WRITE OFF NOTE

We had the following sale contracts with Nakoda Ginning and Pressing as mentioned below:
Contract number
no of
bales purchase date due date
extended
due date
Sale

px/candy mkt px/candy
SO/MH/2012-13/047 1000 28-Feb-13 31-Mar-13 30-Apr-13 38550 37000
SO/MH/2012-13/053 2500 9-Apr-13 30-Apr-13

40000 37000

We received the intial margin money from the buyer against SO/MH/2012-13/047 as follows:
date margin
9-Mar-13 1500000
13-Mar-13 2000000
14-Mar-13 77286
total 3577286

However, with the market prices moving lower than the contracted price, we asked the buyer to remit
us additional money against maintenance margin in SO/MH/2012-13/047. Additionally, the buyer was
required to pay 20% initial margin money against SO/MH/2012-13/053 contract. The buyer however,
failed to do remit the said amounts within the stipulated time frame as laid down in the contract.
We sent several reminders to the counterpart through the broker towards payment of margins but
the buyer failed to respond to them. Subsequently, we had no option but to invoice back the two
contracts at the prevailing market price. We proceeded to invoice back the buyer on 22
nd
April at the
market price of Rs. 37000/candy on that day.
The total amount receivable from the buyer was Rs. 4122673 against the settlement. Since we had
received Rs. 3577286/- only from the buyer, we raised debit notes for further payment of Rs.
5,45,387/-on the buyer.
The buyer however, did not honour the request and since the probability of getting the balance
payment is doubtful, we propose to write off the debit balance of Rs. 5,45,387/-


Mitesh Shah Y Prasad
(General Manager-Cotton) (Controller-Cotton)