Mar 31, 2018
NOTES TO SEPARATE FINANCIAL STATEMENTS
NOTE NO. 48
Disclosure of Fair value measurements
The fair values of financial assets and liabilities are determined at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to their short term maturities of these instruments.
Financial Instruments by category |
(Rs. in Lakhs) |
||||
Particulars |
Amortised Cost |
FVTPL |
FVTOCI |
Carrying Amount |
Fair Value |
As at 31-03-2018 |
|||||
Financial Assets |
|||||
Investments - Preference Shares |
2,500.00 |
- |
- |
2,500.00 |
2,500.00 |
Other Investments |
0.92 |
- |
1.61 |
2.53 |
2.53 |
Loans and Advances |
950.00 |
- |
- |
950.00 |
950.00 |
Trade Receivables |
5,046.24 |
- |
- |
5,046.24 |
5,046.24 |
Cash and Bank Balances |
190.76 |
- |
- |
190.76 |
190.76 |
Other Financial Assets |
1,575.83 |
- |
- |
1,575.83 |
1,575.83 |
Financial Liabilities |
|||||
Borrowings |
23,928.82 |
- |
- |
23,928.82 |
23,928.82 |
Trade Payables |
581.73 |
- |
- |
581.73 |
581.73 |
Other Financial Liabilities |
- |
- |
- |
- |
- |
As at 31-03-2017 |
|||||
Financial Assets |
|||||
Investments - Preference Shares |
2,500.00 |
- |
- |
2,500.00 |
2,500.00 |
Other Investments |
1.03 |
- |
0.60 |
1.63 |
1.63 |
Loans and Advances |
950.00 |
- |
- |
950.00 |
950.00 |
Trade Receivables |
4,337.29 |
- |
- |
4,337.29 |
4,337.29 |
Cash and Bank Balances |
310.79 |
- |
- |
310.79 |
310.79 |
Other Financial Assets |
1,651.30 |
- |
- |
1,651.30 |
1,651.30 |
Financial Liabilities |
|||||
Borrowings |
28,158.85 |
- |
- |
28,158.85 |
28,158.85 |
Trade Payables |
956.47 |
- |
- |
956.47 |
956.47 |
Other Financial Liabilities |
- |
- |
- |
- |
- |
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1 : Quoted (Unadjusted) prices in active markets for identical assets or liabilities
Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The details of financial instruments that are measured at fair value on recurring basis are given below:
(Rs. in Lakhs) |
||||
Particulars |
Level 1 |
Level 2 |
Level 3 |
Total |
Financial Instruments at FVTOCI |
||||
Investments in listed equity securities |
||||
As at 31-03-2018 |
1.61 |
- |
- |
1.61 |
As at 31-03-2017 |
0.60 |
- |
- |
0.60 |
Investment in unlisted securities |
||||
As at 31-03-2018 |
- |
- |
0.92 |
0.92 |
As at 31-03-2017 |
- |
- |
1.03 |
1.03 |
Financial Instruments at FVTPL |
||||
Foreign exchange forward contracts |
||||
As at 31-03-2018 (Asset) |
- |
29.33 |
- |
29.33 |
As at 31-03-2017 (Liability) |
- |
402.49 |
- |
402.49 |
Valuation techniques used to determine the fair value
The significant inputs used in the fair value measurement categorized within the fair value hierarchy are given below:
Nature of Financial Instrument |
Valuation Technique |
Remarks |
Investment in Listed securities |
Market Value |
Closing Price as at 31st March in Stock Exchange |
Investment in Unlisted securities |
At Book Value |
Insignificant Value |
Foreign exchange forward contracts |
Mark to Market |
Based on MTM valuations provided by the Banker |
Financial Guarantee Obligation |
Differential Interest Rate |
Interest rates quote have been obtained from the Banker |
NOTE NO. 49
Financial Risk Management
The Board of Directors (BOD) has overall responsibility for the establishment and oversight of the Company''s risk management framework and thus established a risk management policy to identify and analyse the risk faced by the Company. Risk Management systems are reviewed by the BOD periodically to reflect changes in market conditions and the Company''s activities. The Company through its training and management standards and procedures develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the risk management framework. The Audit committee is assisted in the oversight role by Internal Audit. Internal Audit undertakes reviews of the risk management controls and procedures, the results of which are reported to the Audit Committee.
The Company has the following financial risks:
Categories of Risk |
Nature of Risk |
Credit Risk |
Receivables |
Financial Instruments and Cash deposits |
|
Liquidity Risk |
Fund Management |
Market Risk |
Foreign Currency Risk |
Cash flow and fair value interest rate risk |
The Board of Directors regularly reviews these risks and approves the risk management policies, which covers the management of these risks:
Credit Risk
Credit Risk is the risk of financial loss to the Company if the customer or counterparty to the financial instruments fails to meet its contractual obligations and arises principally from the Company''s receivables, treasury operations and other operations that are in the nature of lease.
Receivables
The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer. The Company extends credit to its customers in the normal course of business by considering the factors such as financial reliability of customers. The Company evaluates the concentration of the risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. In case of Corporate / Export Customer, credit risks are mitigated by way of enforceable securities. However, unsecured credits are extended based on creditworthiness of the customers on case to case basis.
Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the company and where there is a probability of default, the company creates a provision based on Expected Credit Loss for trade receivables under simplified approach as below:
(Rs. in Lakhs) |
|||||
As at 31-03-2018 |
Due less than 45 days |
46 to 90 days |
91 to 180 days |
More than 180 days |
Total |
Gross carrying amount |
4,264.81 |
557.23 |
222.70 |
1.50 |
5,046.24 |
Expected Loss Rate |
0% |
0% |
0% |
0% |
0% |
Expected Credit Losses |
0% |
0% |
0% |
0% |
0% |
Carrying amount of trade receivables net of impairment |
4,264.81 |
557.23 |
222.70 |
1.50 |
5,046.24 |
As at 31-03-2017 |
Due less than 45 days |
46 to 90 days |
91 to 180 days |
More than 180 days |
Total |
Gross carrying amount |
3,297.14 |
601.46 |
321.27 |
117.42 |
4,337.29 |
Expected Loss Rate |
0% |
0% |
0% |
0% |
0% |
Expected Credit Losses |
0% |
0% |
0% |
0% |
0% |
Carrying amount of trade receivables net of impairment |
3,297.14 |
601.46 |
321.27 |
117.42 |
4,337.29 |
Financial Instruments and Cash deposits
Investments of surplus funds are made only with the approved counterparties. The Company is presently exposed to counter party risk relating to short term and medium term deposits placed with Banks. The Company places its cash equivalents based on the creditworthiness of the financial institutions.
Liquidity Risk
Liquidity Risks are those risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the company''s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available. The Company has laid well defined policies and procedures facilitated by robust information system for timely and qualitative decision making by the management including its day to day operations.
Financial arrangements
The Company has access to the following undrawn borrowing facilities:
(Rs. in Lakhs)
Particulars |
31-03-2018 |
31-03-2017 |
Expiring within one year |
||
Bank Overdraft and other facilities |
10,583.00 |
9,305.00 |
Term Loans |
960.00 |
699.49 |
Expiring beyond year |
||
Term Loans |
- |
- |
Maturities of Financial Liabilities
Nature of Financial Liability |
< 1 Year |
1 - 5 Years |
> 5 years |
Total |
As at 31-3-2018 |
||||
Borrowings from Banks |
19,049.27 |
4,879.55 |
- |
23,928.82 |
Trade payables |
581.73 |
- |
- |
581.73 |
Other Financial Liabilities (Including Interest) |
1,149.34 |
- |
- |
1,149.34 |
As at 31-3-2017 |
||||
Borrowings from Banks |
20,870.94 |
7,287.91 |
- |
28,158.85 |
Trade payables |
956.47 |
- |
- |
956.47 |
Other Financial Liabilities (Including Interest) |
1,650.24 |
- |
- |
1,650.24 |
Foreign Currency Risk
The Company''s exposure in USD and other foreign currency denominated transactions in connection with import of cotton, capital goods & spares, besides exports of finished goods and borrowings in foreign currency, gives rise to exchange rate fluctuation risk. The Company has following policies to mitigate this risk:
Decisions regarding borrowing in Foreign Currency and hedging thereof, (both interest and exchange rate risk) and the quantum of coverage is driven by the necessity to keep the cost comparable. Foreign Currency loans, imports and exports transactions are hedged by way of forward contract after taking into consideration the anticipated Foreign exchange inflows/outflows, timing of cash flows, tenure of the forward contract and prevailing Foreign exchange market conditions.
The Company''s exposure to foreign currency risk (un-hedged) as detailed below:
Currency |
Trade Payables |
Trade and other Receivables |
Balance with Banks |
Foreign Currency Loan |
USD in Millions |
||||
As at 31-03-2018 |
- |
- |
- |
2.60 |
As at 31-03-2017 |
- |
- |
- |
3.32 |
EURO in Millions |
||||
As at 31-03-2018 |
- |
- |
- |
0.20 |
As at 31-03-2017 |
- |
- |
- |
0.17 |
Risk sensitivity on foreign currency fluctuation |
(Rs. in Lakhs) |
|
Foreign Currency |
31-03-2018 |
31-03-2017 |
1% Increase |
1% increase |
|
USD |
(-) 16.94 |
(-) 21.63 |
EURO |
(-) 1-70 |
(-) 1-19 |
Cash flow and fair value interest rate risk
Interest rate risk arises from long term borrowings with variable rates which exposed the company to cash flow interest rate risk. The Company''s fixed rate borrowing are carried at amortized cost and therefore are not subject to interest rate risk as defined in Ind AS 107 since neither the carrying amount nor the future cash flows will fluctuate because of the change in market interest rates. The Company is exposed to the evolution of interest rates and credit markets for its future refinancing, which may result in a lower or higher cost of financing, which is mainly addressed through the management of the fixed/floating ratio of financial liabilities. The Company constantly monitors credit markets to strategize a well-balanced maturity profile in order to reduce both the risk of refinancing and large fluctuations of its financing cost. The Company believes that it can source funds for both short term and long term at a competitive rate considering its strong fundamentals on its financial position.
Interest rate risk exposure
Particulars |
31-03-2018 |
31-03-2017 |
Variable rate borrowings |
23,928.82 |
28,158.85 |
Fixed rate borrowings |
- |
- |
The Company does not have any interest rate swap contracts Sensitivity on Interest rate fluctuation
Incremental Interest Cost works out to |
31-3-2018 |
31-3-2017 |
1% Increase in Interest Rate |
239.29 |
281.59 |
NOTE NO. 50 Capital Management
For the purpose of the Company''s capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the Shareholders'' wealth.
The Company manages its capital structure and makes adjustments in the light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus debt.
(Rs. in Lakhs) |
|||
Particulars |
31-03-2018 |
31-03-2017 |
|
Long Term Borrowings |
4,879.55 |
7,287.91 |
|
Current maturities of Long Term borrowings |
4,049.83 |
4,734.19 |
|
Short Term Borrowings |
14,999.44 |
16,136.75 |
|
Less: Cash and Cash Equivalents |
115.65 |
209.28 |
|
Net Debt |
(A) |
23,813.17 |
27,949.57 |
Equity Share Capital |
737.62 |
737.62 |
|
Other Equity |
26,492.98 |
23,946.14 |
|
Total Equity |
(B) |
27,230.60 |
24,683.76 |
Total Capital Employed |
(C) = (A) (B) |
51,043.77 |
52,633.33 |
Capital Gearing Ratio |
(A) / (C) |
47% |
53% |
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans/borrowing. The Company has been consistently focusing on reduction in long term borrowings. There are no significant changes in the objectives, policies or processes for managing capital during the years ended 31-03-2018 and 31-03-2017.
As per our report annexed |
||
For N.A. JAYARAMAN & CO. |
For SRSV & ASSOCIATES |
Shri PR. VENKETRAMA RAJA |
Chartered Accountants |
Chartered Accountants |
Chairman |
Firm Registration No. 001310S |
Firm Registration No. 015041S |
Smt. R. SUDARSANAM |
Managing Director |
||
R. PALANIAPPAN |
P. SANTHANAM |
B. GNANAGURUSAMY |
Proprietor, Membership No. 205112 |
Partner, Membership No. 018697 |
Chief Financial Officer |
Rajapalaiyam, |
A. ARULPRANAVAM |
|
29th May, 2018. |
Secretary |
Mar 31, 2017
1. Corporate Information
Rajapalayam Mills Limited is a Public Limited Company domiciled and headquartered in India and incorporated under the provisions of Companies Act. The Registered office of the Company is located at Rajapalayam Mills Premises, P.A.C. Ramasamy Raja Salai, Rajapalayam - 626 117, Tamil Nadu, India. The Companyâs shares are listed in BSE Limited.
The Company is principally engaged in manufacture of Yarn. The Company is also engaged in generation of electricity from its windmills for its captive consumption.
The financial statements of the Company for the year ended 31-03-2017 were approved and adopted by Board of Directors of the Company in their meeting dated 25-05-2017.
2. Basis of preparation and presentation of financial statements
(i) The financial statements for the period upto 31-03-2016 were prepared in accordance with Accounting Standards notified under section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). Pursuant to the mandatory requirement for adoption of Indian Accounting Standards (Ind AS) as notified by Ministry of Corparate Affairs (MCA), the Company has prepared its financial statements for the year ended 31-03-2017 in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015 as amended from time to time. The comparative figures in the financial statements with respect to the previous year have been restated in accordance with Ind AS requirements. While preparing these financials statements, the Company has first prepared its opening Balance sheet as at 01-04-2015, the date of transition to Ind AS.
(ii) The significant accounting policies used in preparing the financial statements are set out in Note No.5.
(iii) An asset is classified as current when it is expected to be realised or intended to be sold or consumed in the normal operating cycle or held primarily for the purpose of trading or expected to be realised within 12 months after the reporting period or cash or cash equivalents unless restricted from being exchanged or used to settle a liability 12 months after the reporting period. All other assets are classified as non-current.
(iv) A liability is classified as current when it is expected to be settled in normal operating cycle or held primarily for the purpose of trading or due for settlement within 12 months after the reporting period or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
(v) The Company has considered its operating cycle to be 12 months for the purpose of Current or Non-current classification of assets and liabilities.
(vi) The financial statements are presented in Indian Rupees rounded to the nearest Lakhs with two decimals. The amount below the round off norm adopted by the Company is denoted as Rs.0.00 Lakhs.
3. First time adoption of Ind AS
The financial statements for the year ended 31-03-2017 are the first financial statements prepared in accordance with Ind AS. The Reconciliation and description of the effect of transition from previous GAAP to Ind AS on Equity, Statement of Profit and Loss are provided in Note Nos. 48. The Balance sheet as on the date of transition has been prepared in accordance with Ind AS 101 - First time adoption of Indian Accounting Standards (Ind AS). All applicable Ind AS were applied consistently and retrospectively in preparation of the first Ind AS Financial Statements with certain mandatory exceptions and voluntary exemptions for the specific cases as provided under Ind AS 101.
Estimates
The estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP unless there is objective evidence that those estimates were in error. The Company has not made any changes to estimates made in accordance with previous GAAP.
a) The mandatory exceptions for retrospective application as provided under Ind AS 101 that are applicable to the Company are as below:
4. Basis of Measurement
The financial statements have been prepared on accrual basis under historical cost convention except for certain financial instruments (Refer Note 5.S - Accounting Policy for Financial Instruments) which are measured at fair value.
Capital Reserve
Represents the difference between the shares alloted to the Shareholders of Transferor Company and Net Worth acquired from Transferor Company as per scheme of Amalgamation.
Securities Premium Reserve
Represents excess of share subscription money reserved over par value of shares.
FVTOCI Reserve
Fair Value through Other Comprehensive Income Reserve represents the balance in equity for items to be accounted in Other Comprehensive Income (OCI). The Company has opted to recognise the changes in the fair value of certain investments in equity instruments and remeasurement of defined benefit obligations in OCI. The Company transfers amounts from this reserve to Retained Earnings in case of actuarial loss / gain and in case of fair value recognition of equity instrument, the same will be transferred when the respective equity instruments are derecognised.
General reserve
The general reserve is used from time to time to transfer profits from retained profits. There is no policy of regular transfer.
Retained earnings
Represents that portion of the net income of the Company that has been retained by the Company.
Terms and conditions of the above Financial Liabilities:
Trade payables are non-interest bearing and are normally settled on 10 to 30 days.
There are no dues to micro and small enterprises as at 31-03-2017 (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.
NOTE NO. 5
CONTINGENT LIABILITIES
i. Income Tax Assessment have been completed upto the Accounting Year ended 31st March, 2014 i.e. AY 2014-15.
ii. Sales Tax Assessment has been completed upto the Accounting year 2006-07. The Assessment was also completed for the Accounting year 2014-15.
iii. In respect of Service Tax matters, appeals are pending with Appellate Authorities for a demand amount of Rs. 193.75 Lakhs (PY: Rs. 182.97 Lakhs) towards manpower recruitment or supply agency services, of which we have already deposited Rs. 11.21 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 this matter.
iv. 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. 429.48 Lakhs (PY: Rs. 477.08 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 this matter.
NOTE NO. 6
As per Ind AS 19, the disclosures pertaining to âEmployee Benefitsâ are given below:
NOTE NO. 7
RELATED PARTY TRANSACTIONS
Information on names of Related parties and nature of Relationship as required by Ind AS 24 on Related party disclosures for the year ended 31st March, 2017:
NOTE NO. 8
Disclosure of Fair value measurements
The fair values of financial assets and liabilities are determined at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value of cash and short-term deposits, trade and other short-term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to their short term maturities of these instruments.
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 : Quoted (Unadjusted) prices in active markets for identical assets or liabilities.
Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The details of financial instruments that are measured at fair value on recurring basis are given below:
NOTE NO. 9
Financial Risk Management
The Board of Directors (BOD) has overall responsibility for the establishment and oversight of the Companyâs risk management framework and thus established a risk management policy to identify and analyse the risk faced by the Company. Risk Management systems are reviewed by the BOD periodically to reflect changes in market conditions and the Companyâs activities. The Company through its training and management standards and procedures develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with the Companyâs risk management policies and procedures, and reviews the risk management framework. The Audit committee is assisted in the oversight role by Internal Audit. Internal Audit undertakes reviews of the risk management controls and procedures, the results of which are reported to the Audit Committee.
The Board of Directors regularly reviews these risks and approves the risk management policies, which covers the management of these risks:
Credit Risk
Credit Risk is the risk of financial loss to the Company if the customer or counterparty to the financial instruments fails to meet its contractual obligations and arises principally from the Companyâs receivables, treasury operations and other operations that are in the nature of lease.
Receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristic of each customer. The Company extends credit to its customers in the normal course of business by considering the factors such as financial reliability of customers. The Company evaluates the concentration of the risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. In case of Corporate / Export Customer, credit risks are mitigated by way of enforceable securities. However, unsecured credits are extended based on creditworthiness of the customers on case to case basis.
Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the company and where there is a probability of default, the company creates a provision based on Expected Credit Loss for trade receivables under simplified approach as below:
Financial Instruments and Cash deposits
Investments of surplus funds are made only with the approved counterparties. The Company is presently exposed to counter party risk relating to short term and medium term deposits placed with Banks. The Company places its cash equivalents based on the creditworthiness of the financial institutions.
Liquidity Risk
Liquidity Risks are those risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the companyâs operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available. The Company has laid well defined policies and procedures facilitated by robust information system for timely and qualitative decision making by the management including its day to day operations.
Foreign Currency Risk
The Companyâs exposure in USD and other foreign currency denominated transactions in connection with import of cotton, capital goods & spares, besides exports of finished goods and borrowings in foreign currency, gives rise to exchange rate fluctuation risk. The Company has following policies to mitigate this risk:
Decisions regarding borrowing in Foreign Currency and hedging thereof, (both interest and exchange rate risk) and the quantum of coverage is driven by the necessity to keep the cost comparable. Foreign Currency loans, imports and exports transactions are hedged by way of forward contract after taking into consideration the anticipated Foreign exchange inflows/ outflows, timing of cash flows, tenure of the forward contract and prevailing Foreign exchange market conditions.
Cash flow and fair value interest rate risk
Interest rate risk arises from long term borrowings with variable rates which exposed the Company to cash flow interest rate risk. The Companyâs fixed rate borrowing are carried at amortized cost and therefore are not subject to interest rate risk as defined in Ind AS 107 since neither the carrying amount nor the future cash flows will fluctuate because of the change in market interest rates. The Company is exposed to the evolution of interest rates and credit markets for its future refinancing, which may result in a lower or higher cost of financing, which is mainly addressed through the management of the fixed/floating ratio of financial liabilities. The Company constantly monitors credit markets to strategize a well-balanced maturity profile in order to reduce both the risk of refinancing and large fluctuations of its financing cost. The Company believes that it can source funds for both short term and long term at a competitive rate considering its strong fundamentals on its financial position.
NOTE NO. 10 Capital Management
For the purpose of the Companyâs capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximize the Shareholdersâ wealth.
The Company manages its capital structure and makes adjustments in the light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus debt.
In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans / borrowing. The Company has been consistently focusing on reduction in long term borrowings. There are no significant changes in the objectives, policies or processes for managing capital during the years ended 31-03-2017 and 31-03-2016.
NOTE NO. 11
Disclosures as Required by Ind AS 101 First Time Adoption of Indian Accounting Standards
Notes
In preparing these financial statements, the Companyâs Opening Balance Sheet was prepared as at 01-04-2015, which is the Companyâs date of transition to Ind AS. The following note explains the nature of adjustments made by the Company read with Note No. 3 in restating its previous GAAP Financial Statements including its Balance Sheet as at 01-04-2015 and the financial statements as at and for the year ended 31-03-2016. The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this disclosure.
A. Depreciation and Amortization Expense
Under previous GAAP, the carrying value of significant components of Property, Plant and Equipment which have completed their useful life, have been charged off against opening balance of General Reserves for the financial year 2015-16 as permitted by Schedule II to the Companies Act, 2013. However, under Ind AS, this has been taken through profit and loss for the year ended 31-03-2016 as it not a GAAP difference.
B. Investment Properties
Under previous GAAP as well as Ind AS, Investment Properties are required to be stated at cost net of accumulated depreciation and impairment loss, if any. Under previous GAAP, it was grouped under non-current investments whereas under Ind AS, the same is required to be disclosed as a separate line item in the Balance Sheet. Accordingly, investment properties are reclassified.
C. Investments
Under previous GAAP, long term equity instruments were measured at cost less provision for permanent diminution. Under Ind AS, in respect of investments in companies other than Associates, the Company is required to designate such investments necessarily at fair value. Therefore, the Company has designated such investments as FVTOCI Investments. At the date of transition to Ind AS, the excess /deficit of fair value of equity instruments over the previous GAAP carrying amount is recognised as fair value gain/loss, in the Other Comprehensive Income and transferred to FVTOCI Reserve, net of tax for the year ended 31-03-2016.
D. Financial Guarantee Contracts
The Company has issued Financial Guarantee to Banks for the loans availed by Associates and other related parties. Where guarantees in relation to loans are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment if the loan is given to Assoicates, and recognized as Other expenses if the loan is given to other related parties. The carrying amount of financial guarantee obligation is recognized as other income over the tenure of the corporate guarantee.
E. Recognition & Measurement of Loans & Advances at Amortized Cost
Loans and advances comprise of loans given to employees at concessional interest rates and the said loans are recovered in agreed installments. Under previous GAAP, this has been measured at Transaction value. However, under Ind AS, when the said loans and advances carry interest below the market rate is required to be measured at fair value on initial recognition. The fair value is determined at the present value of EMI, discounted using the market interest rates for similar instruments. The difference between historical value and fair value of such loans and advances are classified under prepaid expenses.
Subsequent to initial recognition, the loans and advances are measured at amortized cost using the effective interest rate method with the carrying amount increased over the period upto the recovery of the loans and advances. The amount of increase in the carrying amount of loans and advances is recognized as âInterest Incomeâ and prepaid expenses are amortized over the tenure of loans and advances as âEmployee costâ or âOther Expensesâ, as it may be appropriate.
F. Presentation of MAT Credit Entitlement as âDeferred Tax Assetsâ
Under previous GAAP, MAT credit entitlement was presented under the head âLoans and advancesâ since there being a convincing evidence of realization of the asset. As per Ind AS 12 on Income Taxes, Deferred Tax Assets include the amounts of income taxes recoverable in future periods in respect of the carry forward of unused tax credits. Accordingly, MAT Credit Entitlement classified as Loans and Advances under previous GAAP, are netted off against Deferred Tax Liability under Ind AS.
G. Dividend
Under previous GAAP, dividends proposed by the Board of Directors are recognized as proposed dividend in the financial statements even though it is approved by the Shareholders in the AGM only after the Balance Sheet date. However, under Ind AS, dividend has to be recognized upon approval by the Shareholders in the Annual General Meeting. Accordingly, Proposed Dividend (including Dividend Distribution Tax recognized as liability in the financial year 2014-15 as per previous GAAP has been reversed with corresponding credit to Equity as at the date of transition i.e. 01-04-2015 and recognized in the Equity during the year ended 31-03-2016 as declared and paid.
H. Transaction cost on Borrowings
Under previous GAAP, transaction costs (loan processing fees) incurred in connection with borrowings is charged to profit or loss upfront. Under Ind AS, transaction cost is to be included in the initial recognition and charged to profit or loss using the effective interest method. Accordingly, transaction cost on borrowings is reversed to Equity, for the loans outstanding as at 01-04-2015 and additional interest expense is recognized in the Opening Equity for the period upto 01-04-2015, using Effective Interest Rate method (EIR). For the year ended 31-03-2016, the Company has reversed the transaction cost pertaining to the Borrowings availed during the year 2015-16 and the additional Interest impact computed using EIR method is recognized as Finance cost.
I. Recognition and Measurement of Forward Contracts on Mark To Market (MTM)
Under previous GAAP, in respect of forward contracts, the difference between the forward rate and the exchange rate at the inception of the forward exchange contract is recognized as income/expenses over the tenure of such contract. Under Ind AS, the fair value of forward foreign exchange contracts has to be recognized. Accordingly, the assets and liabilities related to forward contracts recognized under previous GAAP are reversed and Mark to Market (MTM) gain / loss is recognized as other expenses in the Statement of Profit and Loss.
J. Deferred Tax
Deferred tax is accounted using income statement approach by computing the differences between taxable profits and accounting profits for the period under previous GAAP. As per Ind AS 12, the deferred tax is to be computed using the balance sheet approach, which is based on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Deferred tax adjustments are recognized either in retained earnings or a separate component of equity.
K. Defined Benefit Plan
Under previous GAAP, actuarial gains and losses are charged to profit or loss. Under Ind AS re-measurements of net defined benefit asset/liability comprising of actuarial gains or losses are arising from experience adjustments and changes in actuarial assumption are charged/credited to other comprehensive income. There is no impact on the total equity as at 31-03-2016. However for the period upto the date of transition, the Company has transferred all re-measurement costs recognized in the past periods within accumulated profits or loss (a component of equity), in accordance with provisions of Para 122 of Ind AS 19.
L. Other Comprehensive Income (OCI)
This is a new classification under Ind AS. Any income or expense that are not required to be recognized in profit or loss are shown under a new category namely OCI in the Statement of Profit and Loss. Expenes of such items are re-measurements of defined benefit plans, gains and losses from investments in equity instruments designated at fair value through other comprehensive income, gains and losses on financial assets measured at fair value through other comprehensive income, gain or loss on financial instruments that qualify for hedge accounting, changes in revaluation surplus and gains and losses arising from translating the financial statements of a foreign operation.
NOTE NO. 12
Details of Specified Bank Notes (âSBNâ) held and transacted during the period 08-11-2016 to 30-12-2016
As per the amendments notified on 30-03-2017 to Ind AS Schedule III, Clause K of Note 6 to General Instructions for Preparation of Balance Sheet, the details of Specified Bank Notes (âSBNâ) held and transacted during the period 08-11-2016 to 30-12-2016 is given in the below table:
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 CompanyÃs 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.
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