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Dawn Mills Company
BSE: 502817|ISIN: INE179E01016|SECTOR: Textiles - Spinning - Cotton Blended
Dawn Mills Company is not traded in the last 30 days
Dawn Mills Company is not listed on NSE
| Notes to Accounts | Year End : Jun '06 |
ANNUAL REPORT 2005-2006
NOTES ON ACCOUNTS
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS:
1. SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of Accounting:
The financial statements of the Company are prepared in accordance with the
requirement of the Companies Act, 1956, including the mandatory Accounting
Standards issued by the Institute of Chartered Accounts of India, under the
going concern concept and on the accrual system of accounting.
(b) Inflation:
Assets (other than certain Fixed Assets revalued in an earlier year) are
recorded at historical cost to the Company. These costs are not adjusted to
reflect the change in value of purchasing power of money.
(c) Fixed Assets:
Fixed Assets (other than revalued free-hold land, buildings and plant &
machinery) are carried at cost inclusive of inward freight, duties, taxes
and installation expenses and reduced by Cenvat credit availed and
accumulated depreciation. The Company has revalued its Fixed Assets
consisting of freehold land, buildings and plant & machinery as on 30th
June, 1985.
(d) Investments:
Long Term Investments are carried at cost less provisions, if any, for
permanent diminution in value of such investments.
(e) Inventories:
(i) Raw Materials. Stores & Spare parts: At lower of cost/net realisable
value.
(ii) Stock in process: At cost.
(iii) Finished goods:
At lower of cost/net realisable value.
'Cost' comprises all costs of purchases, cost of conversion and other cost
incurred in bringing the inventory to their present location and condition.
Cost formulae used is either specific identification' or the weighted
average cost' as applicable.
(f) Depreciation on fixed assets:
(i) Subject to para (ii) below, depreciation on fixed assets is provided at
the rates and in the manner specified in Schedule XIV to the Companies Act,
1956.
(ii) In respect of Plant and Machinery, the depreciation is provided on
straight line method as under:
Rate of Depreciation
Plant & Machinery installed
on or after 02.04.1987 but before 15.12.1993 11.31%
Other Plant & Machinery 10.34%
(iii) In respect of items other than Plant & Machinery, the depreciation is
provided on written down value method.
(iv) No depreciation is charged on freehold land.
(v) Depreciation on revalued buildings has been provided on written down
value method at the rates as stated in Para (i) above. However, the
difference between the depreciation on the revalued book value and on the
original cost is withdrawn from Revaluation Reserve and credited to Profit
& Loss Account.
(g) Sundry Debtors and Receivables:
Irrecoverable amounts, if any, that may arise due to unadjusted and
unsettled claims in respect of various items like rebates, discounts, short
receipts, defective supplies, etc. are accounted and/or provided only upon
final settlement of account with the parties as per the management's
judgment of the potential outcome.
(h) Borrowing Cost:
Borrowing cost directly attributable to the acquisition or construction of
fixed assets are capitalised as part of the assets upto the date the assets
is put to use. Other borrowing costs are charged to the Profit and Loss
account in the year in which the same is incurred.
(i) Government grants:
The grant receivable is accounted for, where it is reasonably certain that
the ultimate collection will be made.
Interest subsidy receivable from Bank of Baroda on Term Loan sanctioned to
the Company under Textile Upgradation Fund (TUF) is credited to interest on
Term Loan Account.
(j) Taxation:
Current Income Tax is determined on the basis of tax payable on taxable
income (if any) for the year. In compliance with Accounting Standard -22
issued by the Institute of Chartered Accountants of India, deferred tax is
calculated at current statutory Income Tax rate and is recognised on timing
difference between taxable income and accounting income that originated in
one period and are capable of reversal in one or more subsequent periods.
Deferred Tax Assets, subject to consideration of prudence, are recognised
and carried forward only to the extent that there is virtual certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realised.
(k) VRS Payments:
Payments made under Voluntary Retirement Scheme (VRS) are amortised over a
period of Ten years in respect of Current Accounting Period. For the year
2004-05 payments were considered as expenditure of that year. In respect of
payments made in the year(s) prior to Financial Year 2003-04, the Company
amortises such payments over a period of five years.
(l) Retirement Benefits:
(i) Gratuity liability is actuarially determined and provided for.
(ii) Contributions to defined contribution schemes such as Provident Fund
and Family Pension Fund are charged to the Profit and Loss Account as
incurred.
(iii) Liability on account of encashment of leave entitlement of employees
is actuarially determined and provided for.
(m) Cenvat Credits:
Credit available in respect of Excise Duty paid on raw materials, stores,
etc. (CENVAT CREDIT) is reduced from the cost of materials.
(n) Foreign Currency Transactions:
Transactions in foreign currency are recorded at the exchange rates
prevailing at the time of the transaction/realisation, as the case may be.
(o) Sales:
Sales are net of Excise Duty, Sales Tax, Returns & Claims.
(p) Claims, Demands and Contingencies
Disputed and/or contingent liabilities are either provided for or disclosed
depending on management's judgement of the potential outcome.
(q) Provisions and Contingent Liabilities:
The Company recognises a provision when there is a present obligation as a
result of a past event that probably requires an outflow of resources and a
reliable estimate can be made of the amount of the obligation. A disclosure
for a contingent liability is made when there is a possible obligation or a
present obligation that may, but probably will not, require an outflow of
resources.
Where there is a possible obligation or present obligation that the
likelihood of outflow of resources is remote, no provision or disclosure is
made.
NOTES ON ACCOUNTS:
Current Year Previous Year
Rupees Rupees
2. Contingent Liabilities not
provided in respect of:
(a) Claims not acknowledged as debts 3,00,366 3,00,366
(b) Bonds in favour of Central
Excise Authorities 5,00,000 5,00,000
(c) Show Cause Notices for Excise
Duty claims contested by the 2,12,920 2,31,053
Company
3. Estimated amount of contracts
remaining to be executed on Nil Nil
capital account and not provided
for (net of advances)
4. The Company's Income-tax assessments have been finalised upto the
Assessment Year 2003-04. In the opinion of the management, provision made
in the books is sufficient to cover the liabilities in respect of pending
assessments.
5. The Company's Sales tax Assessments have been completed upto accounting
year 2003-2004. In the opinion of the management, whatever payments have
been made by the Company on this account cover the liability in respect of
the pending assessments.
6. During the Period, the Company announced a VRS at its plant at Lower
Parel. The same was well received and the manufacturing operations were
discontinued from 25th August, 2005. Alltime Mercantile Company Private
Limited, Newzone Mercantile Company Private Limited, Superplaza Mercantile
Company Private Limited and Seastar Trading Company Private Limited
(together called 'acquirers', who belong to the Ashok Piramal Group)
acquired 131509 shares from the erstwhile promoters (aggregating to 52.6%
of the-capital) and made an open offer and acquired another 20% from the
other existing shareholders. The Board was thereafter reconstituted on 13th
March, 2006.
The new management intends to develop the property into a modern commercial
complex soon and are in the process of taking necessary approvals thereof.
The Company is actively exploring options to liquidate its textile
machineries rendered surplus as a result of the changing operational
scenario and is confident of realising more than the book values and hence
the same are reflected at book values. Based on above developments, the
management construes that it is a going concern.
7. The Board has at its meeting held on 5th May, 2006, considered and
approved the Scheme of Amalgamation of the Company with Peninsula Land
Limited (PLL) u/s.391 to 394 of the Companies Act, 1956. As per the Scheme,
shareholders of the Company are entitled to receive twenty equity shares of
PLL of Rs.10/- each for every one equity share of Rs.50/- each held in the
Company. The Scheme of Amalgamation is subject to the consent/approval of
shareholders, creditors, stock exchanges, Hon'ble Bombay High Court and
other statutory authorities which by law may be necessary.
8.(a) The Company had investments in Special Paints Ltd. (Of 12012 Equity
shares of Rs.25/- each amounting to Rs.1,50,150/-) in which one of the
Directors was interested. The said investments have been disposed of at
Re.1/- each during the year and loss of Rs.1,38,138/- is accounted for
under the head 'Loss on sale of shares'.
(b) During the year, Company's investment in wholly owned subsidiary
Company Viz. Dawn Apparels Ltd. of 5000 shares of Rs.100/- each has been
disposed of @Re.1/- each and resultant loss of Rs.4,95,000/- has been
accounted under the head 'Loss on sale of shares'.
9. As per the records of the Company there are no amounts outstanding to
any of the suppliers of the Company to which the provisions of the Delayed
Payments of Small Scale and Ancillary Industrial Undertaking Act, 1993
apply.
10. The Company has discontinued its manufacturing operations from 26th
August, 2005. In view of above developments during the year, depreciation
on plant and machinery has been provided till the date of discontinuation.
During the period some of the machinery are already sold and the Company
does not expect any loss on sale / disposal of the remaining Plant &
Machinery.
11. Earnings per Share: 30.06.2006 31.03.2005
Face value per Share Rs. 50 Rs. 50
Profit (Loss) after tax and before Rs. (82,37,245) Rs.1,54,15,823
Prior period items
Profit (Loss) for the period
after taxation Rs. (3,85,26,122) Rs.76,27,777
Number of Shares used in
computing Earning per Share -
basic and diluted 2,50,000 2,50,000
Earning per Share - basic
and diluted
Before Prior Period Items Rs.(32.95) Rs.61.66
After Prior Period Items Rs.(154.10) Rs.30.51
12. Related Party Disclosure:
(a) List of Related Parties (as identified and certified by the
Management):
Parties where control exists:
- Dawn Apparels Limited - Wholly owned subsidiary (up to 31.10.2005)
- Special Paints Limited - In which one of the Directors is interested (up
to 13.03.2006 )
- Goldlife Mercantile Co. Pvt. Ltd. - In which two of the directors are
interested
(b) Other related parties with whom transactions have taken place during
the year:
Key Management Personnel:
Shri N.R. Ruia Managing Director of The Dawn Mills Co.Ltd.
(up to 24.11.2005)
Shri R.V.Ruia Executive Director of The Dawn Mills Co.Ltd.
(up to 13.03.2006)
(c) Transactions during the year with Related Parties / Key Management
Personnel are as under:
Sr. Name of the Description of Rupees Outstanding
No. Related Party Transaction balance as
on 30.06.06
1.(A) Subsidiary Sale of readymade 74,330 Nil
garments (20,17,365) (8,24,280)
Rent paid 1,40,000 -
(2,40,000)
Telephone 18,538 -
Charges (41,865)
Electricity 21,356 -
Charges (80,566)
Purchase of - -
readymade garments (43,491)
(B) Special Paints
Ltd. Secured Loans Nil Nil
(2,99,50,000) (Dr.)
2,90,00,000
Interest Receivable 566418 (Dr.)
5,66,413
(566413) (-)
(C) Goldlife
Mercantile Co.
Pvt. Ltd. Loan Received 18,00,00,000 (Cr.)
6,02,00,000
(-) (-)
Interest Paid 1,16,25,252 (Cr.)
1,11,92,660
(-) (-)
2. Key Management Remuneration 21,92,073 Nil
Personnel (16,70,943) (Cr.) (976)
Dividends 58,930 -
(59.830) (-)
Rent Received 1,00,289 -
(1,50,432) (-)
Sale of Flat 4,93,290 -
(-) (-)
(d) No amounts are written off or written back during the year in respect
of debts due from or to related parties.
13. Purchases and Sales of investments made during the period ended on 30th
June, 2006 In Units of Mutual Funds - Non-Trade - Quoted
Mutual Fund Type Purchase Sale
No.of Units Rupees No.of Rupees
Units
HDFC Prudential Div. - - 772022.881 2,04,13,066
Fund
HDFC Floating Rate Growth - - 869619.854 1,02,05,250
Income Fund - Short
Term Plan
Birla Floating Growth - - 638227.754 73,38,151
Rate Fund - Short
Term Plan
PFRPG Prudential Growth - - 587388.978 68,26,811
ICICI Floating
Rate Plan
GFRG Grindlays Growth - - 437779.024 50,92,114
Floating Rate
Fund Plan
DSP Merrill Lynch Div. 3224246.332 4,00,00,000 3258302.274 4,04,26,928
Liquidity Fund
DSP Merrill Lynch Div.
Liquidity Fund Re
IWU 34055.942 4,26,928
14. The Major components of Deferred Tax Assets (which are based on the tax
return filed, assessment orders)/Liabilities arising on account of timing
differences as at 30th June, 2006 considered for accounts are as under:
The components of net deferred tax assets/(liabilities) are as under:
30.06.2006 31.03.2005
Rupees Rupees
Deferred Tax Assets:
Compensation paid Under Voluntary
Retirement Scheme - 60,79,515
Provision for gratuity liability - 97,98,036
Bonus - 3,91,423
A - 1,62,68,974
Deferred Tax Liability:
Compensation paid Under
Voluntary 29,72,435
Retirement Scheme
Depreciation B 11,72,515 79,91,516
Net Deferred Tax
Assets (Liability) (A-B) (41,44,950) 82,77,458
30.06.2006 31.03.2005
Rupees Rupees
15. Miscellaneous expenses includes
payments to Auditors:
(a) Audit Fees 91,145 71,630
(b) In other capacities:
(i) For Tax Audit 33,672 33,060
(ii) For Certification 33,060 17,190
1,57,877 1,21,880
16. Directors' Emoluments:
a) To the Managing Director
(upto 24.11.2005):
(a) Salary 3,50,215 4,75,589
(b) House Rent Allowance 2,10,129 2,85,353
(c) Contribution to Provident Fund 49,608 57,071
(d) Leave Salary 2,12,000 -
(e) Gratuity 1,54,719 45,050
(f) Medical Expences 31,354 19,238
(g) Perquisites 35,021 49,654
10,43,146 9,31,955
b) To the Executive Director
(upto 13.3.2006):
(a) Salary 4,49,098 3,82,795
(b) House Rent Allowance 2,69,459 2,29,677
(c) Contribution to Provident Fund 53,892 45,935
(d) Leave Salary 1,37,600 -
(e) Gratuity 1,58,227 22,887
(f) Medical Expenses 35,841 19,414
(g) Perquisites 44,910 38,280
11,49,027 7,38,988
Aggregate remuneration 21,92,073 16,70,943
17. Additional information required pursuant to provisions of paragraphs 3,
4-C and 4-D of Part II of Schedule VI to the Companies Act, 1956 (As
certified by the Management):
A. Class of Opening Stock Packed Purchased from
Goods Production out-side
Manufactured UNIT Qty. Value Qty. Qty. Value
Rs. Rs.
1. Yarn KG. 88918 10834801 694987 - -
(90331) (7730973) (2189376) (-) (-)
2. Hosiery DOZ. 7539 1769702 33 534 148319
(8008) (1290048) (3829) (8074) (2518182)
3. Bra & DOZ. 3066 703777 - 79 20533
Panties (3790) (850067) (316) (4804) (2023182)
4. Knitted KG. 2394 122021 - 82 17051
Fabrics (4475) (238139) (-) (4832) (722016)
5. Waste KG. 8904 39025 23712 - -
(8173) (33464) (65123) (-) (-)
B. Class of
Goods
Traded:
Readymade Doz. 547 134606 - 1 -
Garments & (972) (385181) (-) (793) (375526)
other products
A. Class of Turnover Closing Stock
Goods (Net of Excise Duty)
Manufactured UNIT Qty. Value Qty. Value
Rs. Rs.
1. Yarn KG. *783051 117157325 854 24931
(2190789) (314882503) (88918) (10834801)
2. Hosiery DOZ. **5607 3930117 2499 263184
(12372) (7783986) (7539) (1769702)
3. Bra & DOZ. +946 678779 2199 253967
Panties (5844) (2712808) (3066) (703777)
4. Knitted KG. ++2476 116109 - -
Fabrics (6913) (50796) (2394) (122021)
5. Waste KG. 32616 320532 - -
(64392) (309118) (8904) (39025)
B. Class of
Goods
Traded:
Readymade Doz. +++272 237593 276 216550
Garments & (1218) (962300) (547) (134606)
other products
* Includes Nil (122409 Kgs.) processed on job work basis.
** After adjusting free samples 35 Doz.(53 Doz)
+ After adjusting free samples 11 Doz.(13 Doz.)
++ Includes ... Nil (5801 Kgs.) for job work.
+++ After adjusting free samples 3 Doz.(5 Doz.)
Quantity Value
Kg. Rupees
C. Consumption of Raw Materials:
(1) Cotton 9,433 3,92,716
(44,333) (21,87.019)
(2) Synthetic Fibre 6,25,909 4,61,97,248
(20,74,238) (15,41,80,379)
D. Consumption of: Percentage to
total Value Consumption Rupees
1. Raw Material:
Imported - -
(1.37) (24,33,262)
Indigenous 100 4,65,89,964
(98.63) (15,39,34,136)
2. Components & Spare Parts:
Imported - -
(0.10) (11,311)
Indigenous 100 24,20.782
(99.90) (1,18,18,550)
E. Licenced & Installed capacity at the period end:
Licenced capacity:
Spindles 56,040
(56,040)
Installed capacity:
Spindles 7,536
(45,928)
* Installed capacity as certified by the Management and accepted by the
Auditors without verification being technical matter.
F. Value of imports on CIF basis: Rupees
(i) Raw Materials Nil
(Nil)
(ii) Components and Spare Parts Nil
(Nil)
G. The information required to be furnished under para 4D(d) of Part II of
Schedule VI to the Companies Act, 1956 in respect of remittance on account
of dividends to non-resident shareholders.
No. of Non- Total No.of Year to Total net Whether in foreign
resident Shares held which Amount or in Indian
Shareholders dividends Paid Currency
relate
(9) Nine 335 2005 3650 Indian Currency
(7) (Seven) (96) (2004) (960) (Indian Currency)
Rupees
H. Earnings in Foreign Exchange Nil
(Nil)
I. Expenditure in Foreign Currency Rupees
Travelling 5,36,895
(Nil)
18. Figures in brackets are of previous year.
19. Previous year figures have been regrouped/rearranged wherever
necessary.
20. Current period being 15 months therefore Previous year's figures are
not comparable.
Urvi A. Piramal
Jaydev M. Mody
Rajeev A. Piramal
Chetan Nage Alpana Chinai
Company Secretary Kamal Tibrewala
Directors
Place : Mumbai
Date : 11th December, 2006
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| Source : Dion Global Solutions Limited | |
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