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Accounting Policies of Rajshree Sugars & Chemicals Ltd. Company
Mar 31, 2025
Company overview
RAJSHREE SUGARS & CHEMICALS LIMITED (''the Company'') is a public limited company incorporated in India. The company''s equity shares are listed on BSE and NSE. The registered office is located at âThe Uffiziâ, 338/8, Avanashi Road, Peelamedu, Coimbatore - 641 004, Tamilnadu, India.
1. Material accounting policies1.1 Statement of compliance
The financial statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act.
1.2 Basis of preparation and presentation
The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.
The principal accounting policies are set out below:
All assets and liabilities have been classified as current or non-current according to the Company''s operating cycle and other criteria set out in the Act. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
The Board of Directors have considered the financial position of the Company at 31 March 2025 and projected cash fiows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.
1.4 Use of estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods affected. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statement.
The company derives revenue primarily from the sale of Sugar, Alcohol and Power.
Revenue from contract with customers is recognized when the Company satisfies performance obligation by transferring promised goods and services to the customer. Performance obligations are satisfied at the point of time when the customer obtains controls of the asset.
Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable, stated net of discounts, returns and Goods and Services Tax. Transaction price is recognized based on the price specified in the contract, net of the estimated sales incentives/ discounts. Accumulated experience is used to estimate and provide for the discounts/ right of return, using the expected value method.
Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
1.6 Foreign currencies1.6.1. Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates (''the functional currency''). The financial statements are presented in Indian rupee, which is the company''s functional and presentation currency.
1.6.2. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year-end exchange rates are generally recognized in profit or loss.
1.7 Employee Benefits1.7.1. Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
1.7.2. Other long term employee benefit
The liabilities for earned leave that are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are measured as the present value of the expected future payments to be made in respect of services provided by employee up to the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur. Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
1.7.3. Post-employment obligation
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees and
b) Defined contribution plans such as provident fund.
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance sheet. The Company has funded this with Life Insurance Corporation of India (''LIC'') and HDFC Standard Life Insurance Company. The contributions made are treated as plan assets. The defined benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets.
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The income tax expenses or credit is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted.
Deferred tax is provided in full, using the balance sheet approach, on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets refiects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
1.8.3 Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the income taxes are also recognized in other comprehensive income or directly in equity respectively.
1.9. Property, plant and equipment1) Adoption of Revaluation Model:
The management adopted revaluation model for its land, and determined that these constitute separate class of assets under Ind AS 113, based on the nature, characteristics and risks of the asset.
Fair value of the land is determined by using the market approach. As at the date of revaluation, Value is restated based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.
Valuations are performed with sufficient frequency to ensure that the carrying amount of a revalued asset does not differ materially from its fair value.
A revaluation surplus is recorded in Other Comprehensive Income and credited to the asset revaluation surplus in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognized in profit or loss, the increase is recognized in profit and loss. A revaluation deficit is recognized in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset''s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred directly to retained earnings.
Property, plant and equipment, other than land measured through revaluation model, are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss during the reporting period in which they are incurred.
Depreciation on Property, Plant and Equipment (other than freehold land) has been provided on the straightline method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
The estimated useful life of the tangible assets are reviewed at the end of the each financial year and the depreciation period is revised to reflect the changed pattern, if any.
An item of Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from continued use of asset. Any gain or loss on disposal or retirement of an item of property, plant or equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the group, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from disposal. Any gain or loss on disposal or retirement of property is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
Depreciation on investment property has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
1.11. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash fiows are discounted to their present value using a pre-tax discount rate that refiects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash fiows have not been adjusted.
Inventories are valued at the lower of cost and net realizable value.
The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and appropriate proportion of variable and fixed overhead expenditure. Overhead expenditures are being allocated on the basis of normal operating capacity. Raw materials are valued at first in first out. Cost of inventories also includes all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Non-production inventory (other than those supplied along with main plant and machinery, which are capitalized and depreciated accordingly) are charged to profit or loss on consumption.
1.13 Provisions and contingencies
Provisions: Provisions are recognized when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outfiow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash fiows at a pre-tax rate that refiects current market assessment of the time value of money and the risks specific to the liability.
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outfiow of resources will be required to settle or a reliable estimate of the amount cannot be made.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
1.15.1. Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
⢠those measured at amortized cost
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash fiows.
A financial asset that meets the following two conditions is measured at amortized cost unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the objective of the Company''s business model is to hold the financial asset to collect the contractual cash fiows.
⢠Cash fiow characteristic test : the contractual term of the financial asset give rise on specified dates to cash fiows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash fiows and selling financial assets.
⢠Cash fiow characteristic test : the contractual term of the financial asset give rise on specified dates to cash fiows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash fiows and selling financial assets.
⢠Cash fiow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash fiows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
1.15.2. Financial assets at fair value through profit or loss (FVTPL)
Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortized cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortized cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognizing the gains or losses on them on different bases.
Investments in debt based mutual funds are measured at fair value through profit and loss.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re measurement recognized in profit or loss.
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment.
1.15.4. Cash and cash equivalents
Cash flows are reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
In the cash fiow statement, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits held at call with financial institutions, short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash fiow statement.
1.15.5. Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model to the following:
⢠financial assets measured at amortized cost
⢠financial assets measured at fair value through other comprehensive income
Expected credit loss are measured through a loss allowance at an amount equal to:
⢠the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
⢠full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Interest Income: Interest income from debt instruments is recognized using the effective interest rate method.
i) Initial Recognition:
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, debt instruments and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables.
All financial liabilities are subsequently measured at amortized cost using the effective interest rate method.
Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortized cost at the end of the subsequent accounting period.
Amortized cost is calculated by taking into account any discount or premium on issue of funds, and transaction costs that are an integral part of the Effective Interest Rate("EIR").
Any fees, paid or received, transaction costs and other premiums or discounts that are included in the calculation of the effective interest rate are amortized over the expected life of the financial instrument.
The carrying amount of financial liabilities that are subsequently measured at amortized cost are
determined based on the effective interest rate method. Interest expense that is not capitalized as part of costs of an asset is included in the "Finance costs" in Statement of Profit and Loss.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender :
a. on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.
b. with no substantially different terms, or the terms of an existing liability are not substantially modified, such an exchange or modification is treated as modification of original liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss or amortized as expenses over the period of time.
For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in profit or loss. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit or loss.
The Optionally Convertible Debentures ("OCD") and Non-Convertible Debentures ("NCD") issued by the Company are Financial Liability because the issuer has an obligation to transfer financial assets to the holder of the debt securities.
The OCDs and NCDs are issued as a part of exchange of existing loan under restructuring agreement. The terms are substantially modified on such exchange i.e. 10% test is passed and the principle of "Extinguishment accounting" are applied.
The old loan is de-recognized and the debt securities issued are recognized at fair value. The difference between the carrying value and the fair value of debt securities is charged to the profit or loss account.
The company has incurred expenses with respect to loan syndication fees and Commitment fees, which relate to restructuring when it was unlikely that the restructuring arrangement will be entered into, are charged to profit and loss account.
The debt securities are subsequently measured at amortized cost using the effective interest rate method. The value of redemption is reduced from carrying value of the debt securities.
As per the restructuring plan sanctioned, the borrowings are exchanged with the existing borrower for substantially modified terms. The 10% test is passed and the principle of "Extinguishment accounting" are applied.
The old loan or borrowings are de-recognized and the new loan or borrowings are recognized at fair value. The difference between the carrying value and the fair value of new loan or borrowings is charged to the profit or loss account.
The company has incurred expenses with respect to loan syndication fees and Commitment fees, which relate to restructuring when it was unlikely that the restructuring arrangement will be entered into, are charged to profit and loss account. The loans and borrowings are subsequently measured at amortized cost using the effective interest rate method.
1.16.3. Trade and other payables:
Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The Company as a lessee:
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (shortterm leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a
corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Effective April 1,2019, the Company has adopted Ind AS 116 ''Leases'' and applied the standard to it''s existing lease contracts using the modified retrospective approach under which the ROU Asset is measured based on the remaining lease payments.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognized in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
Basic earnings per share have been computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share has been computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive.
In view of the stressed financial position, the Directors have not recommended payment of dividend for the year 2024-25.
Mar 31, 2024
Company overview
RAJSHREE SUGARS & CHEMICALS LIMITED (''the Company'') is a public limited company incorporated in India. The company''s equity shares are listed on BSE and NSE. The registered office is located at ''The Uffizi'', 338/8, Avanashi Road, Peelamedu, Coimbatore 641 004.
1. Material accounting policies
1.1 Statement of compliance
The financial statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act.
1.2 Basis of preparation and presentation
The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.
The principal accounting policies are set out below:
All assets and liabilities have been classified as current or non-current according to the Company''s operating cycle and other criteria set out in the Act. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
1.3 Going concern
The Board of Directors have considered the financial position of the Company at 31st March 2024 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.
1.4 Use of estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods affected. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statement.
1.5 Revenue recognition
The company derives revenue primarily from the sale of Sugar, Alcohol and Power.
Revenue from contract with customers is recognized when the Company satisfies performance obligation by transferring promised goods and services to the customer. Performance obligations are satisfied at the point of time when the customer obtains controls of the asset.
Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable, stated net of discounts, returns and Goods and Services Tax. Transaction price is recognized based on the price specified in the contract, net of the estimated sales incentives/ discounts. Accumulated experience is used to estimate and provide for the discounts/ right of return, using the expected value method.
Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
1.6 Foreign currencies
1.6.1. Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates (''the functional currency''). The financial statements are presented in Indian rupee, which is the company''s functional and presentation currency.
1.6.2. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year-end exchange rates are generally recognized in profit or loss.
1.7 Employee Benefits
1.7.1. Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
1.7.2. Other long term employee benefit
The liabilities for earned leave that are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are measured as the present value of the expected future payments to be made in respect of services provided by employee up to the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur. Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
1.7.3. Post-employment obligation
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees and
b) Defined contribution plans such as provident fund.
Defined contribution plan:
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Defined benefit plan:
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance sheet. The Company has funded this with Life Insurance Corporation of India (''LIC'') and HDFC Standard Life Insurance Company. The contributions made are treated as plan assets. The defined benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets.
1.7.4. Bonus plans
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
1.8 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
1.8.1 Current tax
The income tax expenses or credit is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted.
1.8.2 Deferred tax
Deferred tax is provided in full, using the balance sheet approach, on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
1.8.3 Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the income taxes are also recognized in other comprehensive income or directly in equity respectively.
1.9. Property, plant and equipment
1) Adoption of Revaluation Model:
The management adopted revaluation model for its land, and determined that these constitute separate class of assets under Ind AS 113, based on the nature, characteristics and risks of the asset.
Fair value of the land is determined by using the market approach. As at the date of revaluation, Value is restated based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.
Valuations are performed with sufficient frequency to ensure that the carrying amount of a revalued asset does not differ materially from its fair value.
A revaluation surplus is recorded in Other Comprehensive Income and credited to the asset revaluation surplus in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognized in profit or loss, the increase is recognized in profit and loss. A revaluation deficit is recognized in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset''s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred directly to retained earnings.
2) Cost Model
Property, plant and equipment, other than land measured through revaluation model, are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss during the reporting period in which they are incurred.
Depreciation on Property, Plant and Equipment (other than freehold land) has been provided on the straightline method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
The estimated useful life of the tangible assets are reviewed at the end of the each financial year and the depreciation period is revised to reflect the changed pattern, if any.
An item of Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from continued use of asset. Any gain or loss on disposal or retirement of an item of property, plant or equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
1.9.1. Investment Property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the group, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from disposal. Any gain or loss on disposal or retirement of property is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
Depreciation on investment property has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
1.10. Intangible assets
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
1.11. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
1.12. Inventories
Inventories are valued at the lower of cost and net realizable value.
The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and appropriate proportion of variable and fixed overhead expenditure. Overhead expenditures are being allocated on the basis of normal operating capacity. Raw materials are valued at first in first out. Cost of inventories also includes all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Non-production inventory (other than those supplied along with main plant and machinery, which are capitalized and depreciated accordingly) are charged to profit or loss on consumption.
1.13 Provisions and contingencies
Provisions: Provisions are recognized when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
1.14 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
1.15 Financial assets
All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
1.15.1. Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
⢠those measured at amortized cost
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
A financial asset that meets the following two conditions is measured at amortized cost unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the objective of the Company''s business model is to hold the financial asset to collect the contractual cash flows.
⢠Cash flow characteristic test : the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets.
⢠Cash flow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
1.15.2. Financial assets at fair value through profit or loss (FVTPL)
Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortized cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortized cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognizing the gains or losses on them on different bases.
Investments in debt based mutual funds are measured at fair value through profit and loss.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognized in profit or loss.
1.15.3. Trade receivables
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment.
1.15.4. Cash and cash equivalents
Cash flows are reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
In the cash fiow statement, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits held at call with financial institutions, short-term highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash fiow statement.
1.15.5. Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model to the following:
⢠financial assets measured at amortized cost
⢠financial assets measured at fair value through other comprehensive income
Expected credit loss are measured through a loss allowance at an amount equal to:
⢠the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
⢠full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
1.15.6. Income recognition
Interest Income: Interest income from debt instruments is recognized using the effective interest rate method.
1.16 Financial liabilities
i) Initial Recognition:
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, debt instruments and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables.
ii) Subsequent measurement:
All financial liabilities are subsequently measured at amortized cost using the effective interest rate method.
Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortized cost at the end of the subsequent accounting period.
Amortized cost is calculated by taking into account any discount or premium on issue of funds, and transaction costs that are an integral part of the Effective Interest Rate("EIR").
Any fees, paid or received, transaction costs and other premiums or discounts that are included in the calculation of the effective interest rate are amortized over the expected life of the financial instrument.
The carrying amount of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest rate method. Interest expense that is not capitalized as part of costs of an asset is included in the "Finance costs" in Statement of Profit and Loss.
iii) De-recognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender :
a. on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.
b. with no substantially different terms, or the terms of an existing liability are not substantially modified, such an exchange or modification is treated as modification of original liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss or amortized as expenses over the period of time.
For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in profit or loss. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit or loss
1.16.1. Debt Securities:
The Optionally Convertible Debentures ("OCD") and Non-Convertible Debentures ("NCD") issued by the Company are Financial Liability because the issuer has an obligation to transfer financial assets to the holder of the debt securities.
The OCDs and NCDs are issued as a part of exchange of existing loan under restructuring agreement. The terms are substantially modified on such exchange i.e. 10% test is passed and the principle of "extinguishment accounting" are applied.
The old loan is de-recognized and the debt securities issued are recognized at fair value. The difference between the carrying value and the fair value of debt securities is charged to the profit or loss account.
The company has incurred expenses with respect to loan syndication fees and Commitment fees, which relate to restructuring when it was unlikely that the restructuring arrangement will be entered into, are charged to profit and loss account.
The debt securities are subsequently measured at amortized cost using the effective interest rate method. The value of redemption is reduced from carrying value of the debt securities.
1.16.2. Borrowings:
As per the restructuring plan sanctioned, the borrowings are exchanged with the existing borrower for substantially modified terms. The 10% test is passed and the principle of "extinguishment accounting" are applied.
The old loan or borrowings are de-recognized and the new loan or borrowings are recognized at fair value. The difference between the carrying value and the fair value of new loan or borrowings is charged to the profit or loss account.
The company has incurred expenses with respect to loan syndication fees and Commitment fees, which relate to restructuring when it was unlikely that the restructuring arrangement will be entered into, are charged to profit and loss account. The loans and borrowings are subsequently measured at amortized cost using the effective interest rate method.
1.16.3. Trade and other payables:
Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
1.17. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
1.18. Leases
The Company as a lessee:
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (shortterm leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Effective April 1,2019, the Company has adopted Ind AS 116 ''Leases'' and applied the standard to it''s existing lease contracts using the modified retrospective approach under which the ROU Asset is measured based on the remaining lease payments.
1.19 Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
1.20. Government grants
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognized in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
1.21. Earnings per Share
Basic earnings per share have been computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share has been computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive.
1.22. Dividends
In view of the stressed financial position, the Directors have not recommended payment of dividend for the year 2023-24.
Mar 31, 2023
Company overview
RAJSHREE SUGARS & CHEMICALS LIMITED (''the Company'') is a public limited company incorporated in India. The company''s equity shares are listed on BSE and NSE. The registered office is located at The Uffizi, 338/8, Avanashi Road, Coimbatore -641 004, Tamilnadu, India.
1. Significant accounting policies1.1 Statement of compliance
The financial statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act.
1.2 Basis of preparation and presentation
The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.
The principal accounting policies are set out below:
All assets and liabilities have been classified as current or non-current according to the Company''s operating cycle and other criteria set out in the Act. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
The Board of Directors have considered the financial position of the Company at 31 March 2023 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.
1.4 Use of estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods affected. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statement.
The company derives revenue primarily from the sale of Sugar, Alcohol and power.
Revenue from contract with customers is recognized when the Company satisfies performance obligation by transferring promised goods and services to the customer. Performance obligations are satisfied at the point of time when the customer obtains controls of the asset.
Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable, stated net of discounts, returns and Goods and Service Tax. Transaction price is recognized based on the price specified in the contract, net of the estimated sales incentives/ discounts. Accumulated experience is used to estimate and provide for the discounts/ right of return, using the expected value method.
Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
1.6 Foreign currencies1.6.1. Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates (''the functional currency''). The financial statements are presented in Indian rupee, which is the company''s functional and presentation currency.
1.6.2. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year-end exchange rates are generally recognized in profit or loss.
1.7 Employee Benefits1.7.1. Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet
1.7.2. Other long term employee benefit
The liabilities for earned leave that are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are measured as the present value of the expected future payments to be made in respect of services provided by employee up to the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur. Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
1.7.3. Post-employment obligation
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees and
b) Defined contribution plans such as provident fund.
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance sheet. The Company has funded this with Life Insurance Corporation of India (''LIC'') and HDFC Standard Life Insurance Company. The contributions made are treated as plan assets. The defined benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets.
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The income tax expenses or credit is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted.
Deferred tax is provided in full, using the balance sheet approach, on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
1.8.3 Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the income taxes are also recognized in other comprehensive income or directly in equity respectively.
1.9. Property, plant and equipment1) Adoption of Revaluation Model:
The management adopted revaluation model for its land, and determined that these constitute separate class of assets under Ind AS 113, based on the nature, characteristics and risks of the asset.
Fair value of the land is determined by using the market approach. As at the date of revaluation, Value is restated based on the valuation by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.
Valuations are performed with sufficient frequency to ensure that the carrying amount of a revalued asset does not differ materially from its fair value.
A revaluation surplus is recorded in Other Comprehensive Income and credited to the asset revaluation surplus in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognized in profit or loss, the increase is recognized in profit and loss. A revaluation deficit is recognized in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset''s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred directly to retained earnings.
Property, plant and equipment, other than land measured through revaluation model, are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss during the reporting period in which they are incurred.
Depreciation on Property, Plant and Equipment (other than freehold land) has been provided on the straightline method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
The estimated useful life of the tangible assets are reviewed at the end of the each financial year and the depreciation period is revised to reflect the changed pattern, if any.
An item of Property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from continued use of asset. Any gain or loss on disposal or retirement of an item of property, plant or equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the group, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from disposal. Any gain or loss on disposal or retirement of property is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
Depreciation on investment property has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
1.11. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
Inventories are valued at the lower of cost and net realizable value.
The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and appropriate proportion of variable and fixed overhead expenditure. Overhead expenditures are being allocated on the basis of normal operating capacity. Raw materials are valued at first in first out. Cost of inventories also includes all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Non-production inventory (other than those supplied along with main plant and machinery, which are capitalized and depreciated accordingly) are charged to profit or loss on consumption.
1.13 Provisions and contingencies
Provisions: Provisions are recognized when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability.
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
1.15.1. Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
⢠those measured at amortized cost
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
A financial asset that meets the following two conditions is measured at amortized cost unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the objective of the Company''s business model is to hold the financial asset to collect the contractual cash flows.
⢠Cash flow characteristic test : the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
⢠Business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets.
⢠Cash flow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
1.15.2. Financial assets at fair value through profit or loss (FVTPL)
Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortized cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortized cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognizing the gains or losses on them on different bases.
Investments in debt based mutual funds are measured at fair value through profit and loss.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re measurement recognized in profit or loss.
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost less provision for impairment.
1.15.4. Cash and cash equivalents
Cash flows are reported using the indirect method, whereby profit for the year is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
In the cash flow statement, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits held at call with financial institutions, short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement.
1.15.5. Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model to the following:
⢠financial assets measured at amortized cost
⢠financial assets measured at fair value through other comprehensive income
Expected credit loss are measured through a loss allowance at an amount equal to:
⢠the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
⢠full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Interest Income: Interest income from debt instruments is recognized using the effective interest rate method.
i) Initial Recognition:
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, debt instruments and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables
All financial liabilities are subsequently measured at amortized cost using the effective interest rate method.
Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortized cost at the end of the subsequent accounting period.
Amortized cost is calculated by taking into account any discount or premium on issue of funds, and transaction costs that are an integral part of the Effective Interest Rate(âEIRâ).
Any fees, paid or received, transaction costs and other premiums or discounts that are included in the calculation of the effective interest rate are amortized over the expected life of the financial instrument.
The carrying amount of financial liabilities that are subsequently measured at amortized cost are determined based on the effective interest rate method. Interest expense that is not capitalized as part of costs of an asset is included in the âFinance costsâ in Statement of Profit and Loss.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender :
a. on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.
b. with no substantially different terms, or the terms of an existing liability are not substantially modified, such an exchange or modification is treated as modification of original liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss or amortized as expenses over the period of time.
For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in profit or loss. The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognized in profit or loss.
The Optionally Convertible Debentures (âOCDâ) and Non-Convertible Debentures (âNCDâ) issued by the Company are Financial Liability because the issuer has an obligation to transfer financial assets to the holder of the debt securities.
The OCDs and NCDs are issued as a part of exchange of existing loan under restructuring agreement. The terms are substantially modified on such exchange i.e. 10% test is passed and the principle of âextinguishment accountingâ are applied.
The old loan is de-recognized and the debt securities issued are recognized at fair value. The difference between the carrying value and the fair value of debt securities is charged to the profit or loss account.
The company has incurred expenses with respect to loan syndication fees and Commitment fees, which relate to restructuring when it was unlikely that the restructuring arrangement will be entered into, are charged to profit and loss account.
The debt securities are subsequently measured at amortized cost using the effective interest rate method. The value of redemption is reduced from carrying value of the debt securities.
As per the restructuring plan sanctioned, the borrowings are exchanged with the existing borrower for substantially modified terms. The 10% test is passed and the principle of âextinguishment accountingâ are applied.
The old loan or borrowings are de-recognized and the new loan or borrowings are recognized at fair value. The difference between the carrying value and the fair value of new loan or borrowings is charged to the profit or loss account.
The company has incurred expenses with respect to loan syndication fees and Commitment fees, which relate to restructuring when it was unlikely that the restructuring arrangement will be entered into, are charged to profit and loss account. The loans and borrowings are subsequently measured at amortized cost using the effective interest rate method.
1.16.3. Trade and other payables
Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The Company as a lessee
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (shortterm leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Effective April 1,2019, the Company has adopted Ind AS 116 ''Leases'' and applied the standard to it''s existing lease contracts using the modified retrospective approach under which the ROU Asset is measured based on the remaining lease payments.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognized in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
Basic earnings per share have been computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share has been computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive.
In view of the stressed financial position, the Directors have not recommended payment of dividend for the year2022-23.
Mar 31, 2018
1. Significant accounting policies
1.1 Statement of compliance
The financial statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 (âthe Actâ) read with the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
Upto the year ended 31st March, 2017, the Company prepared financial statements in accordance with the requirements of previous GAAP, which includes standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act.
These are Companyâs first Ind AS based financial statements. The date of transition to Ind AS is 1st April, 2016. Company has opted certain exemptions while first-time adoption of Ind AS based Financial statements (refer transition note in Financial Statements)
1.2 Basis of preparation and presentation
The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.
The principal accounting policies are set out below:
All assets and liabilities have been classified as current or non-current according to the Companyâs operating cycle and other criteria set out in the Act. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
1.3 Going concern
The Board of Directors have considered the financial position of the Company at 31 March 2018 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.
The Board of Directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Companyâs operations.
1.4 Use of estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods affected.
1.5 Revenue recognition
The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured and it is probable that future economic benefits will flow to the entity and specific criteria in relation to significant risk.
1.5.1 Sale of goods
Revenue from sale of products is recognised when the products are delivered to the dealer / customer or when delivered to the carrier, when risks and rewards of ownership pass to the dealer / customer, as per terms of contract.
Revenue is measured at the fair value of the consideration received or receivable and net of returns, trade allowances and rebates. It includes excise duty but excludes Value Added Tax and Sales Tax.
1.5.2 Income from service
Income from services is accounted over the period of rendering of services.
1.6 Foreign currencies
1.6.1. Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates (âthe functional currencyâ). The financial statements are presented in Indian rupee, which is the companyâs functional and presentation currency.
1.6.2. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.
1.7 Employee Benefits
1.7.1. Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services upto the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
1.7.2. Other long term employee benefit
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of the expected future payments to be made in respect of services provided by employee upto the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the period-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability in the balance sheet; to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
1.7.3. Post-employment obligation
The Company operates the following post-employment schemes:
a)Defined benefit plans such as gratuity for its eligible employees, and
b)Defined contribution plans such as provident fund.
Defined contribution plan:
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Defined benefit plan:
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance sheet. The Company has funded this with Life Insurance Corporation of India (âLICâ) and HDFC Standard Life Insurance Company. The contributions made to the LIC are treated as plan assets. The defined benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets.
1.7.4. Bonus plans
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation
1.8. Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
1.8.1. Current tax
The income tax expenses or credit is based on taxable profit for the year. Taxable profit differs from âprofit before taxâ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted.
1.8.2. Deferred tax
Deferred tax is provided in full, using the balance sheet approach, on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
1.8.3. Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the income taxes are also recognised in other comprehensive income or directly in equity respectively.
1.9. Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss during the reporting period in which they are incurred.
Transition to Ind AS
On transition to Ind AS, the Company has elected adopt fair value as its deemed cost for the land and apply Ind-AS 16 retrospectively for other class of assets as at 1st April 2016.
Depreciation methods, estimated useful lives and residual value.
Depreciation is calculated using the straight-line method on a prorata basis from the month in which each asset is put to use to allocate their cost, net of their residual values, over their estimated useful lives.
Company has ascertained and adopted the useful life of the asset as mentioned in the Schedule II of Companies Act, 2013
The assetsâ residual values, estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Gains and losses on disposal are determined by comparing proceeds with carrying amount and are credited / debited to profit or loss.
1.9.1. Investment Property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the group, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.
1.9.1.1. Deemed cost on transition to Ind AS
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment property recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
1.10. Intangible assets
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
1.10.1.Deemed cost on transition to Ind AS
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
1.11. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
1.12. Inventories
Inventories are valued at the lower of cost and net realizable value.
The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and appropriate proportion of variable and fixed overhead expenditure. Overhead expenditures are being allocated on the basis of normal operating capacity. Raw materials are valued at first in first out. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Non- production inventory (other than those supplied along with main plant and machinery, which are capitalised and depreciated accordingly) are charged to profit or loss on consumption.
1.13 Provisions and contingencies
Provisions: Provisions are recognised when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessment of the time value of money and the risks specific to the liability
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
1.14 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
1.15 Financial assets
All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
1.15.1. Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortised cost
The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of the cash flows.
A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair value through profit or loss under the fair value option:
- Business model test : the objective of the Companyâs business model is to hold the financial asset to collect the contractual cash flows.
- Cash flow characteristic test : the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
- business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets.
- cash flow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
1.15.2. Financial assets at fair value through profit or loss (FVTPL)
Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognising the gains or losses on them on different bases.
Investments in debt based mutual funds are measured at fair value through profit and loss.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re measurement recognized in profit or loss.
1.15.3. Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment.
1.15.4. Cash and cash equivalents
In the cash flow statement, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits held at call with financial institutions, short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement. Book overdraft are shown within other financial liabilities in the balance sheet and forms part of operating activities in the cash flow statement.
1.15.5. Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model to the following :
- financial assets measured at amortised cost
- financial assets measured at fair value through other comprehensive income
Expected credit loss are measured through a loss allowance at an amount equal to :
- the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
- full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
1.15.6. Income recognition
Interest Income: Interest income from debt instruments is recognised using the effective interest rate method.
1.16 Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at fair value through profit or loss.
1.16.1. Trade and other payables
Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
1.16.2. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
1.16.3. Foreign exchange gains or losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
1.17. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
1.18. Leases
Leases of property, plant and equipment where the Company, as a lessee has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
1.19. Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
1.20. Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
1.21. Earning Per Share
Basic earnings per share have been computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share has been computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive
1.22. Dividends
Final dividends on shares are recorded on the date of approval by the shareholders of the Company.
Mar 31, 2016
a) BASIS OF ACCOUNTING & REVENUE RECOGNITION
The financial statements are prepared under historical costing convention on a going concern basis, with revenue recognized and expenses accounted on accrual concept (including provisions and adjustments) and in accordance with the applicable accounting standards referred to in Section 133 of the Companies Act, 2013.
b) EMPLOYEE BENEFITS
Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.
Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognized at the present value of the amounts payable determined using actuarial valuation techniques.
c) FIXED ASSETS
Fixed assets are stated at historical cost including allocable borrowing costs and exchange differences arising on reporting of long term Foreign currency loans relating to acquisition of fixed assets (as per option exercised in terms of clause 46 of AS 11) and net of specific subsidies, cenvat credit, if any and depreciation.
Preoperative expenses
Expenditure (including financing cost and exchange rate fluctuations relating to the borrowed funds for construction and acquisition of qualifying fixed assets) incurred on projects under implementation are treated as pre-operative expense pending allocation to the assets and are shown under "Capital Work in Progress" and transferred to the concerned assets on pro-rata basis after installation and commencement of operations.
d) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are initially recorded at the exchange rate at which the transaction is carried out. Gains or losses on the settlement of these transactions, if any, within the same accounting year are recognized in the Statement of Profit & Loss prepared for the said year on a net off basis, except exchange differences arising on restatement of borrowings for acquisition of fixed assets, which restatement has been done taking into consideration the terms of relevant hedge / derivative contracts applicable. The monetary assets and liabilities related to foreign currency transactions remaining outstanding at the year end are restated.
e) DERIVATIVE TRANSACTION
In respect of derivative contracts, bank charges, provision for losses on restatement and gains / losses on settlement are recognized along with the underlying transactions and charged to Statement of Profit and Loss.
f) INVENTORY VALUATION
Inventory is valued at lower of cost and net realizable value as under:
a) Raw material is valued at cost on FIFO basis.
b) In respect of sugar and industrial alcohol, cost is arrived at on historical cost basis after deducting the realizable value of the by-products. In respect of manufactured finished goods, excise duty and cess payable are added to the cost, wherever applicable.
c) In respect of immovable property cost is taken as the net payment for acquisition and expenses incurred therewith till the date of title perfection.
d) In respect of semi-finished goods (in process) cost is taken as cost of input raw materials and estimated cost of manufacture up to the various stages of completion.
e) Stores and spares are valued at Weighted Average cost.
g) INVESTMENTS
Investments are stated at cost inclusive of expenses incidental to acquisition.
h) DEPRECIATION
Depreciation on fixed assets has been provided on straight-line method in terms of Schedule II to the Companies Act 2013 adopting the useful life and residual value as stated therein for the respective assets. In respect of additions during the year, depreciation has been provided on pro-rata basis.
i) INCOME AND EXPENDITURE RECOGNITION
Revenue on sales transactions is recognized as and when the property in the goods sold is transferred to the buyers for a definite consideration. Revenue from other sources and expenses are recognized on accrual basis.
j) EXCISE DUTY
Excise duty in respect of goods manufactured is accounted at the time of removal of goods from the factory for sale.
Cenvat credit, if any, in respect of capital goods is deducted from the respective assets and in respect of revenue items are deducted in the respective expenditure itself.
k) TAXATION
Provision for taxation is made as per estimated total income after considering various reliefs admissible under the provisions of the Income Tax Act, 1961.
In accordance with the Accounting Standard 22, the deferred tax for the timing differences between the book and tax profits for the year is accounted for using the tax rates and laws in force as of the balance sheet date.
l) TURNOVER
Sales are stated inclusive of excise duty and cess net of discount and rebate but exclusive of sales tax collected wherever applicable. Export sales include export incentives.
m) LEASED ASSETS
Operating lease rentals are expensed/ recognized with reference to lease terms and other considerations.
n) IMPAIRMENT OF ASSETS
Impairment is recognized to the extent that the recoverable amount of an asset is less than its carrying amount and is charged to the Statement of Profit & Loss as prescribed in AS-28.
o) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provision is recognized only when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Financial Statements. Contingent Assets are neither recognized nor disclosed in the Financial Statements.
Mar 31, 2015
1) The term loans aggregating to Rs. 47,546.80 lakhs (Rs. 44,311.41 lakhs)
under Corporate Debt Restructuring Scheme (CDR) are secured as detailed
below:
a) First pari-passu charge on the fixed assets of the company except
the following:
i. Co-generation assets of Unit-II at Mundiampakkam and entire fixed
assets of Unit-III at Gingee whose first pari- passu charge is
exclusively charged to SDF and SBI.
ii. 5.19 Acres of land with buildings at Vilankurichi Village belonging
to Company exclusively charged to ICICI Bank.
iii. Land at Pallipuram Village, Alleppey Dist., Kerala belonging to
Company exclusively charged to ICICI Bank.
iv. Registered office (The Uffizi) at Coimbatore exclusively charged to
ICICI Bank.
v. 2/3rd undivided rights on the interests in the plot of land
admeasuring about 375 sq yards along with the first and second floors
terrace floors along with the mezannine floor situated at municipal
number 186, Block No. 10, Golf Links, New Delhi exclusively charged to
Axis Bank.
b) Second pari-passu charge on the entire fixed assets of Unit-III at
Gingee subject to approval for sharing the security from Sugar
Development Fund.
c) First pari-passu charge over the cogeneration receivables of the
Unit-II & III.
d) Second pari-passu charge over the remaining current assets of the
company.
e) First Paripassu charge on the additional securities, as briefed
below, provided by the company for CDR package.
i. Vacant Land situated at TS No 613/2(Part), TS Ward 10, Krishnaraya
Puram Village, Coimbatore North Taluk, Coimbatore District within
Coimbatore City Municipal Corporation measuring 80 cents.
ii. Land and building (Bio Control Unit at Unit 1 Theni) situated at
Gullapuram Village, Periyakulam Taluk, Theni District, Gullapuram
Panchayat.
iii. Residential Flat No 2 at Door No 9 Sathyanarayana Avenue, Raja
Annamalaipuram Chennai 600 028.
f) The Cogeneration receivables of the Unit- II & III, presently
charged exclusively to State Bank of India, will be pooled into the
Trust and Retention Account for all lenders under CDR Package.
g) The Promoter(s) have pledged their entire shares in demat form with
voting rights, in favour of the CDR Lenders.
h) The mortgages, charges and pledges referred to above shall rank pari
passu with the mortgages, charges and pledges created and/or to be
created in favour of the Acceding Lenders.
2) The term loan (Axis TL II) of Rs. 942.84 lakhs (Rs. 1,257.13 lakhs) is
secured by 1st exclusive charge on land and buildings of the Company at
Golf Links, New Delhi and subservient charge on the entire movable
fixed assets of the company.
3) Term loans (SDF) aggregating to Rs. 3,894.44 lakhs (Rs. 4,722.08 lakhs)
are secured by 1st paripassu charge on the fixed/immovable assets of
Unit-III (Sugar, Cogeneration & Distillery).
4) The loans aggregating to Rs. 47,546.80 lakhs (Rs. 44,311.41 lakhs)
guaranteed by Managing Director.
5) Term loans Guaranteed by others is Nil.
1) The Working Capital Facilities aggregating to Rs. 14,307 lakhs (Rs.
14,307 lakhs) under the CDR are secured as detailed below:
a) First pari-passu charge over the current assets of the company.
b) Second pari-passu charge on the fixed assets of the company except
the following:
i. Co-generation assets of Unit-II at Mundiampakkam and entire fixed
assets of Unit-III at Gingee whose first pari- passu charge is
exclusively charged to SDF and SBI.
ii. 5.19 Acres of land with buildings at Vilankurichi Village belonging
to Company exclusively charged to ICICI Bank.
iii. Land at Pallipuram Village, Alleppey Dist., Kerala belonging to
Company exclusively charged to ICICI Bank.
iv. Registered office (Uffizi) at Coimbatore exclusively charged to
ICICI Bank
v. 2/3rd undivided rights on the interests in the plot of land
admeasuring about 375 sq yards along with the first and second floors
terrace floors along with the mezannine floor situated at municipal
number 186, block no. 10, Golf Links, New Delhi exclusively charged to
Axis Bank.
c) Second pari-passu charge on the additional securities, as briefed
below, provided by the company for CDR package.
i. Vacant Land situated at TS No 613/2(Part), TS Ward 10, Krishnaraya
Puram Village, Coimbatore North Taluk, Coimbatore District within
Coimbatore city Municipal Corporation measuring 80 cents.
ii. Land and building (Bio Control Unit at Unit 1 Theni) situated at
Gullapuram Village, Periyakulam Taluk Theni District, Gullapuram
Panchayat.
iii. Residential Flat No 2 at Door No 9 Sathyanarayana Avenue, Raja
Annamalaipuram Chennai 600 028
d) First pari-passu charge over the cogeneration receivables of the
Unit-II & III.
e) Third pari-passu charge on the entire fixed assets of Unit-III at
Gingee subject to approval for sharing the security from Sugar
Development Fund.
f) The Cogeneration receivables of the Unit- II & III, presently
charged exclusively to SBI, will be pooled into the Trust and Retention
Account for all lenders under CDR Package.
g) The Promoter(s) have pledged their entire shares in demat form with
voting rights, in favour of the CDR Lenders.
h) The mortgages/charges and pledges referred to above shall rank pari
passu with the mortgages/charges and pledges created and/or to be
created in favour of the Acceding Lenders.
2) Working Capital facilities aggregating to Rs. 14,307 lakhs (Rs. 14,307
lakhs) guaranteed by Managing Director.
3) Short term loans Guaranteed by others is Nil.
4) Period and amount of default in respect of the aforesaid loans is
Nil.
The financial statements are prepared under historical costing
convention on a going concern basis, with revenue recognised and
expenses accounted on accrual concept (including provisions and
adjustments) and in accordance with the applicable accounting standards
referred to in Section 133 of the Companies Act, 2013.
b) EMPLOYEE BENEFITS
Short term employee benefits are charged off at the undiscounted amount
in the year in which the related service is rendered.
Post employment and other long term employee benefits are charged off
in the year in which the employee has rendered services. The amount
charged off is recognized at the present value of the amounts payable
determined using actuarial valuation techniques.
c) FIXED ASSETS
Fixed assets are stated at historical cost including allocable
borrowing costs and exchange differences arising on reporting of long
term Foreign currency loans relating to acquisition of fixed assets (as
per option exercised in terms of clause 46 ofAS 11) and net of specific
subsidies, cenvat credit, if any, and depreciation.
Preoperative expenses
Expenditure (including financing cost and exchange rate fluctuations
relating to the borrowed funds for construction and acquisition of
qualifying fixed assets) incurred on projects under implementation are
treated as pre-operative expense pending allocation to the assets and
are shown under "Capital Work in Progress" and transferred to the
concerned assets on pro-rata basis after installation and commencement
of operations.
d) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are initially recorded at the exchange
rate at which the transaction is carried out. Gains or losses on the
settlement of these transactions, if any, within the same accounting
year are recognized in the Profit & Loss Account prepared for the said
year on a net off basis, except exchange differences arising on
restatement of borrowings for acquisition of fixed assets, which
restatement has been done taking into consideration the terms of
relevant hedge / derivative contracts applicable. The monetary assets
and liabilities related to foreign currency transactions remaining
outstanding at the year end are restated.
e) DERIVATIVE TRANSACTION
In respect of derivative contracts, bank charges, provision for losses
on restatement and gains / losses on settlement are recognized
alongwith the underlying transactions and charged to Statement of
Profit and Loss.
f) INVENTORY VALUATION
Inventory is valued at lower of cost and net realizable value as under:
a) Raw material is valued at cost on FIFO basis.
b) In respect of sugar and industrial alcohol, cost is arrived at on
historical cost basis after deducting the realisable value of the
by-products. In respect of manufactured finished goods, excise duty and
cess payable are added to the cost, wherever applicable.
c) In respect of immovable property cost is taken as the net payment
for acquisition and expenses incurred therewith till the date of title
perfection.
d) In respect of semi-finished goods (in process) cost is taken as cost
of input raw materials and estimated cost of manufacture upto the
various stages of completion.
e) Stores and spares are valued at Weighted Average cost.
g) INVESTMENTS
Investments are stated at cost inclusive of expenses incidental to
acquisition.
h) DEPRECIATION
Depreciation of fixed assets has been provided in terms of Schedule II
to the Companies Act 2013 adopting the useful life and residual value
as stated therein for the respective assets. In respect of additions
during the year, depreciation has been provided on pro-rata basis.
i) INCOME AND EXPENDITURE RECOGNITION
Revenue on sales transactions is recognised as and when the property in
the goods sold is transferred to the buyers for a definite
consideration. Revenue from other sources and expenses are recognised
on accrual basis.
j) EXCISE DUTY
Excise duty in respect of goods manufactured is accounted at the time
of removal of goods from the factory for sale.
Cenvat credit, if any, in respect of capital goods is deducted from the
respective assets and in respect of revenue items are deducted in the
respective expenditure itself.
k) TAXATION
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In accordance with the Accounting Standard 22, the deferred tax for the
timing differences between the book and tax profits for the year is
accounted for using the tax rates and laws in force as of the balance
sheet date.
l) TURNOVER
Sales are stated inclusive of excise duty and cess net of discount and
rebate but exclusive of sales tax collected wherever applicable. Export
sales include export incentives.
m) LEASED ASSETS
Operating lease rentals are expensed/ recognized with reference to
lease terms and other considerations.
n) IMPAIRMENT OF ASSETS
Impairment is recognized to the extent that the recoverable amount of
an asset is less than its carrying amount and is charged to the Profit
and Loss Account as prescribed in AS-28.
o) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provision is recognized only when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but are
disclosed in the Financial Statements. Contingent Assets are neither
recognized nor disclosed in the Financial Statements.
13) Provision towards Gratuity and superannuation schemes has been made
upto date as per the demands received from Life Insurance Corporation
of India and HDFC Standard Life Insurance Company Limited based on
actuarial valuation. Provision for leave encashment benefit has been
made for the entire amount due and payable as at the close of the year.
The disclosures required under Accounting Standard 15 "Employee
Benefits" are as follows.
The estimates of rate of escalation in salary considered in actuarial
valuation, taken into account the inflation, seniority, promotion and
other relevant factors including supply and demand in the employment
market. The above information is certified by the actuary.
Mar 31, 2014
I) BASIS OF ACCOUNTING & REVENUE RECOGNITION
The financial statements are prepared under historical costing
convention on a going concern basis, with revenue recognised and
expenses accounted on accrual concept (including provisions and
adjustments) and in accordance with the applicable accounting standards
referred to in sub section 3C of section 211 of the Companies Act,
1956.
ii) EMPLOYEE BENEFITS
Short term employee benefits are charged off at the undiscounted amount
in the year in which the related service is rendered.
Post employment and other long term employee benefits are charged off
in the year in which the employee has rendered services. The amount
charged off is recognized at the present value of the amounts payable
determined using actuarial valuation techniques.
iii) FIXED ASSETS
Fixed assets are stated at historical cost including allocable
borrowing costs and exchange differences arising on reporting of long
term Foreign currency loans relating to acquisition of fixed assets (as
per option exercised in terms of clause 46 of AS 11) and net of
specific subsidies, cenvat credit, if any, and depreciation.
Preoperative expenses
Expenditure (including financing cost and exchange rate fluctuations
relating to the borrowed funds for construction and acquisition of
qualifying fixed assets) incurred on projects under implementation are
treated as pre-operative expense pending allocation to the assets and
are shown under "Capital Work in Progress" and transferred to the
concerned assets on pro-rata basis after installation and commencement
of operations.
iv) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are initially recorded at the exchange
rate at which the transaction is carried out. Gains or losses on the
settlement of these transactions, if any, within the same accounting
year are recognized in the Statement of Profit & Loss prepared for the
said year on a net off basis, except exchange differences arising on
restatement of borrowings for acquisition of fixed assets, which
restatement has been done taking into consideration the terms of
relevant hedge / derivative contracts applicable. The monetary assets
and liabilities related to foreign currency transactions remaining
outstanding at the year end are restated.
v) DERIVATIVE TRANSACTION
In respect of derivative contracts, bank charges, provision for losses
on restatement and gains / losses on settlement are recognized
alongwith the underlying transactions and charged to Statement of
Profit & Loss.
vi) INVENTORY VALUATION
Inventory is valued at lower of cost and net realizable value as under:
a) Raw material is valued at cost on FIFO basis.
b) In respect of sugar and industrial alcohol, cost is arrived at on
historical cost basis after deducting the realisable value of the by
products. In respect of manufactured finished goods, excise duty and
cess payable are added to the cost, wherever applicable.
c) In respect of immovable property cost is taken as the net payment
for acquisition and expenses incurred therewith till the date of title
perfection.
d) In respect of semi finished goods (in process) cost is taken as cost
of input raw materials and estimated cost of manufacture upto the
various stages of completion.
e) Stores and spares are valued at Weighted Average cost.
vii) INVESTMENTS
Investments are stated at cost inclusive of expenses incidental to
acquisition.
viii)DEPRECIATION
Depreciation is provided on straight line method prorated to the number
of days used during the year in accordance with the provisions of
Section 205 (2) (b) of the Companies Act, 1956. In respect of Plant and
Equipment''s costing Rs. 5,000/- or less, 100% depreciation is provided.
ix) INCOME AND EXPENDITURE RECOGNITION
Revenue on sales transactions is recognized as and when the property in
the goods sold is transferred to the buyers for a definite
consideration. Revenue from other sources and expenses are recognized
on accrual basis.
x) EXCISE DUTY
Excise duty in respect of goods manufactured is accounted at the time
of removal of goods from the factory for sale.
Cenvat credit, if any, in respect of capital goods is deducted from the
respective assets and in respect of revenue items are deducted in the
respective expenditure itself.
xi) TAXATION
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In accordance with the Accounting Standard 22, the deferred tax for the
timing differences between the book and tax profits for the year is
accounted for using the tax rates and laws in force as of the balance
sheet date.
xii) TURNOVER
Sales are stated inclusive of excise duty and cess net of discount and
rebate but exclusive of sales tax collected wherever applicable. Export
sales include export incentives.
xiii)LEASED ASSETS
Operating lease rentals are expensed/ recognized with reference to
lease terms and other considerations.
xiv)IMPAIRMENT OF ASSETS
Impairment is recognized to the extent that the recoverable amount of
an asset is less than its carrying amount and is charged to the
Statement of Profit and Loss as prescribed in AS-28.
xv) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provision is recognized only when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but are
disclosed in the Financial Statements. Contingent Assets are neither
recognized nor disclosed in the Financial Statements.
Mar 31, 2013
I) BASIS OF ACCOUNTING & REVENUE RECOGNITION
The financial statements are prepared under historical costing
convention on a going concern basis, with revenue recognised and
expenses accounted on accrual concept (including provisions and
adjustments) and in accordance with the applicable accounting standards
referred to in sub section 3C of section 211 of the Companies Act,
1956.
ii) EMPLOYEE BENEFITS
Short term employee benefits are charged off at the undiscounted amount
in the year in which the related service is rendered.
Post employment and other long term employee benefits are charged off
in the year in which the employee has rendered services. The amount
charged off is recognized at the present value of the amounts payable
determined using actuarial valuation techniques.
iii) FIXED ASSETS
Fixed assets are stated at historical cost including allocable
borrowing costs and exchange differences arising on reporting of long
term Foreign currency loans relating to acquisition of fixed assets (as
per option exercised in terms of clause 46 of AS 11) and net of
specific subsidies, cenvat credit, if any and depreciation.
Preoperative expenses
Expenditure (including financing cost and exchange rate fluctuations
relating to the borrowed funds for construction and acquisition of
qualifying fixed assets) incurred on projects under implementation are
treated as pre-operative expense pending allocation to the assets and
are shown under "Capital Work in Progress" and transferred to the
concerned assets on pro-rata basis after installation and commencement
of operations.
iv) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are initially recorded at the exchange
rate at which the transaction is carried out. Gains or losses on the
settlement of these transactions, if any, within the same accounting
year are recognized in the Statement of Profit & Loss prepared for the
said year on a net off basis, except exchange differences arising on
restatement of borrowings for acquisition of fixed assets, which
restatement has been done taking into consideration the terms of
relevant hedge / derivative contracts applicable. The monetary assets
and liabilities related to foreign currency transactions remaining
outstanding at the year end are restated.
v) DERIVATIVE TRANSACTION
In respect of derivative contracts, bank charges, provision for losses
on restatement and gains / losses on settlement are recognized
alongwith the underlying transactions and charged to Statement of
profit and loss.
vi) INVENTORY VALUATION
Inventory is valued at lower of cost and net realizable value as under:
a) Raw material is valued at cost on FIFO basis.
b) In respect of sugar and industrial alcohol, cost is arrived at on
historical cost basis after deducting the realisable value of the by
products. In respect of manufactured finished goods, excise duty and
cess payable are added to the cost, wherever applicable.
c) In respect of immovable property cost is taken as the net payment
for acquisition and expenses incurred therewith till the date of title
perfection.
d) In respect of semi finished goods (in process) cost is taken as cost
of input raw materials and estimated cost of manufacture upto the
various stages of completion.
e) Stores and spares are valued at Weighted Average cost.
vii) INVESTMENTS
Investments are stated at cost inclusive of expenses incidental to
acquisition.
viii) DEPRECIATION
Depreciation is provided on straight line method pro rated to the
number of days used during the year in accordance with the provisions
of Section 205 (2) (b) of the Companies Act, 1956. In respect of Plant
and Equipment''s costing Rs. 5,000/- or less, 100% depreciation is
provided.
ix) INCOME AND EXPENDITURE RECOGNITION
Revenue on sales transactions is recognised as and when the property in
the goods sold is transferred to the buyers for a definite
consideration. Revenue from other sources and expenses are recognised
on accrual basis.
x) EXCISE DUTY
Excise duty in respect of goods manufactured is accounted at the time
of removal of goods from the factory for sale.
Cenvat credit, if any, in respect of capital goods is deducted from the
respective assets and in respect of revenue items are deducted in the
respective expenditure itself.
xi) TAXATION
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In accordance with the Accounting Standard 22, the deferred tax for the
timing differences between the book and tax profits for the year is
accounted for using the tax rates and laws in force as of the balance
sheet date.
xii) TURNOVER
Sales are stated inclusive of excise duty and cess net of discount and
rebate but exclusive of sales tax collected wherever applicable. Export
sales include export incentives.
xiii) LEASED ASSETS
Operating lease rentals are expensed / recognized with reference to
lease terms and other considerations.
xiv) IMPAIRMENT OF ASSETS
Impairment is recognized to the extent that the recoverable amount of
an asset is less than its carrying amount and is charged to the
Statement of Profit and Loss as prescribed in AS-28.
xv) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provision is recognized only when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Contingent Liabilities are not recognized but are
disclosed in the Financial Statements. Contingent Assets are neither
recognized nor disclosed in the Financial Statements.
Mar 31, 2012
I) BASIS OF ACCOUNTING & REVENUE RECOGNITION
The financial statements are prepared under historical costing
convention on a going concern basis, with revenue recognised and
expenses accounted on accrual concept (including provisions and
adjustments) and in accordance with the applicable accounting standards
referred to in sub section 3C of section 211 of the Companies Act,
1956.
ii) EMPLOYEE BENEFITS
Short term employee benefits are charged off at the undiscounted amount
in the year in which the related service is rendered.
Post employment and other long term employee benefits are charged off
in the year in which the employee has rendered services. The amount
charged off is recognized at the present value of the amounts payable
determined using actuarial valuation techniques.
iii) FIXED ASSETS
Fixed assets are stated at historical cost including allocable
borrowing costs and exchange differences arising on reporting of long
term Foreign currency loans relating to acquisition of fixed assets (as
per option exercised in terms of clause 46 of AS 11) and net of
specific subsidies, cenvat credit, if any and depreciation.
Preoperative expenses
Expenditure (including financing cost and exchange rate fluctuations
relating to the borrowed funds for construction and acquisition of
qualifying fixed assets) incurred on projects under implementation are
treated as pre-operative expense pending allocation to the assets and
are shown under "Capital Work in Progress" and transferred to the
concerned assets on pro-rata basis after installation and commencement
of operations.
iv) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are initially recorded at the exchange
rate at which the transaction is carried out. Gains or losses on the
settlement of these transactions, if any, within the same accounting
year are recognized in the Statement of Profit & Loss prepared for the
said year on a net off basis, except exchange differences arising on
restatement of borrowings for acquisition of fixed assets, which
restatement has been done taking into consideration the terms of
relevant hedge / derivative contracts applicable. The monetary assets
and liabilities related to foreign currency transactions remaining
outstanding at the year end are restated.
v) DERIVATIVE TRANSACTION
In respect of derivative contracts, bank charges, provision for losses
on restatement and gains / losses on settlement are recognized
alongwith the underlying transactions and charged to profit and loss
account.
vi) INVENTORY VALUATION
Inventory is valued at lower of cost and net realizable value as under:
a) Raw material is valued at cost on FIFO basis.
b) In respect of sugar and industrial alcohol, cost is arrived at on
historical cost basis after deducting the realisable value of the by
products. In respect of manufactured finished goods, excise duty and
cess payable are added to the cost, wherever applicable.
c) In respect of immovable property cost is taken as the net payment
for acquisition and expenses incurred therewith till the date of title
perfection.
d) In respect of semi finished goods (in process) cost is taken as cost
of input raw materials and estimated cost of manufacture upto the
various stages of completion.
e) Stores and spares are valued at Weighted Average cost.
vii) INVESTMENTS
Investments are stated at cost inclusive of expenses incidental to
acquisition.
viii) DEPRECIATION
Depreciation is provided on straight line method pro rated to the
number of days used during the year in accordance with the provisions
of Section 205 (2) (b) of the Companies Act, 1956. In respect of Plant
and Equipment's costing Rs 5,000/- or less, 100% depreciation is
provided.
ix) INCOME AND EXPENDITURE RECOGNITION
Revenue on sales transactions is recognised as and when the property in
the goods sold is transferred to the buyers for a definite
consideration. Revenue from other sources and expenses are recognised
on accrual basis.
x) EXCISE DUTY
Excise duty in respect of goods manufactured is accounted at the time
of removal of goods from the factory for sale.
Cenvat credit, if any, in respect of capital goods is deducted from the
respective assets and in respect of revenue items are deducted in the
respective expenditure itself.
xi) TAXATION
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In accordance with the Accounting Standard 22, the deferred tax for the
timing differences between the book and tax profits for the year is
accounted for using the tax rates and laws in force as of the balance
sheet date.
xii) TURNOVER
Sales are stated inclusive of excise duty and cess net of discount and
rebate but exclusive of sales tax collected wherever applicable. Export
sales include export incentives.
xiii) LEASED ASSETS
Operating lease rentals are expensed/recognized with reference to lease
terms and other considerations.
xiv) IMPAIRMENT OF ASSETS
Impairment is recognized to the extent that the recoverable amount of
an asset is less than its carrying amount and is charged to the Profit
and Loss Account as prescribed in AS-28.
Mar 31, 2011
I) BASIS OF ACCOUNTING & REVENUE RECOGNITION
The financial statements are prepared under historical costing
convention on a going concern basis, with revenue recognised and
expenses accounted on accrual concept (including provisions and
adjustments) and in accordance with the applicable accounting standards
referred to in sub section 3C of section 211 of the Companies Act,
1956.
ii) EMPLOYEE BENEFITS
Short term employee benefits are charged off at the undiscounted amount
in the year in which the related service is rendered.
Post employment and other long term employee benefits are charged off
in the year in which the employee has rendered services. The amount
charged off is recognized at the present value of the amounts payable
determined using actuarial valuation techniques.
iii) FIXED ASSETS
Fixed assets are stated at historical cost including allocable
borrowing costs and exchange differences arising on reporting of long
term Foreign currency loans relating to acquisition of fixed assets (as
per option exercised in terms of newly inserted clause 46 of AS 11) and
net of specific subsidies, cenvat credit, if any and depreciation.
Preoperative expenses
Expenditure (including financing cost and exchange rate fluctuations
relating to the borrowed funds for construction and acquisition of
qualifying fixed assets) incurred on projects under implementation are
treated as pre-operative expense pending allocation to the assets and
are shown under "Capital Work in Progress" and transferred to the
concerned assets on pro-rata basis after installation and commencement
of operations.
iv) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are initially recorded at the exchange
rate at which the transaction is carried out. Gains or losses on the
settlement of these transactions, if any, within the same accounting
year are recognized in the Profit & Loss Account prepared for the said
year on a net off basis, except exchange differences arising on
restatement of borrowings for acquisition of fixed assets, which
restatement has been done taking into consideration the terms of
relevant hedge / derivative contracts applicable. The monetary assets
and liabilities related to foreign currency transactions remaining
outstanding at the year end are restated.
v) DERIVATIVE TRANSACTION
In respect of derivative contracts, bank charges, provision for losses
on restatement and gains / losses on settlement are recognized
alongwith the underlying transactions and charged to profit and loss
account.
vi) INVENTORY VALUATION
Inventory is valued at lower of cost and net realizable value as under:
a) Raw material is valued at cost on FIFO basis.
b) In respect of sugar and industrial alcohol, cost is arrived at on
historical cost basis after deducting the realisable value of the by
products. In respect of manufactured finished goods, excise duty and
cess payable are added to the cost, wherever applicable.
c) In respect of immovable property cost is taken as the net payment
for acquisition and expenses incurred therewith till the date of title
perfection.
d) In respect of semi finished goods (in process) cost is taken as cost
of input raw materials and estimated cost of manufacture upto the
various stages of completion.
e) Stores and spares are valued at Weighted Average cost basis
vii) INVESTMENTS
Investments are stated at cost inclusive of expenses incidental to
acquisition.
viii) DEPRECIATION
Depreciation is provided on straight line method pro rated to the
number of days used during the year in accordance with the provisions
of Section 205 (2) (b) of the Companies Act, 1956. In respect of plant
and machinery costing less than Rs.5,000/-, 100% depreciation is
provided.
ix) INCOME AND EXPENDITURE RECOGNITION
Revenue on sales transactions is recognised as and when the property in
the goods sold is transferred to the buyers for a definite
consideration. Revenue from other sources and expenses are recognised
on accrual basis.
x) EXCISE DUTY
Excise duty in respect of goods manufactured is accounted at the time
of removal of goods from the factory for sale.
Cenvat credit, if any, in respect of capital goods is deducted from the
respective assets and in respect of revenue items are deducted in the
respective expenditure itself.
xi) TAXATION
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In accordance with the Accounting Standard 22, the deferred tax for the
timing differences between the book and tax profits for the year is
accounted for using the tax rates and laws in force as of the balance
sheet date.
xii) TURNOVER
Sales are stated inclusive of excise duty and cess net of discount and
rebate but exclusive of sales tax collected wherever applicable. Export
sales includes export incentives.
xiii) LEASED ASSETS
Operating lease rentals are expensed / recognized with reference to
lease terms and other considerations.
xiv) IMPAIRMENT OF ASSETS
Impairment is recognized to the extent that the recoverable amount of
an asset is less than its carrying amount and is charged to the Profit
and Loss Account as prescribed in Accounting Standard 28.
Mar 31, 2010
I) BASIS OF ACCOUNTING & REVENUE RECOGNITION
The financial statements are prepared under historical costing
convention on a going concern basis, with revenue recognised and
expenses accounted on accrual concept (including provisions and
adjustments) and in accordance with the applicable accounting standards
referred to in sub section 3C of section 211 of the Companies Act,
1956.
ii) EMPLOYEE BENEFITS
Short term employee benefits are charged off at the undiscounted amount
in the year in which the related service is rendered.
Post employment and other long term employee benefits are charged off
in the year in which the employee has rendered services. The amount
charged off is recognized at the present value of the amounts payable
determined using actuarial valuation techniques.
iii) FIXED ASSETS
Fixed assets are stated at historical cost including allocable
borrowing costs and exchange differences arising on reporting of long
term Foreign currency loans relating to acquisition of fixed assets (as
per option exercised in terms of newly inserted clause 46 of Accounting
Standard 11) and net of specific subsidies, cenvat credit, if any and
depreciation.
Preoperative expenses
Expenditure (including financing cost and exchange rate fluctuations
relating to the borrowed funds for construction and acquisition of
qualifying fixed assets) incurred on projects under implementation are
treated as pre-operative expense pending allocation to the assets and
are shown under "Capital Work in Progress" and transferred to the
concerned assets on pro-rata basis after installation and commencement
of operations.
iv) FOREIGN CURRENCYTRANSACTIONS
Transactions in foreign currency are initially recorded at the exchange
rate at which the transaction is carried out. Gains or losses on the
settlement of these transactions, if any, within the same accounting
year are recognized in the Profit & Loss Account prepared for the said
year on a net off basis, except exchange differences arising on
restatement of borrowings for acquisition of fixed assets, which
restatement has been done taking into consideration the terms of
relevant hedge / derivative contracts applicable. The monetary assets
and liabilities related to foreign currency transactions remaining
outstanding at the year end are restated.
v) DERIVATIVE TRANSACTION
In respect of derivative contracts, bank charges, provision for losses
on restatement and gains / losses on settlement are recognized
alongwith the underlying transactions and charged to profit and loss
account.
vi) INVENTORY VALUATION
Inventory is valued at lower of cost and net realizable value as under:
a) Raw material is valued at cost on FIFO basis.
b) In respect of sugar and industrial alcohol, cost is arrived at on
historical cost basis after deducting the realisable value of the by
products. In respect of manufactured finished goods, excise duty and
cess payable are added to the cost, wherever applicable.
c) In respect of immovable property cost is taken as the net payment
for acquisition and expenses incurred therewith till the date of title
perfection.
d) In respect of semi finished goods (in process) cost is taken as cost
of input raw materials and estimated cost of manufacture upto the
various stages of completion.
e) Stores and spares are valued at Weighted Average cost basis.
vii) INVESTMENTS
Investments are stated at cost inclusive of expenses incidental to
acquisition.
viii)DEPRECIATION
Depreciation is provided on straight line method pro rated to the
number of days used during the year in accordance with the provisions
of Section 205 (2) (b) of the Companies Act, 1956. In respect of plant
and machinery costing less than Rs.5,000/-, 100% depreciation is
provided.
ix) INCOME AND EXPENDITURE RECOGNITION
Revenue on sales transactions is recognised as and when the property in
the goods sold is transferred to the buyers for a definite
consideration. Revenue from other sources and expenses are recognised
on accrual basis.
x) EXCISE DUTY
Excise duty in respect of goods manufactured is accounted at the time
of removal of goods from the factory for sale.
Cenvat credit, if any, in respect of capital goods is deducted from the
respective assets and in respect of revenue items are deducted in the
respective expenditure itself.
xi) TAXATION
Provision for taxation is made as per estimated total income after
considering various reliefs admissible under the provisions of the
Income Tax Act, 1961.
In accordance with the Accounting Standard 22, the deferred tax for the
timing differences between the book and tax profits for the year is
accounted for using the tax rates and laws in force as of the balance
sheet date.
xii) TURNOVER
Sales are stated inclusive of excise duty and cess net of discount and
rebate but exclusive of sales tax collected wherever applicable. Export
sales includes export incentives.
xiii) LEASED ASSETS
Operating lease rentals are expensed / recognized with reference to
lease terms and other considerations.
xiv) IMPAIRMENT OF ASSETS
Impairment is recognized to the extent that the recoverable amount of
an asset is less than its carrying amount and is charged to the Profit
and Loss Account as prescribed in Accounting Standard 28.
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