Sri Nandaa Spinners Ltd. कंपली की लेखा नीति

Mar 31, 2010

1. ACCOUNTING POLICIES:

a) The accounts are prepared on accrual basis under the historical cost of convention in accordance with Generally Acceptable Accounting Principles in India on going concern basis comprising the mandatory accounting standards issued by the Institute of Chartered Accountants of India and the provision referred to section 211 (3C) of the Companies Act, 1956.

Gratuity:

b) Provision has been made for payment of gratuity but the said amount has not been invested in any funds.

2. FIXED ASSETS:

Fixed assets are stated at cost of Acquisition less accumulated depreciation. Since the net value of the machinery is becoming nil on provision of depreciation but the plant and machinery is still in use in the concern, no depreciation is provided on the same and around 5% of the Gross Block of Machinery is shown as net block.

3. SECURED LOANS:

i) Term Loan:

The entire assets of the Company including its factory land and building, Plant and Machineries both present and future being secured on a first charge basis. Further the said credit facilities are also secured additionally by way of offering their personal guarantees of directors except that of independent directors.

ii) Working Capital Loan:

Secured by first charge on all Raw-materials, Work-in-process, Finished Goods, Consumables and all other current assets present and future and all Book Debts and second charge on all fixed assets of the company, present and future and further the said credit facilities are also secured additionally by way of offering their personal guarantees of directors except that of independent directors.

4. UNSECURED LOANS: -

The Unsecured Loans were received from directors / shareholders of the company which are repayable on demand do not carry any interest.

5. INVENTORIES:

The Inventories are stated, valued and certified by the Management. The Inventories are valued at cost or market price whichever is lower in accordance with the method of accounting standards prescribed by the Institute of Chartered Accountants of India.

6. INSTALLED CAPACITY, PRODUCTION, SALES, CLOSING STOCK, RAW MATERIAL CONSUMPTION:

7. Payments to suppliers in the Small Scale Sector as identified by the company are generally made in accordance with agreed credit terms and there are no overdue on this account as on 31st March, 2010.

8. DETAILS OF RELATED PARTY TRANSACTIONS FOR THE PERIOD 1.04.2009 to 31.03.2010

As required by the Accounting Standard - AS 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are as follows:

a. Where Control exists:

i. Key Management personnel

a) V, Jegannathan

b) V.Devaraj

c) K.Venkitasamy

d) K.Narayanaswamy

e) R. Radhakrishnan

f) R. Karthik

g) SP Muthuraman

ii. Enterprise in which Key Management personnel have direct influence

a) White Gold Textiles P Ltd

b) Suparnaa Cotton Ltd (Formally known as: R.G. Fabrics Limited).

During the year, the company has purchased used plant and machinery from White gold Textiles (p) Ltd. The purchases were made only at prevailing market price.

9. TAXES ON INCOME:

No provision for taxation has been made in the absence of any liability. In view of the continued losses and considering the trend, and in the absence of Virtual certainty of future profits deferred taxes as per AS 22- Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, has not been provided for.

10. INTERIM FINANCIAL REPORTING:

The quarterly financial results are not published in accordance with the requirement of listing agreements with Stock Exchanges. However the management is ensuring all possible standards of compliance in the ensuing periods.

11. CONTINGENT LIABILITIES:

The following are the pending disputes and liabilities are also of Contingent in nature: