Under TNGST : 1999-00 to 2000-01 & 2004-05 to 31.12.06

b) Under TNVAT : 01.01.07 to 31.03.11

c) Under CST(TN) : 1999-00 to 2010-11

d) Under KGST : 2005-06

e) Under CST (Kerala) : 2005-06

f) Under APVAT : 2009-10 & 2010-11

g) Under CST (AP) : 2009-10 & 2010-11

4. Balance of Sundry Debtors and Sundry Creditors are subject to confirmation, reconciliation and consequent adjustments thereof.

5. In the opinion of Directors, assets other than fixed assets and non-current investments have the value or realization in the ordinary course of business at least equal to the amount at which they are stated.

6. Sales Tax collections not included in the Sales for the year ended 31.03.2012 is Rs. 59,78,344/- (previous year Rs. l,11,62,019/-)

7. Building, Plant & Machinery had been revalued as on 30th September 2002 and land had been revalued as on 30th September 2003 (by approved valuers, since their original costs no longer gave a true and fair view of their then values) and surplus (arisen on revaluation of Building. Plant & Machinery) amounting to Rs. 15,56,26,170/- and Rs. 6,88,20,020/- respectively were credited to Revaluation Reserve Account.

8. Segmental Reporting (AS-17):

The Company has only Single Reportable Business Segment, i.e. "Yarn Segment" in terms of requirements of AS-17.

9. i. Related party disclosure (AS-18)

(As identified by the Management)

Associates Key Management Relatives Personnel of Key Management Personnel

Sri Jaganatha Ginning. & Oil Mills (JGOM) Sri R. Doraiswami

Sri Jaganatha Textiles Ltd (SJTL) Sri D. Lakshminarayanaswamy Smt. R. Suhasini

Suhasini Spinners Ltd. (SSL) Smt. L. Nagaswarna Smt. L. Swathy

Swathy Processors Ltd. (SPL)

Sri Ramakrishna Yarn Carriers Ltd. (SRYC)

Dove Real Estates

10. The revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped and reclassified where ever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2011

Year ended Year ended 31.03.2011 31.03.2010 Rs. Rs.

1. Contingent Liabilities not provided for in accounts:

a) Bills discounted with Banks pending realisation:-

[i] Export Bills Nil Nil

[ii] Domestic Bills Nil 43,89,905

b) Following Sales Tax assessments are contested before Madras High Court and stayed:-

Asst. Year Nature of Dispute Disputed Demand (Rs. in Lakhs)

31.03.2011 31.03.2010

1995-96 TNGST Demand 54.59 54.59

1998-99 TNGST Demand 61.66 61.66

(Rs.31/- lacs since paid as per Madras High Court Interim Order.)

1999-00 TNGST Pre-assessment Demand 89.37 89.37

2000-01 TNGST, Additional Sales Tax 121.97 121.97

1.4.2004 to 31.12.2006 TNGST Additional Sales Tax 7.43 7.43

c) Customs department filed an appeal before Madras High Court against the orders of Settlement Commission under Advance Licence Scheme in respect of reduction of Interest of Rs.8.26 lakhs allowed to us.

2. Balance of Sundry Debtors and Sundry Creditors are subject to confirmation, reconciliation and consequent adjustments thereof.

3. In the opinion of Directors, current assets, loans and advances have the value at which they are stated in the Balance Sheet, if realised in the ordinary course of business.

4. Sales Tax collections not included in the Sales for the year ended 31.03.2011 is Rs.l,11,62,019/- (Previous year Rs. 95,35,049/-)

5. Disclosure required under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) are given as follows:

a) Principal amount due Nil Nil Interest due on the above Nil Nil

b) Interest paid during the period beyond the appointed day Nil Nil

c) Amount of interest due and payable for the period of delay in making payment without adding the interest specified under the Act Nil Nil

d) Amount of interest accrued and remaining unpaid at the end of the period Nil Nil

e) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under Section 23 of the Act Nil Nil

The above information and that given in Schedule 13 "Current Liabilities" regarding micro enterprises and small enterprises has been determined on the basis of information available with the Company. This has been relied upon by the Auditors.

6. Building, Plant & Machinery had been revalued as on 30th September 2002 and land had been revalued as on 30th September 2003 ( by approved valuers, since their original costs no longer gave a true and fair view of their then values) and surplus (arisen on revaluation of Building, Plant & Machinery) amounting to Rs. 15,56,26,170/- and Rs.6,88,20,020/- respectively were credited to Revaluation Reserve Account.

7. Segmental Reporting (AS-17):

The Company has only Single Reportable Business Segment, i.e. "Yarn Segment" in terms of requirements of AS-17.

8. Related party disclosure (AS-18) (As identified by the Management)

i. Related party Relationships :

Associates Key Management Personnel Relatives of Key Management Personnel

Sri Jaganatha Ginning.& Oil Mills (JGOM) Sri R Doraiswami Smt D Ranganayaki

Sri Jaganatha Textiles Ltd (SJTL) Sri D Lakshminarayanaswamy Smt R Suhasini

Suhasini Spinners Ltd (SSL) Smt L Nagaswarna Smt L Swathy

Swathy Processors Ltd (SPL)

Sri Ramakrishna Yarn Carriers Ltd (SRYC)

Dove Real Estates

9. a) The company has not provided for Deferred tax asset as on 01.04.2001

b) The company has also not provided for Deferred tax asset on account of prudence for the current year as there is no virtual certainty that sufficient future taxable income will be available against which such Deferred Tax Asset can be realized.

10. The figures have been rounded off to the nearest rupee and previous years figures have been re-grouped and re-classified wherever necessary.


Mar 31, 2010

OTHERS

i) USE OF ATES

The pre of financial statements in conformity with l ted Accounting Principles requires Management to make e mptions that affects the repo a ounts of assets and liabilities and the dis o ngent liabilities as at the date of the financial statements a unt of revenues and expense the reporting period. Actual results could o e estimates. Any revision to the estimates is recognized

(ii) CENVA

a) The CENVAT benefit is being reduced from e urchase of materials. Consumption of materials is a gly.

b) The CENVAT benefit eligible in respect of c e educed from the cost and depreciation is claimed accordi

2. Contingent Liabilities not provided for in accounts:

a) Bills discounted with Banks pending realisation:-

[i] Export Bills Nil Nil [ii] Domestic Bills 43,80,905 Nil

B)Following Sales Tax assessments are contested before H rt and stayed:- Asst. Year Nature of Dispute Disputed Demand

(Rs. in Lakhs)

31.03.2010 31.03.2009

1995-96 TNGST Demand 54.59 54.59

1998-99 TNGST Demand 61.66 61.66

( Rs.31/- lacs since paid as per Madras High Court Order.)

1999-00 TNGST Pre-ass- essment Demand 89.37 89.37 2000-01 TNGST, Additi- onal Sales Tax 121.97 121.97

1.4.2004 to 31.12.2006 TNGST Additional Sales Tax 7.43 7.43

c) Customs department filed an appeal before Madras High Court against the orders of Settlement Commission under Advance Licence Scheme in respect of reduction of Interest of Rs.8.26 lakhs allowed to us.

3. Balance of Sundry Debtors and Sundry Creditors are subject to confirmation, reconciliation and consequent adjustments thereof.

4. In the opinion of Directors, current assets, loans and advances have the value at which they are stated in the Balance Sheet, if realised in the ordinary course of business.

5. Building, Plant & Machinery had been revalued as on 30th September 2002 and land had been revalued as on 30th September 2003 ( by approved valuers, since their original costs no longer gave a true and fair view of their then values) and surplus (arisen on revaluation of Building, Plant & Machinery) amounting to Rs.15,56,26,170/- and Rs.6,88,20,020/- respectively were credited to Revaluation Reserve Account.

6. Segmental Reporting (AS-17):

The Company has only Single Reportable Business Segment, i.e. "Yarn Segment" in terms of requirements of AS-17.

7. a) The company has not provided for Deferred tax asset as on 01.04.2001

b) The company has also not provided for Deferred tax asset on account of prudence for the current year as there is no virtual certainty that sufficient future taxable income will be available against which such Deferred Tax Asset can be realized.

8. The figures have been rounded off to the nearest rupee and previous years figures have been re-grouped and re-classified wherever necessary.

 
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