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Notes to Accounts of SKM Egg Products Export (India) Ltd.
Mar 31, 2025
Provisions
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, if it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Tax Expenses:
The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except
to the extent that it relates to items recognised in the comprehensive income or equity. In which case, the tax is also
recognised in other comprehensive income or equity.
Current tax:
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities
based on the tax rates that are enacted or substantively enacted at the Balance Sheet date.
The current income tax expense includes income taxes payable by the Company and its branch in overseas. The current tax
payable by the Company in India is the Indian income tax payable on income earned in India and from overseas branch.
Current income tax payable by overseas branch of the Company is computed in accordance with the tax laws applicable in
the jurisdiction in which the respective branch operates. The taxes paid are generally available for set off against the Indian
income tax liability of the Company''s worldwide income.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid
and income tax provision arising in the same tax jurisdiction and where the relevant tax paying unit intends to settle the asset
and liability on a net basis.
Deferred Tax:
Deferred tax is recognised 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 profit.
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 carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting
period.
Cash Flow Statements
Cash Flow Statement has been prepared under âIndirect Methodâ. For the purposes of the cash flow statement, cash and
cash equivalents include cash on hand, in banks and demand deposits with banks, net of outstanding bank overdrafts that
are repayable on demand and are considered part of the Company''s cash management system. In the balance sheet, bank
overdrafts are presented under borrowings within current liabilities.
Property, plant & equipment:
Property, plant & equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated
depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly
attributable to bringing the assets to its working condition for its intended use, net changes on foreign exchange contracts
and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset''s 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 entity and the cost can be measured
reliably.
Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use are
considered as pre-operative expenses and disclosed under Capital Work-in-progress
Depreciation on property, plant & equipment is provided on straight line method as per the useful life prescribed in Schedule II
of the Companies Act 2013, except for imported plant & machinery for which the useful life has been taken based upon the
technical evaluation by the expert committee on the useful life of the assets. In respect of assets added/adjusted during the
year, depreciation is provided on pro-rata basis.
The residual values, useful lives and method of depreciation of property, plant & equipment are reviewed at each financial
year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant & equipment are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the
asset is derecognised.
Foreign currencies transactions and translation:
Transactions in foreign currencies are recorded at the exchange rate prevailing on the dates of transaction. Monetary assets
and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the
reporting rate.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss
except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency
borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of
assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using exchange rates at
the date of transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured
at fair value is treated in line with recognition of the gain or loss on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in OCI or Statement of Profit and Loss are also recognised in
OCI or Statement of Profit and Loss, respectively.
Employee Benefits Expense:
Short Term Employment Benefits:
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by
employees are recognised as an expense during the period when the employees render the services.
Post-Employment Benefits:
Defined Contribution Plans:
A defined contribution plan is a post-employment benefit plan under which the company pays specified contributions to the
specific entity. The company makes specified monthly contributions towards Provident Fund and Pension Scheme. The
company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the
employee renders the related service.
Defined benefit plans:
The gratuity liability amount is contributed to the gratuity fund approved by the respective IT authorities. The present value of
the obligation is determined based on actuarial valuation using the Projected Unit credit method, which recognizes each
period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build
up the final obligation.
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the employment market.
Impairment of non-financial assets - property, plant and equipment:
The company assesses at each reporting date as to whether there is any indication that any property, plant and equipment or
group of assets, called cash generating units (CGU) may be impaired. If any such indication exists, the recoverable amount of
an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable
amount of an individual asset, the company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds the
recoverable amount. The recoverable amount is the higher of an asset''s fair value less cost of disposal and value in use. Value
in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects
current market assessments of the time value of money and risk specific to the assets. The impairment loss recognised in
prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
Events after the reporting period
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting
period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date
of material size and of nature are only disclosed.
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the company''s financial statement requires management to make judgement, estimates and assumptions
that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty
about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
assets or liabilities affected in future periods.
Depreciation / amortisation and useful lives of property, plant and equipment and Livestock:
Property, plant and equipment / Livestock are depreciated / amortised over their estimated useful lives, after taking into
account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually
in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives
and residual values are based on the company''s historical experience with similar assets and take into account anticipated
technological changes. The depreciation / amortisation for the future periods is revised if there are significant changes from
previous estimates.
Recoverability of trade receivable:
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision
against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing
of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds
resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition
and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be
subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of
changing facts and circumstances.
Impairment of non-financial assets:
The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication
exists, the company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or
Cash Generating Units (CGU''s) fair value less costs of disposal and its value in use. It is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from other assets or a group of assets.
Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an
appropriate valuation model is used.
Impairment of financial assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates.
The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on
company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Accounting for Government Grants and Disclosure of Government Assistance:
The Government Grants are accounted in line with IND AS 20 - "Accounting for Government Grants and Disclosure of
Government Assistance".
Unfulfilled conditions and other contingencies attaching to government assistance that has been recognised - Nil.
The grant was received towards the acquisition of PPE (Property, Plant & equipments) during the years spanning from 2018¬
19 to 2020-21 and accordingly treated as a capital grant and adjusted against the cost. The value of Property, Plant &
Equipments is disclosed net of government grants received from MOFPI (Ministry of Food Processing Industries) of
Rs.488.72 lakhs.
APPROVAL OF FINANCIAL STATEMENTS:
The Financial Statements were approved for issue by the board of directors at their meeting held on 30.05.2025
Ind AS - 12 - Income Taxes
During the financial year 2021-22, a search operation was carried out by the Investigation Wing, Chennai on the company.
The search related assessment for the AY 2021-22 & AY 2022-23 was completed and a demand of Rs. 211.53 lakhs &
143.46 lakhs was raised in the said assessment. Out of this, 20% of the demand had been paid as on date and appeal had
been preferred with Commissioner of Income Tax (Appeals) - 20, Chennai against the Assessment order passed by the
Assessing Offficer. Presently demand of Rs.169.22 lakhs (for AY 2021-22) & Rs.114.77 lakhs (for AY 2022-23) respectively
is outstanding for the above cited years. Since the company is confident of coming out successful in the Appeals as per the
advice taken from the legal experts, no provision have been made in the books for the said income tax liability and disclosed
as a contingent liability.
For the assessment year 2013-14, certain amount was disallowed in the assessment, which has the effect of reducing the
loss by of Rs.359.67 lakhs which disallowance was also upheld by the Commissioner of Income Tax (Appeals).
Subsequently, the company has preferred appeal against the order of the CIT (Appeals), wherein the honourable ITAT has
granted relief to the extent of 340.02 lakhs. Consequently, the loss of the year amounting to Rs.340.02 lakhs was restored.
The giving effect order for the said appellate order is subjudice before the Assessing officer, in which appropriate amount of
refund has to be determined.
For the assessment year 2014-15, the company has opted to discharge the tax liability under Vivad Se Viswas Scheme after
withdrawing the appeal filed for the year. As a result of this, the interest liability to the extent of 80.66 lakhs would be waived
off. As the tax payable for the assessment year 2014-15 is under MAT provisions of the Income Tax Act, the amount to be paid
is eligible for set off in the subsequent years against the tax liability under normal provisions of the Income Tax Act,1961.
Therefore, the company would be eligible for refund of the income tax paid in the assessment year 2014-15 in the
subsequent years along with applicable interest. Hence, effectively there is no tax liabilty for the AY 2014-15.
No provision has been made in respect of the above demand of Income Tax and Service Tax, for which the company has filed
appeals with various Higher Appellate Forums, against the orders of the Lower Authorities since the company is confident of
coming out successful in the Appeals as per the advice taken from the legal experts.
Also no provision has been made in respect of the claims made against the company since the company has filed appeal in
the High Court against the claims made and the company is confident of coming out successful in the said appeal as per the
advice taken from the legal experts.
Depreciation:
Depreciation has been provided under Straight Line Method on the basis of useful lives prescribed under Schedule II of the
Companies Act, 2013, except for the Imported Plant & Machinery, whose useful life is different from that prescribed in
Schedule II of the Companies Act, 2013 and its useful life is adopted on the basis of engineering & other expert guidance and
depreciated accordingly as follows:
Imported Plant & Machinery acquired upto 31.03.2007 Useful life - 25 years
Imported Plant & Machinery acquired from 01.04.2007 to 31.03.2015 Useful life - 20 years
Impairment of Assets :
The recoverable amount of the CGU is determined on the basis of Fair Value less Cost of Disposal (FVLCD). The FVLCD of the
CGU is determined based on the market capitalization approach, using the turnover and earnings multiples derived from
observable market data. The fair value measurement is categorized as a level 3 fair value based on the inputs in the valuation
techniques used.
Based on the above, no impairment was identified as of March 31, 2025 and 2024 as the recoverable value of the CGUs
exceeded the carrying value. Further, none of the CGU''s tested for impairment as of March 31,2025 and 2024 were at risk of
impairment. An analysis of the calculation''s sensitivity to a change in the key parameters (revenue growth, operating margin,
discount rate and long-term growth rate) based on reasonably probable assumptions, did not identify any probable
scenarios where the CGU''s recoverable amount would fall below its carrying amount.
Mortgage / Charge on Property, plant & equipments:
Plant & Machinery are under the first charge on account of the Term Loan with banks.
The property, plant & equipments are under the second charge for short term borrowings with banks.
Government Grants:
The value of property, plant & equipments is disclosed net of government grants received from MOFPI (Ministry of Food
Processing Industries) of Rs.488.72 Lakhs during 2018-19 to 2020-21.
15. 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 initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through Statement of Profit and Loss (''FVTPL'')) 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 and loss are recognised immediately in Statement of Profit and Loss.
Trade receivables are initially recognised when they are originated. Trade payables are in respect of the amount due on
account of goods purchased or services availed in the normal course of business. They are recognised at their transaction
and services availed value if the transaction do not contain significant financing component.
a) Financial Assets
(i) Recognition and initial measurement
All financial assets are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition
of financial assets (other than financial assets at fair value through Statement of Profit or Loss (âFVTPL)) are added to
the fair value of the financial assets, on initial recognition. Transaction cost directly attributable to the acquisition of
financial assets at FVTPL are recognized immediately in Statement of Profit and Loss.
(ii) Subsequent measurement
Debt instruments at amortised cost:
A âdebt instrument'' is measured at the amortized cost if both the following conditions are met:
⢠The contractual terms 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.
⢠The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
⢠Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective
interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or
loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade
and other receivables.
Debt instrument at FVTOCI:
A âdebt instrument'' is classified as FVTOCI if both of the following criteria are met:
⢠The objective of the business model is achieved both by collecting contractual cash flows and selling the financial
assets, and
⢠The asset''s contractual cash flows represent SPPI.
⢠Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair
value. Fair value movements are recognized in the other comprehensive income (OCI).
Debt instrument at FVTPL:
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as
amortized cost or as FVTOCI, is classified as FVTPL. Debt instruments included within the FVTPL category are measured at
fair value with all changes recognized in the statement of profit and loss.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI
criteria, as FVTPL. However, such election is chosen only if doing so reduces or eliminates a measurement or recognition
inconsistency (referred to as âaccounting mismatch'').
(iii) De-recognition of financial assets
A financial asset is de-recognised only when;
a. The entity has transferred the rights to receive cash flows from the financial asset or
b. The entity retains the contractual rights to receive the cash flows of the financial asset, but expects a contractual
obligation to pay the cash flows to one or more recipients.
Where entity has transferred an asset, it examines and assesses whether it has transferred substantially all risk and
rewards of ownership of financial asset. In such cases, financial asset is de-recognised. Where entity has not
transferred substantially all risks and rewards of ownership of financial asset, such financial asset is not de¬
recognised.
Where the entity has neither transferred a financial asset nor retains substantially all risk and rewards of ownership of
the financial asset, the financial asset is de-recognised, if the Group has not retained control of the financial asset.
Where the entity retains control of the financial asset is continued to be recognised to the extent of continuing
involvement in the financial asset.
(iv) Investments in Equity Instruments in Subsidiary and Associates:
The Company has elected to carry investment in Equity Instruments in Subsidiary and Associates at cost in
accordance with Paragraphs 10 of â Ind AS 27 - Separate Financial Statements''.
b) Financial liabilities and equity instruments
(i) Initial recognition and measurement
All financial liabilities are recognized initially at fair value plus transaction cost (if any) that is attributable to the
acquisition of the financial liabilities which is also adjusted.
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings:
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are de-recognised
through the EIR amortization process. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the
statement of profit and loss.
Trade and other payables:
These amounts represent liabilities for goods or services provided to the Company which are unpaid at the end of the
reporting period. Trade and other payables are presented as current liabilities when the payment is due within a period of 12
months from the end of the reporting period. For all trade and other payables classified as current, the carrying amounts
approximate fair value due to the short maturity of these instruments. Other payables falling due after 12 months from the end
of the reporting period are presented as non-current liabilities and are measured at amortised cost unless designated at fair
value through profit and loss at the inception.
Other financial liabilities at fair value through profit or loss:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading or
designated as at FVTPL are recognized in the profit or loss.
(iii) Derecognition of financial liabilities:
A financial liability is de-recognised 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 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 or loss.
c) Offsetting
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to
realize the assets and settle the liabilities simultaneously.
d) Impairment of Financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is
impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company
recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a
financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-
month expected credit losses or at an amount equal to the life time expected credit losses, if the credit risk on the
financial asset has increased significantly since initial recognition.
e) Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability which are accessible to
the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non financial asset takes into account a market participant''s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in
its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available
to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
Valuation:
The financial instruments are initially recognized and subsequently re-measured at fair value as described below :
(a) The fair value of Forward Foreign Exchange contracts is determined using forward exchange rates and yield curves at
the balance sheet date.
(b) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.
(c) All foreign currency denominated assets and liabilities using exchange rate at the reporting date.
Fair Value measurement hierarchy:
The fair value of cash and cash equivalents, other bank balances, loans, trade receivables, trade payables and others
approximates their carrying amount. The company uses the following hierarchy for determining and disclosing the fair value
of financial instruments by valuation techniques. The fair valuation of current investment is done by Level 1 category
valuation, as the investment is quoted and has active market and the various other financial assets and liabilities are done by
adopting Level 3 category valuation, as there are no observable inputs for the same.
f) Derivative financial instruments
Derivative financial instruments are accounted for at FVTPL except for derivatives designated as hedging instruments
in cash flow hedge relationships, which require a specific accounting treatment. To qualify for hedge accounting, the
hedging relationship must meet several strict conditions with respect to documentation, probability of occurrence of
the hedged transaction and hedge effectiveness. These arrangements have been entered into to mitigate currency
exchange risk arising on account of repayment of foreign currency term loan and interest thereon.
The Company uses derivative financial instrument i.e. forward contracts to mitigate the risk of foreign exchange
exchange rates. At the inception of a hedge relationship, the Company formally designates and documents the hedge
relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy
for undertaking the hedge.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and
Loss, except for the effective portion of cash flow hedge which is recognised in Other Comprehensive Income and
later to Statement of Profit and Loss when the hedged item affects profit or loss or is treated as basis adjustment if a
hedged forecast transaction subsequently results in the recognition of a Non-Financial Assets or Non-Financial
liability.
A. Cash Flow Hedge:
The Company designates derivative contracts or non-derivative Financial Assets/ Liabilities as hedging instruments to
mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly
probable future cash flows attributable to a recognised asset or liability or forecast cash transactions.
B. Fair Value Hedge:
The Company designates derivative contracts or non-derivative Financial Assets/Liabilities as hedging instruments to
mitigate the risk of change in fair value of hedged item due to movement in interest rates, foreign exchange rates and
commodity prices.
16. CAPITAL MANAGEMENT - ADDITIONAL CAPITAL DISCLOSURES:
The Company adheres to the Capital Management framework which is underpinned by the following guiding principles:
(a) The key objective is to ensure that it maintains a stable capital structure with the focus on total equity to uphold
investor, creditor, and customer confidence and to ensure future development of its business.
(b) Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of the Balance
Sheet.
(c) The Company also focusses on keeping strong total equity base to ensure independence, security, as well as a high
financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.
(d) Proactively manage exposure in forex, interest and commodities to mitigate risk to earnings.
(e) The Company''s goal is to continue to be able to return excess liquidity to shareholders to distribute annual dividends in
future years.
The data required for disclosing information with regard to sensitivity analysis is not made available by the Actuary despite the
concerted attempts made by the company to gather the information in this regard and hence the information relating to sensitivity
analysis in terms of the amount of responsiveness and the financial impact consequent to change in discount rate, change in rate
of salary escalation and change in rate of employee turnover (while holding all the other factors constant), have not been provided
for during the year.
These plans typically expose the company to actuarial risks such as:
Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market
yields at the end of the reporting period on government bonds.
Interest risk:
A decrease in the bond interest rate will increase the plan liability, however, this will be partially offset by an increase in the return
on the plan debt investments.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortatility of plan
participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the
plan''s liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such,
an increase in the salary of the plan participants will increase the plan''s liability.
29. SEGMENT INFORMATION:
The Company''s operating segments are established on the basis of those components that are evaluated regularly by the Executive
Committee (the âChief Operating Decision Maker'' as defined in Ind AS 108 - âOperating Segments''), in deciding how to allocate
resources and in assessing performance. These have been identified taking into account nature of products and services, the
differing risks and returns and the internal business reporting systems.
i) Primary Segment Information:
There are no reportable segments for the year to be given under the primary segment information.
The company is essentially an Export Oriented Undertaking and makes significant exports and has availed Working Capital Loan
(Packing Credit) in Foreign currency and also imports goods, stores & spares occassionally. The Company is exposed to foreign
currency risk on these transactions. The Company follows a conservative and sound policy by entering into simple Forward
Exchange Contracts to hedge the foreign currency risk whose maturity is coterminous with the maturity period of the foreign
currency liabilities and receivables.
The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The
Company has availed significant Foreign Currency Working Capital Loan (In USD as well as Euro) by way of Packing Credit at floating
interest rates. The interest rate is at 1% (spread) plus LIBOR rate of respective Bank and the interest rate is reset based on the LIBOR
rate, as per the loan facility agreement. The Company has not entered into any of the interest rate swaps and hence, the Company is
exposed to interest rate risk.
The Company considering the economic environment in which it operates has determined the interest rate sensitivity analysis
(interest exposure) at the end of the reporting period. The interest rate for the Company are floating rates and hence, the analysis is
prepared assuming the amount of the borrowings outstanding at the end of the reporting period was outstanding for the whole year.
A 100 basis point /- fluctuation in the interest rate is used for disclosing the sensitivity analysis.
The interest rate sensitivity analysis is done holding on the assumption that all other variables remaining constant. The increase /
decrease in interest expense is mainly attributable to the Company''s exposure to interest rates on its variable rate of borrowings.
Commodity price risk:
Commodity price risk arises due to fluctuation in prices of eggs, feeds and other products. The company has a risk management
framework aimed at prudently managing the risk by reducing the external dependability and enhancement of self reliance by
manufacturing the commodities in house to the extent possible.
Credit risk is a risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due, causing
financial loss to the company. Credit risk arises from Company''s outstanding receivables from customers and other parties. The
company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. The
Company ensures that sales of products are made to customers with appropriate creditworthiness. Credit risk is controlled by
analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining
necessary approvals for credit.
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and
estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to
industries the Company deals with and the countries where it operates. In calculating expected credit loss, the company has also
considered credit reports and other related credit information for its customers to estimate the probability of default in future.
Liquidity risk arises from the company''s inability to meet its cash flow commitments on time. Prudent liquidity risk management
implies maintaining sufficient stock of cash and cash equivalents.
This has been achieved by the company by maintaining cash & cash equivalents of Rs.14,620.86 lakhs as on 31st March 2025 and
Rs.14,019.25 lakhs as on 31st March 2024
Liquidity risk is also mitigated by maintaining availability of standby funding through an adequate line up of committed credit facilities
This has been achieved by the company by availing the Packing Credit facility from the bank of Rs.7,312.28 lakhs as on 31st March
2025 and Rs.8,600.74 lakhs as on 31st March 2024
as per our report of even date FOR AND ON BEHALF OF THE BOARD
For N.C.Rajagopal & Co., SKM MAEILANANDHAN SKM SHREE SHIVKUMAR
Chartered Accountants Executive Chairman & Whole Time Director Managing Director
N.C.VIJAY KUMAR K.S.VENKATACHALAPATHY P SEKAR
Parlner Chief Financial Officer Company Secretary
MermRegPl o°003398S Membership No. : 029064 Membership No..F10744
Place : Erode
Date : 30.05.2025
Mar 31, 2024
|
2. CONTINGENT LIABILITIES & COMMITMENTS: |
'' Lakhs |
|
|
Particulars |
As at 31.03.2024 |
As at 31.03.2023 |
|
(a) Claims against the company / disputed liabilities not acknowledged as debts: i) Income Tax Liability |
364.65 |
80.66 |
|
ii) Service Tax Liability |
90.97 |
90.97 |
|
iii) Excise Duty Liability |
- |
- |
|
(b) Other money for which the Company is contingently liable: i) Liability in respect of bills discounted with banks |
1,479.32 |
2,715.28 |
No provision has been made in respect of the above demand of Income Tax, Excise Duties and Service Tax, for which the company has filed appeals with various Higher Appellate Forums, against the orders of the Lower Authorities since the company is confident of coming out successful in the Appeals as per the advice taken from the legal experts.
Depreciation has been provided under Straight Line Method on the basis of useful lives prescribed under Schedule II of the Companies Act, 2013, except for the Imported Plant & Machinery, whose useful life is different from that prescribed in Schedule II of the Companies Act, 2013 and its useful life is adopted on the basis of engineering & other expert guidance and depreciated accordingly as follows:
Imported Plant & Machinery acquired upto 31.03.2007 Useful life - 25 years
Imported Plant & Machinery acquired from 01.04.2007 to 31.03.2015 Useful life - 20 years
The recoverable amount of the CGU is determined on the basis of Fair Value less Cost of Disposal (FVLCD). The FVLCD of the CGU is determined based on the market capitalization approach, using the turnover and earnings multiples derived from observable market data. The fair value measurement is categorized as a level 3 fair value based on the inputs in the valuation techniques used.
Based on the above, no impairment was identified as of March 31, 2024 and 2023 as the recoverable value of the CGUs exceeded the carrying value. Further, none of the CGU''s tested for impairment as of March 31,2024 and 2023 were at risk of impairment. An analysis of the calculation''s sensitivity to a change in the key parameters (revenue growth, operating margin, discount rate and long-term growth rate) based on reasonably probable assumptions, did not identify any probable scenarios where the CGU''s recoverable amount would fall below its carrying amount.
Mortgage / Charge on Property, plant & equipments:
Plant & Machinery are under the first charge on account of the Term Loan with banks.
The property, plant & equipments are under the second charge for short term borrowings with banks.
The value of property, plant & equipments is disclosed net of government grants received from MOFPI (Ministry of Food Processing Industries) of Rs.488.72 Lakhs during 2018-19 to 2020-21.
The Company''s cash and cash equivalents consist of cash on hand and in banks and demand deposits with banks, which can be withdrawn at any time, without prior notice and without penalty on the principle.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, in banks, demand deposits with banks and net of outstanding bank overdrafts that are repayable on demand and are considered part of the Company''s cash management system. In the balance sheet, bank overdrafts are presented under borrowings within current liabilities.
(i) The company has one class of equity shares having par value of Rs.10 each. Each share holder is eligible for one vote per share
held and carry a right to dividend. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(ii) There are no restrictions attached to equity shares
This consists of premium realised on issue of shares and will be applied/ utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve:
General Reserve is an accumulation of retained earnings of the Company, apart from the balance in the statement of profit and loss which can be utilised for meeting future obligations.
Working Capital from banks are primarily secured by Hypothecation of stocks of Raw materials, Work-in-progress, finished goods and stores and spares, book debts, receivables, material in transit, etc. Borrowings are secured by second charge on the entire fixed assets of the company and personal guarantees of Executive Chairman and Managing director.
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 initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through Statement of Profit and Loss (''FVTPL'')) 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 and loss are recognised immediately in Statement of Profit and Loss.
Trade receivables are initially recognised when they are originated. Trade payables are in respect of the amount due on account of goods purchased or services availed in the normal course of business. They are recognised at their transaction and services availed value if the transaction do not contain significant financing component.
a) Financial Assets
(i) Recognition and initial measurement
All financial assets are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through Statement of Profit or Loss (âFVTPL)) are added to the fair value of the financial assets, on initial recognition. Transaction cost directly attributable to the acquisition of financial assets at FVTPL are recognized immediately in Statement of Profit and Loss.
(ii) Subsequent measurement Debt instruments at amortised cost:
A âdebt instrument'' is measured at the amortized cost if both the following conditions are met:
⢠The contractual terms 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.
⢠The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
⢠Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
A âdebt instrument'' is classified as FVTOCI if both of the following criteria are met:
⢠The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
⢠The asset''s contractual cash flows represent SPPI.
⢠Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI).
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as amortized cost or as FVTOCI, is classified as FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as FVTPL. However, such election is chosen only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatch'').
(iii) De-recognition of financial assets
A financial asset is de-recognised only when;
a. The entity has transferred the rights to receive cash flows from the financial asset or
b. The entity retains the contractual rights to receive the cash flows of the financial asset, but expects a contractual obligation to pay the cash flows to one or more recipients.
Where entity has transferred an asset, it examines and assesses whether it has transferred substantially all risk and rewards of ownership of financial asset. In such cases, financial asset is de-recognised. Where entity has not transferred substantially all risks and rewards of ownership of financial asset, such financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risk and rewards of ownership of the financial asset, the financial asset is de-recognised, if the Group has not retained control of the financial asset. Where the entity retains control of the financial asset is continued to be recognised to the extent of continuing involvement in the financial asset.
(iv) Investments in Equity Instruments in Subsidiary and Associates:
The Company has elected to carry investment in Equity Instruments in Subsidiary and Associates at cost in accordance with Paragraphs 10 of â Ind AS 27 - Separate Financial Statements''.
b) Financial liabilities and equity instruments
(i) Initial recognition and measurement
"All financial liabilities are recognized initially at fair value plus transaction cost (if any) that is attributable to the acquisition of the financial liabilities which is also adjusted."
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognised through the EIR amortization process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
These amounts represent liabilities for goods or services provided to the Company which are unpaid at the end of the reporting period. Trade and other payables are presented as current liabilities when the payment is due within a period of 12 months from the end of the reporting period. For all trade and other payables classified as current, the carrying amounts approximate fair value due to the short maturity of these instruments. Other payables falling due after 12 months from the end of the reporting period are presented as non-current liabilities and are measured at amortised cost unless designated at fair value through profit and loss at the inception.
Other financial liabilities at lair value through profit or loss:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading or designated as at FVTPL are recognized in the profit or loss
(iii) Derecognition of financial liabilities:
A financial liability is de-recognised 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 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 or loss.
c) Offsetting
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
d) Impairment o! Financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life time expected credit losses, if the credit risk on the financial asset has increased significantly since initial recognition.
e) Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability which are accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
The financial instruments are initially recognized and subsequently re-measured at fair value as described below :
(a) The fair value of Forward Foreign Exchange contracts is determined using forward exchange rates and yield curves at the balance sheet date.
(b) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.
(c) All foreign currency denominated assets and liabilities using exchange rate at the reporting date.
Fair Value measurement hierarchy:
The fair value of cash and cash equivalents, other bank balances, loans, trade receivables, trade payables and others approximates their carrying amount. The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The fair valuation of current investment is done by Level 1 category valuation, as the investment is quoted and has active market and the various other financial assets and liabilities are done by adopting Level 3 category valuation, as there are no observable inputs for the same.
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (derived from prices)
f) Derivative financial instruments hedge accounting
Derivative financial instruments are accounted for at FVTPL except for derivatives designated as hedging instruments in cash flow hedge relationships, which require a specific accounting treatment. To qualify for hedge accounting, the hedging relationship must meet several strict conditions with respect to documentation, probability of occurrence of the hedged transaction and hedge effectiveness. These arrangements have been entered into to mitigate currency exchange risk arising on account of repayment of foreign currency term loan and interest thereon.
The Company uses derivative financial instrument i.e. forward contracts to mitigate the risk of foreign exchange exchange rates. At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss, except for the effective portion of cash flow hedge which is recognised in Other Comprehensive Income and later to Statement of Profit and Loss when the hedged item affects profit or loss or is treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a Non-Financial Assets or Non-Financial liability.
Hedges that meet the criteria for hedge accounting are accounted for as follows:
A. Cash Flow Hedge
The Company designates derivative contracts or non-derivative Financial Assets/ Liabilities as hedging instruments to mitigate the risk of movement in interest rates and foreign exchange rates for foreign exchange exposure on highly probable future cash flows attributable to a recognised asset or liability or forecast cash transactions.
B. Fair Value Hedge
The Company designates derivative contracts or non-derivative Financial Assets/Liabilities as hedging instruments to mitigate the risk of change in fair value of hedged item due to movement in interest rates, foreign exchange rates and commodity prices.
16. CAPITAL MANAGEMENT - ADDITIONAL CAPITAL DISCLOSURES:
The Company adheres to the Capital Management framework which is underpinned by the following guiding principles:
(a) The key objective is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure future development of its business.
(b) Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of the Balance Sheet.
(c) The Company also focusses on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.
(d) Proactively manage exposure in forex, interest and commodities to mitigate risk to earnings.
(e) The Company''s goal is to continue to be able to return excess liquidity to shareholders to distribute annual dividends in future years.
This framework is adjusted based on underlying macro-economic factors affecting business environment, financial market conditions and interest rates environment.
The data required for disclosing information with regard to sensitivity analysis is not made available by the Actuary despite the concerted attempts made by the company to gather the information in this regard and hence the information relating to sensitivity analysis in terms of the amount of responsiveness and the financial impact consequent to change in discount rate, change in rate of salary escalation and change in rate of employee turnover (while holding all the other factors constant), have not been provided for during the year.
These plans typically expose the company to actuarial risks such as:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
A decrease in the bond interest rate will increase the plan liability, however, this will be partially offset by an increase in the return on the plan debt investments.
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortatility of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
29. SEGMENT INFORMATION:
The Company''s operating segments are established on the basis of those components that are evaluated regularly by the Executive Committee (the âChief Operating Decision Maker'' as defined in Ind AS 108 - âOperating Segments''), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.
i) Primary Segment Information:
The company had taken certain poultry farms and feed mills on lease and had started operating the said leased poultry farms and feedmills from the year 2020-21. Accordingly, the eggs and feeds which were purchased and sold was hitherto a trading activity. From the year 2020-21, the company uses the leased poultry farms and manufactures eggs and either sells it outside or uses the eggs as raw material for its own production. Also using the leased feedmills,the feeds are manufactured and it is either sold outside or used as raw material (food) for the birds in the poultry farm. Hence, there is no trading activity and the activity of feed manufacture and production of poultry eggs is an ancilliary and supplemental activity and also a backward integration to the company''s manufacture of various egg products. Accordingly, there are no reportable segments to be given under the primary segment information.
The company is essentially an Export Oriented Undertaking and makes significant exports and has availed Working Capital Loan (Packing Credit) in Foreign currency and also imports goods, stores & spares occassionally. The Company is exposed to foreign currency risk on these transactions. The Company follows a conservative and sound policy by entering into simple Forward Exchange Contracts to hedge the foreign currency risk whose maturity is coterminous with the maturity period of the foreign currency liabilities and receivables.
The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has availed significant Foreign Currency Working Capital Loan (In USD as well as Euro) by way of Packing Credit at floating interest rates. The interest rate is at 2% (spread) plus LIBOR rate of respective Bank and the interest rate is reset based on the LIBOR rate, as per the loan facility agreement. The Company has not entered into any of the interest rate swaps and hence, the Company is exposed to interest rate risk.
The Company considering the economic environment in which it operates has determined the interest rate sensitivity analysis (interest exposure) at the end of the reporting period. The interest rate for the Company are floating rates and hence, the analysis is prepared assuming the amount of the borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point /- fluctuation in the interest rate is used for disclosing the sensitivity analysis.
The interest rate sensitivity analysis is done holding on the assumption that all other variables remaining constant. The increase / decrease in interest expense is mainly attributable to the Company''s exposure to interest rates on its variable rate of borrowings.
Commodity price risk arises due to fluctuation in prices of eggs, feeds and other products. The company has a risk management framework aimed at prudently managing the risk by reducing the external dependability and enhancement of self reliance by manufacturing the commodities in house to the extent possible.
Credit risk is a risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due, causing financial loss to the company. Credit risk arises from Company''s outstanding receivables from customers and other parties. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. The Company ensures that sales of products are made to customers with appropriate creditworthiness. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future.
Liquidity risk arises from the company''s inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and cash equivalents. This has been achieved by the company by maintaining cash & cash equivalents of Rs.14,019.25 lakhs as on 31st March 2024 and Rs.5,826.82 lakhs as on 31st March 2023. Liquidity risk is also mitigated by maintaining availability of standby funding through an adequate line up of committed credit facilities. This has been achieved by the company by availing the F120Packing Credit facility from the bank of Rs.8,600.74 lakhs as on 31st March 2024 and Rs.6,587.70 lakhs as on 31st March 2023
Mar 31, 2023
Provisions
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Tax Expenses:
The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or equity. In which case, the tax is also recognised in other comprehensive income or equity.
Current tax:
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities based on the tax rates that are enacted or substantively enacted at the Balance Sheet date.
The current income tax expense includes income taxes payable by the Company and its branch in overseas. The current tax payable by the Company in India is the Indian income tax payable on income earned in India and from overseas branch. Current income tax payable by overseas branch of the Company is computed in accordance with the tax laws applicable in the jurisdiction in which the respective branch operates. The taxes paid are generally available for set off against the Indian income tax liability of the Company''s worldwide income.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying unit intends to settle the asset and liability on a net basis.
Deferred Tax:
Deferred tax is recognised 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 profit.
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 carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
Cash Flow Statements
Cash Flow Statement has been prepared under âIndirect Methodâ. For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, in banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand and are considered part of the Company''s cash management system. In the balance sheet, bank overdrafts are presented under borrowings within current liabilities.
Property, plant & equipment:
Property, plant & equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net changes on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset''s 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 entity and the cost can be measured reliably.
Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use are considered as pre-operative expenses and disclosed under Capital Work-in-progress
Depreciation on property, plant & equipment is provided on straight line method as per the useful life prescribed in Schedule II of the Companies Act 2013, except for imported plant & machinery for which the useful life has been taken based upon the technical evaluation by the expert committee on the useful life of the assets. In respect of assets added/adjusted during the year, depreciation is provided on pro-rata basis.
The residual values, useful lives and method of depreciation of property, plant & equipment are reviewed at each financial The residual values, useful lives and method of depreciation of property, plant & equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Gains or losses arising from derecognition of a property, plant & equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Foreign currencies transactions and translation:
Transactions in foreign currencies are recorded at the exchange rate prevailing on the dates of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting rate.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using exchange rates at the date of transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or Statement of Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively.
Employee Benefits Expense:
Short Term Employment Benefits:
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Post-Employment Benefits:
Defined Contribution Plans:
The gratuity liability amount is contributed to the gratuity fund approved by the respective IT authorities. The present value of the obligation is determined based on actuarial valuation using the Projected Unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
Defined benefit plans:
The gratuity liability amount is contributed to the gratuity fund approved by the respective IT authorities. The present value of the obligation is determined based on actuarial valuation using the Projected Unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.
Impairment of non-financial assets - property, plant and equipment:
The company assesses at each reporting date as to whether there is any indication that any property, plant and equipment or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists, the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds the recoverable amount. The recoverable amount is the higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
Events after the reporting period
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size and of nature are only disclosed.
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the company''s financial statement requires management to make judgement, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Depreciation / amortisation and useful lives of property, plant and equipment and Livestock:
Property, plant and equipment / Livestock are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for the future periods is revised if there are significant changes from previous estimates.
Recoverability of trade receivable:
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be
subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
Impairment of non-financial assets:
The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (CGU''s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a group of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
Impairment of financial assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Accounting for Government Grants and Disclosure of Government Assistance:
The Government Grants are accounted in line with IND AS 20 - "Accounting for Government Grants and Disclosure of Government Assistance".
Unfulfilled conditions and other contingencies attaching to government assistance that has been recognised - Nil.
The grant was received towards the acquisition of PPE (Property, Plant & equipments) during the years spanning from 201819 to 2020-21 and accordingly treated as a capital grant and adjusted against the cost. The value of Property, Plant & Equipments is disclosed net of government grants received from MOFPI (Ministry of Food Processing Industries) of Rs.488.72 lakhs.
APPROVAL OF FINANCIAL STATEMENTS:
The Financial Statements were approved for issue by the board of directors at their meeting held on 24.05.2023.
Ind AS - 12 - Income Taxes
Consequent to the appeal preferred by the income tax department with the Honourable ITAT, Chennai for the Assessment Year 2014-15, the appeal hitherto allowed in favour of the company by CIT(Appeals) was dismissed by the Income Tax Appelate Tribunal and verdict was pronounced in favour of the income tax department. Hence, an amount of Rs.80.66 lakhs demand (net of refund receivable) had arisen. However, the company had filed an appeal against this ITAT order with the High Court of Chennai. since the company is confident of coming out successful in the Appeals as per the advice taken from the legal experts, no provision have been made in the books for the said income tax liability and disclosed as a contingent liability.
Last year the company had informed that the carried forward losses under the Income Tax Act,1961 of the earlier assessment year A.Y2013-14 amounting to Rs.3.59 crores have been reduced by the Assessing Officer while completing the assessment by making some adjustments to the returned Loss and that the Company has preferred appeals before the immediate superior authority which appeals are pending for disposal as on the date of the financial reports and since the adjustments have resulted only in the reduction of carry forward losses, there is no immediate demand raised and hence, conservatively the said losses have not been considered while filing return of income for the relevant assessment years and that the tax impact on account of the said issue would be approximately Rs.1.20 crores. The matter is still pending before the Commissioner of Income Tax Appeals - NFAC , New Delhi for disposal.
During the financial year, a search operation was carried out by the Investigation Wing, Chennai on the Assessee. However no increiminationg materials were found as to the undisclosed income. The search related assessment is yet to commence at the Assessment Circle being the Central Circle, Salem to which office the assessment has been centralised and the assessment proceeedings are yet to commence as on the date of approval of the financial statements by the Board of Directors.
Depreciation:
Depreciation has been provided under Straight Line Method on the basis of useful lives prescribed under Schedule II of the Companies Act, 2013, except for the Imported Plant & Machinery, whose useful life is different from that prescribed in Schedule II of the Companies Act, 2013 and its useful life is adopted on the basis of engineering & other expert guidance and depreciated accordingly as follows:
Imported Plant & Machinery acquired upto 31.03.2007 Useful life - 25 years
Imported Plant & Machinery acquired from 01.04.2007 to 31.03.2015 Useful life - 20 years
Impairment of Assets :
The recoverable amount of the CGU is determined on the basis of Fair Value less Cost of Disposal (FVLCD). The FVLCD of the CGU is determined based on the market capitalization approach, using the turnover and earnings multiples derived from observable market data. The fair value measurement is categorized as a level 3 fair value based on the inputs in the valuation techniques used.
Based on the above, no impairment was identified as of March 31, 2023 and 2022 as the recoverable value of the CGUs exceeded the carrying value. Further, none of the CGU''s tested for impairment as of March 31,2023 and 2022 were at risk of impairment. An analysis of the calculation''s sensitivity to a change in the key parameters (revenue growth, operating margin, discount rate and long-term growth rate) based on reasonably probable assumptions, did not identify any probable scenarios where the CGU''s recoverable amount would fall below its carrying amount.
Mortgage / Charge on Property, plant & equipments:
Plant & Machinery are under the first charge on account of the Term Loan with banks.
The property, plant & equipments are under the second charge for short term borrowings with banks.
Government Grants:
The value of property, plant & equipments is disclosed net of government grants received from MOFPI (Ministry of Food Processing Industries) of Rs.488.72 Lakhs during 2018-19 to 2020-21.
15. 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 initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through Statement of Profit and Loss (''FVTPL'')) 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 and loss are recognised immediately in Statement of Profit and Loss.
Trade receivables are initially recognised when they are originated. Trade payables are in respect of the amount due on account of goods purchased or services availed in the normal course of business. They are recognised at their transaction and services availed value if the transaction do not contain significant financing component.
a) Financial Assets
(i) Recognition and initial measurement
All financial assets are recognized initially at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through Statement of Profit or Loss (âFVTPL)) are added to the fair value of the financial assets, on initial recognition. Transaction cost directly attributable to the acquisition of financial assets at FVTPL are recognized immediately in Statement of Profit and Loss.
(ii) Subsequent measurement Debt instruments at amortised cost:
A âdebt instrument'' is measured at the amortized cost if both the following conditions are met:
⢠The contractual terms 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.
⢠The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
⢠Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
Debt instrument at FVTOCI:
A âdebt instrument'' is classified as FVTOCI if both of the following criteria are met:
⢠The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
⢠The asset''s contractual cash flows represent SPPI.
⢠Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI).
Debt instrument at FVTPL:
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as amortized cost or as FVTOCI, is classified as FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as FVTPL. However, such election is chosen only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatch'').
(iii) De-recognition of financial assets
A financial asset is de-recognised only when;
a. The entity has transferred the rights to receive cash flows from the financial asset or
b. The entity retains the contractual rights to receive the cash flows of the financial asset, but expects a contractual obligation to pay the cash flows to one or more recipients.
Where entity has transferred an asset, it examines and assesses whether it has transferred substantially all risk and rewards of ownership of financial asset. In such cases, financial asset is de-recognised. Where entity has not transferred substantially all risks and rewards of ownership of financial asset, such financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risk and rewards of ownership of the financial asset, the financial asset is de-recognised, if the Group has not retained control of the financial asset. Where the entity retains control of the financial asset is continued to be recognised to the extent of continuing involvement in the financial asset.
(iv) Investments in Equity Instruments in Subsidiary and Associates:
The Company has elected to carry investment in Equity Instruments in Subsidiary and Associates at cost in accordance with Paragraphs 10 of â Ind AS 27 - Separate Financial Statements''.
b) Financial liabilities and equity instruments
(i) Initial recognition and measurement
"All financial liabilities are recognized initially at fair value plus transaction cost (if any) that is attributable to the acquisition of the financial liabilities which is also adjusted."
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings:
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are de-recognised through the EIR amortization process. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
Trade and other payables:
These amounts represent liabilities for goods or services provided to the Company which are unpaid at the end of the reporting period. Trade and other payables are presented as current liabilities when the payment is due within a period of 12 months from the end of the reporting period. For all trade and other payables classified as current, the carrying amounts approximate fair value due to the short maturity of these instruments. Other payables falling due after 12 months from the end of the reporting period are presented as non-current liabilities and are measured at amortised cost unless designated at fair value through profit and loss at the inception.
Other financial liabilities at fair value through profit or loss:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading or designated as at FVTPL are recognized in the profit or loss
(iii) Derecognition of financial liabilities:
A financial liability is de-recognised 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 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 or loss.
c) Offsetting
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
d) Impairment of Financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life time expected credit losses, if the credit risk on the financial asset has increased significantly since initial recognition.
e) Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability which are accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
Valuation:
The financial instruments are initially recognized and subsequently re-measured at fair value as described below :
(a) The fair value of Forward Foreign Exchange contracts is determined using forward exchange rates and yield curves at the balance sheet date.
(b) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.
(c) All foreign currency denominated assets and liabilities using exchange rate at the reporting date.
Fair Value measurement hierarchy:
The fair value of cash and cash equivalents, other bank balances, loans, trade receivables, trade payables and others approximates their carrying amount. The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The fair valuation of various financial assets are done by adopting Level 3 category valuation.
f) Derivative financial instruments
Derivative financial instruments are accounted for at FVTPL except for derivatives designated as hedging instruments in cash flow hedge relationships, which require a specific accounting treatment. To qualify for hedge accounting, the hedging relationship must meet several strict conditions with respect to documentation, probability of occurrence of the hedged transaction and hedge effectiveness. These arrangements have been entered into to mitigate currency exchange risk arising on account of repayment of foreign currency term loan and interest thereon.
16. CAPITAL MANAGEMENT - ADDITIONAL CAPITAL DISCLOSURES:
The Company adheres to the Capital Management framework which is underpinned by the following guiding principles:
(a) The key objective is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure future development of its business.
(b) Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of the Balance Sheet.
(c) The Company also focusses on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.
(d) Proactively manage exposure in forex, interest and commodities to mitigate risk to earnings.
(e) The Company''s goal is to continue to be able to return excess liquidity to shareholders to distribute annual dividends in future years.
The data required for disclosing information with regard to sensitivity analysis is not made available by the Actuary despite the concerted attempts made by the company to gather the information in this regard and hence the information relating to sensitivity analysis in terms of the amount of responsiveness and the financial impact consequent to change in discount rate, change in rate of salary escalation and change in rate of employee turnover (while holding all the other factors constant), have not been provided for during the year.
These plans typically expose the company to actuarial risks such as:
Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
Interest risk:
A decrease in the bond interest rate will increase the plan liability, however, this will be partially offset by an increase in the return on the plan debt investments.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortatility of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
29. SEGMENT INFORMATION:
The Company''s operating segments are established on the basis of those components that are evaluated regularly by the Executive Committee (the âChief Operating Decision Maker'' as defined in Ind AS 108 - âOperating Segments''), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.
i) Primary Segment Information:
The company is engaged in the manufacturing and marketing of various egg based products in powder and liquid form and eggs. The company also operates certain poultry farms for the production of eggs. Also the company has certain feedmills for manufacturing the poultry feeds which serves as a food for the poultry birds reared in the poultry farms for production of eggs. The said poultry farms and feedmills are operated as a backward integration for supplementing the manfacturing activity and does not constitute exclusive and independent segments or divisions. Hence, the companies business activities involve one business which is the manufacturing and marketing of egg products and eggs. Accordingly, there are no reportable segments to be given under the primary segment information.
The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has availed significant Foreign Currency Working Capital Loan (In USD as well as Euro) by way of Packing Credit at floating interest rates. The interest rate is at 2% (spread) plus LIBOR rate of respective Bank and the interest rate is reset based on the LIBOR rate, as per the loan facility agreement. The Company has not entered into any of the interest rate swaps and hence, the Company is exposed to interest rate risk.
The Company considering the economic environment in which it operates has determined the interest rate sensitivity analysis (interest exposure) at the end of the reporting period. The interest rate for the Company are floating rates and hence, the analysis is prepared assuming the amount of the borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point /- fluctuation in the interest rate is used for disclosing the sensitivity analysis.
The interest rate sensitivity analysis is done holding on the assumption that all other variables remaining constant. The increase / decrease in interest expense is mainly attributable to the Company''s exposure to interest rates on its variable rate of borrowings.
Commodity price risk:
Commodity price risk arises due to fluctuation in prices of eggs, feeds and other products. The company has a risk management framework aimed at prudently managing the risk by reducing the external dependability and enhancement of self reliance by manufacturing the commodities in house to the extent possible.
Credit risk is a risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due, causing financial loss to the company. Credit risk arises from Company''s outstanding receivables from customers and other parties. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. The Company ensures that sales of products are made to customers with appropriate creditworthiness. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the company has also considered credit reports and other related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID-19.
Liquidity risk arises from the company''s inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and cash equivalents. This has been achieved by the company by maintaining cash & cash equivalents of Rs.5,826.82 lakhs as on 31st March 2023 and Rs.1,768.40 lakhs as on 31st March 2022. Liquidity risk is also mitigated by maintaining availability of standby funding through an adequate line up of committed credit facilities. This has been achieved by the company by availing the Packing Credit facility from the bank of Rs.6,587.70 lakhs as on 31st March 2023 and Rs.7,282.35 lakhs as on 31st March 2022.
For N.C.Rajagopal & Co., SKM MAEILANANDAN SKM SHREE SHIVKUMAR
Chartered Accountants Executive Chairman & Whole Time Director Managing Director
N.C.VIJAY KUMAR K.S.VENKATACHALAPATHY P SEKAR
Partner Chief Financial Officer Company Secretary
Membership No. : 208276 Membership No. : 029064 Membership No..F10744
Firm Reg. No.: 003398S
Place : Erode Date : 24.05.2023
For N.C.Rajagopal & Co., SKM MAEILANANDAN SKM SHREE SHIVKUMAR
Chartered Accountants Executive Chairman & Whole Time Director Managing Director
N.C.VIJAY KUMAR K.S.VENKATACHALAPATHY P SEKAR
P.artner Chief Financial Officer Company Secretary
MermRegft o°003398S Membership No. : 029064 Membership No..F10744
Place : Erode Date : 24.05.2023
Mar 31, 2018
15.CAPITAL MANAGEMENT - ADDITIONAL CAPITAL DISCLOSURES:
The Company adheres to the Capital Management framework which is underpinned by the following guiding principles:
(a) The key objective is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor, and customer confidence and to ensure future development of its business.
(b) Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of the Balance Sheet.
(c) The Company also focusses on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required without impacting the risk profile of the Company.
(d) Proactively manage exposure in forex, interest and commodities to mitigate risk to earnings.
(e) The Company''s goal is to continue to be able to return excess liquidity to shareholders to distribute annual dividends in future years.
This framework is adjusted based on underlying macro-economic factors affecting business environment, financial market conditions and interest rates environment.
16.FINANCIAL INSTRUMENTS:
Valuation:
The financial instruments are initially recognized and subsequently re-measured at fair value as described below :
(a) The fair value of Forward Foreign Exchange contracts is determined using forward exchange rates and yield curves at the balance sheet date.
(b) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.
(c) All foreign currency denominated assets and liabilities using exchange rate at the reporting date.
Fair Value measurement hierarchy:
The fair value of cash and cash equivalents, other bank balances, loans, trade receivables, trade payables and others approximates their carrying amount. The company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques. The fair valuation of various financial assets are done by adopting Level 3 category valuation.
Level 1 :
Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2 :
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (derived from prices)
Level 3 :
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The data required for disclosing information with regard to sensitivity analysis is not made available by the Actuary despite the concerted attempts made by the company to gather the information in this regard and hence the information relating to sensitivity analysis in terms of the amount of responsiveness and the financial impact consequent to change in discount rate, change in rate of salary escalation and change in rate of employee turnover (while holding all the other factors constant), have not been provided for during the year.
These plans typically expose the company to actuarial risks such as:
Investment risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
Interest risk:
A decrease in the bond interest rate will increase the plan liability, however, this will be partially offset by an increase in the return on the plan debt investments.
Longevity risk:
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk:
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
The company has one customer individually accounted for more than 10% of the total revenue amounting to approximately Rs.66 crores for the year 2017-18 and Rs.63 crores for the year 2016-17 respectively.
The interest rate sensitivity analysis is done holding on the assumption that all other variables remaining constant. The increase / decrease in interest expense is mainly attributable to the Company''s exposure to interest rates on its variable rate of borrowings.
32(iii) Commodity price risk:
Commodity price risk arises due to fluctuation in prices of eggs, feeds and other products. The company has a risk management framework aimed at prudently managing the risk by reducing the external dependability and enhancement of self reliance by manufacturing the commodities in house to the extent possible.
32(iv) Credit risk:
Credit risk is a risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due, causing financial loss to the company. Credit risk arises from Company''s outstanding receivables from customers and other parties. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities.
32(v) Liquidity risk:
Liquidity risk arises from the company''s inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient stock of cash and cash equivalents (Rs.19.99 crores as on 31st March 2018) & (Rs.17.11 crores as on 31st March 2017) and maintaining availability of standby funding through an adequate line up of committed credit facilities (Rs.43.72 crores as on 31st March 2018) & (Rs.43.07 crores as on 31st March 2017).
Mar 31, 2016
i. Previous year figures are regrouped, rearranged and reclassified wherever necessary to facilitate comparison with current year''s figures and figures have been rounded off to nearest rupee.
ii. Contingent Liability:
(a) Export Bills discounted with the State Bank of India, Commercial Branch, Erode Rs. 2141.66 Lacs. (Previous year Rs. 2114.84 Lacs).
(b) Income Tax Liability Rs.395.63 lacs (Net of recovery and Payments) (Previous year 492.81 lacs).
(c) Service Tax Liability Rs.44.38 Lacs (Previous year Rs.41.25 Lacs).
(d) Excise Duty Liability Rs.24.13 Lacs (Previous year Rs.32.48 Lacs).
(e) The company is in dispute with its bank (State Bank of India) regarding the claim made as "Right of Recompense (ROR)". The amount involved could not be quantified as there is a dispute in quantification of liability itself between the bank (State Bank of India) and the company. There is also dispute concerning the admission of liability by the company and the company is making best efforts to rebut the Right of Recompense (ROR) claim made by the bank towards the company. Hence, no provision has been made in the books for the items referred to in item no.(b) to (d) refer note no.2 (vii).
iii. Balances of Sundry creditors and Sundry debtors are subject to confirmation.
The company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium enterprises development Act, 2006 (The Act) and hence disclosure regarding:
I) Amount due and outstanding to suppliers as at the end of the accounting year.
ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year.
iv) "Interest accrued and unpaid at the end of the accounting year, have not been provided."
The company is making efforts to get the confirmations from the suppliers as regards their status under the Act.
vi. Provision for Income Tax :
Provision had been made in respect of Income Tax liability arising under the Normal Provisions of the Income Tax Act, 1961, since the tax liability when computed in accordance with the Provisions of MAT under section 115JB of the Income Tax Act, 1961 is higher than the book profits. Excess tax amount paid over the tax paid/payable under normal provisions of the Income Tax Act during the yester years, if any, constitutes MAT credit and the same has been taken credit and set off against the provision for taxation made during the year.
vii. No provision has been made in respect of demand of Excise Duties Rs.24.13 lacs and Service Tax of Rs.44.38 Lacs, for which the company has filed appeals with various Higher Appellate Forums, against the orders of the Lower Authorities since the company is confident of coming out successful in the Appeals as per the advice taken from the legal experts. Similarly there are Income Tax Demands totaling to the tune of of Rs.395.63 lacs i.e for the Assessment year 2008-2009 (Rs.244.15 Lacs - Net of Recovery) and 2009-2010 (Rs.151.48 Lacs Net of Part Payment and payments in installments). Based on the decisions of Appellate Authorities and the interpretations of other relevant provisions, the company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made for the balance amount net of payments.
The carried forward losses under the Income Tax Act,1961 of the earlier assessment years has been reduced by the Assessing Officer while completing the assessment for the A.Y2011-12 and A.Y 12-13 by making some adjustments to the returned Loss. The Company has preferred appeals before the immediate superior authority which appeal is pending for disposal as on the date of the financial reports. Since the adjustments have resulted only in the reduction of carry forward losses, there is no immediate demand raised for the relevant assessment years, but the adjustments have an impact on the availability of Future MAT credit to the extent of Rs.1.55 Crores which has been considered while making provision for Income Tax for the current year on conservative basis. The MAT Credits available in the Books of Accounts will be suitably dealt with on the outcome of the appellate decisions.
viii. There are no impairment of assets in terms of Accounting Standard No.28 issued by The Institute of Chartered Accountants of India. The Company had disposed some of the assets during the current financial year which has been suitably recognized / dealt with in the financial statements in accordance with the Accounting Standard No.10 issued by the Institute of Chartered Accountants of India.
The Company made annual Contributions to the LIC of an amount advised by the LIC. The Company was not informed by LIC of the investments made by the LIC or the Break-down of plan assets by investment type.
xiii. Poultry Division :
All the consumption of Feeds, Drugs, Vaccines and Medicines up to the grower stage are being added on the value of birds and shown as âValue of Livestockâ under the head Inventories in the Balance Sheet.
The Cost of Birds thus arrived at is being amortized over remaining life time of the Birds and is recognized in the Profit and loss account.
The remaining unamortized value of the Birds is shown as âUnamortized Value of Live Stockâ under the head Other Current Assets in the Balance Sheet.
xiv. CSR Expenditure :
The company during the year has incurred an expenditure to the extent of Rs.30.67 lacs towards CSR expenditure and has contributed towards the CSR Related Activities, details of which have been furnished separately. The company has complied with the CSR Provisions as envisaged under Section 135 of the Companies Act, 2013.
XV. Foreign Exchange Fluctuation - Net :
The net Foreign exchange fluctuation difference of Rs.504.91 lacs has been disclosed under the head "Other Income" instead of the head "Finance charges" as required by Schedule III of the Companies Act 2013 and hence the figures disclosed under both the heads are to be read taking into consideration of the above fact. However there is no impact on the profit or loss for the year.
XVI. Details Of Loans Given, Investments Made And Guarantee Given Covered Under Section 186(4) of The Companies Act 2013
I) Loans Given Nil
ii) Investments Made Disclosed under Respective Heads
iii) Corporated Guarantees Nil
Mar 31, 2015
WORKING CAPITAL FINANCE FROM SBI ARE SECURED BY
a) Hypothecation of stocks consisting of Raw materials, semi finished
goods, finished goods and stores and spares and other current assets of
the company.
b) Personal guarantees of Executive Chairman and Managing director.
c) Second charge on the entire fixed assets of the company.
d) SBI - Pledge of shares 33,72,752 Nos of the company held by the
Managing Director.
I) Previous year figures are regrouped, rearranged and reclassified
wherever necessary to facilitate comparison with current year's figures
and figures have been rounded off to nearest rupee.
II) ContingentLiability:
i) Export Bills discounted with the State Bank of India, Commercial
Branch, Erode Rs. 2114.84 Lacs. (Previous year Rs. 2085.65 Lacs).
ii) Income Tax Liability Rs. 492.81 lacs (Net of recovery and Payments)
(Previous year 552.81 lacs).
iii) Service Tax Liability Rs.41.25 Lacs (Previous year Rs.39.62 Lacs).
iv) Excise Duty Liability Rs.32.48 Lacs (Previous year Rs.27.17
Lacs).for the items referred to in item no.(b) to (d) refer note no.2
(vii).
III) Balances of Sundry creditors and Sundry debtors are subject to
confirmation.
The company has not received any intimation from the suppliers
regarding status under the Micro, Small and Medium ienterprises
development Act, 2006 (The Act) and hence disclosure regarding I)Amount
due and outstanding to suppliers as at the end of the accounting year.
ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year.
iv) Interest accrued and unpaid at the end of the accounting year, have
not been provided.
The company is making efforts to get the confirmations from the
suppliers as regards their status under the Act.
IV) Disclosure of Related Party transactions, as required under
Accounting Standard (AS) 18 of the Companies (Accounting Standards)
Rules, 2006
(a) Name of the Related PartiesI)
i) SKM Animal Feeds and Foods (India) Limited
ii) SKM Siddha and Ayurvedha Company (India) Limited
iii) SKM Universal Marketing Company India Ltd
iv) SKM Shree Shivkumar
v) Sri.SKM Maeilanandhan
vi) SKM Europe BV,Utrecht,The Netherlands
(b) Description of relationship between the parties :
I)SKM Animal Feeds and Foods (India) Limited Common Directors
ii) SKM Siddha and Ayurvedha Company (India) Limited Common Managing
Director
iii) SKM Universal Marketing Company India Ltd Common Directors
iv) SKM Shree Shivkumar Managing Director
v) Sri.SKM Maeilanandhan Whole time Director
vi) SKM Europe BV,Utrecht,The Netherlands Subsidiary Company
VI. Provision for Income Tax
Provision had been made in respect of Income Tax liablility arising
under the provisions of MAT under section 115JB of the Income Tax Act,
1961, since the tax liability when computed in accordance with the
Normal Provisions of the Income Tax Act, 1961 is lesser than the book
profits. Excess tax amount paid/payable over the tax paid/payable under
normal provisions of the Income Tax Act constitutes MAT credit and is
thus recognised as an asset in the balance sheet, since the asset can
be measured reliably and it is probable that the future economic
benefit associated with the asset will fructify
VII. No provision has been made in respect of demand of Excise Duties
Rs.32.48 lacs and Service Tax of Rs.41.25 Lacs, for which the company
has filed appeals with various Higher Appellate Forums, against the
orders of the Lower Authorities since the company is confident of
coming out successful in the Appeals as per the advice taken from the
legal experts. Similarly there are Income Tax Demands totalling to the
tune of of Rs.492.81 lacs i.e for the Assessment year 2008-2009
(Rs.270.07 Lacs - Net of Recovery) and 2009-2010 (Rs.222.74 Lacs Net of
Part Payment and payments in instalments). Based on the decisions of
Appellate Authorities and the interpretations of other relevant
provisions, the company has been legally advised that the demand is
likely to be either deleted or substantially reduced and accordingly no
provision has been made for the balance amount net of payments.
The carried forward losses under the Income Tax Act,1961 of the earlier
assessment years has been reduced by the Assessing Officer while
completing the assessment for the A.Y.2011-12 vide his order under
section 143(3) of the Income Tax Act, 1961 dated 31.03.2015 by making
some adjustments by way of disallowances of expenses against which the
company has preferred an appeal before the immediate superior authority
which appeal is pending for disposal as on the date of the financial
reports. Since the adjustment has resulted only in the reduction of
carry forward losses, there is no immediate demand raised for the
relevant assessment year, but the adjustments have an impact on the
availability of Future MAT credit of Rs.97.81 lacs
VIII. There are no impairment of assets in terms of Accounting Standard
No.28 issued by The Institute of Chartered Accountants of India. The
Company had disposed some of the assets during the current fnancial
year which has been suitablly recognised / dealt with in the financial
statements in accordance with the Accounting Standard No.10 issued by
the Institute of Chartered Accountants of India.
XI. FOB Value of goods exported Rs.25,396 Lacs (Previous Year Rs.21,214
Lacs)
The Company made annual Contributions to the LIC of an amount advised
by the LIC. The Company was not informed by LIC of the investments made
by the LIC or the Break-down of plan assets by investment type.
XIII. Poultry Division
All the consumption of Feeds, Drugs, Vaccines and Medicines upto the
grower stage are being added on the value of birds and shown as
"Value of Livestock" under inventory in the Balance Sheet.
The Cost of Birds thus arrived at is being amortised over remaining
life time of the Birds and is recognized in the Profit and loss
account.
The remaining unamortized value of the Birds is shown as "Unamortised
Value of Live Stock" under the head under inventory in the Balance
Sheet.
XIV. CSR Expenditure:
Though the company's net profit had exceeded Rs.5 crores and provisions
of Corporate Social Responsibility are attracted, the average net
profits of the company is in negative when computed for the three
immediately preceding financial years and hence, for the current
financial year, there is no obligation on the part of the company to
incur Expenditures on account of CSR Related Activities for the year.
XV Foreign Exchange Fluctuation - Net:
The net foreign exchange fluctuation difference of Rs.930.26 lacs has
been disclosed under the head "Other Income" instead of the head
"Finance charges" as required by Schedule III of the Companies Act 2013
and hence the figures disclosed under both the heads are to be read
taking into consideration of the above fact. However there is no impact
on the profit or loss for the year.
XVI. Details Of Loans Given, Investments Made And Guarantee Given
Covered Under Section 186(4) of The Companies Act 2013
I)Loans Given Nil
ii) Investements Made Disclosed under Respective Heads
iii) Corporated Guarantees Nil
Mar 31, 2014
1. Previous year figures are regrouped, rearranged and reclassified
wherever necessary to facilitate comparison with currentyear sfigures
and figures have been rounded offto nearest rupee.
2. Contingent Liability
i) Export Bills discounted with the State Bank of India, Commercial
Branch, Erode Rs. 2085.65 Lacs. (Previous year Rs. 2464.11 Lacs).
ii) Income Tax Liability Rs. 552.81 lacs (Net of recovery and Payments)
(Previous year Rs.359.06 lacs).
iii) Service Tax Liability Rs.39.62 Lacs (Previous year Rs.39.62 Lacs).
iv) Excise Duty Liability Rs.27.17 Lacs (Previous year Rs.14.53 Lacs).
forthe items referred to in item no. (ii) to (iv) refer note no.27.
3. Balances of Sundry creditors and Sundry debtors are subject to
confirmation.
The company has not received any intimation from the suppliers
regarding status under the Micro, Small and Medium enterprises
development Act, 2006 (The Act) and hence disclosure regarding:
i) Amount due and outstanding to suppliers as at the end of the
accounting year.
ii) Interest paid during the year.
iii) Interest payable atthe end of the accounting year.
iv) Interest accrued and unpaid atthe end of the accounting year, have
not been provided.
The company is making efforts to getthe confirmations from the
suppliers as regards their status underthe Act.
4. Disclosure of Related Party transactions, as required under
Accounting Standard (AS) 18 of the Companies (Accounting Standards)
Rules, 2006.
(a) Name ofthe Related Parties
i) SKM Animal Feeds and Foods (India) Limited
ii) SKM Universal Marketing Company India Ltd.
iii) SKM Meailanandhan (Excutive Chairman) - Key Managerial Person
iv) SKM Shree Shivkumar (Managing Director) - Key Managerial Person
v) SKM Europe BV,Utrecht, The Netherlands
(b) Description of relationship between the parties Presumption of
significance influence
(c) Transaction Details
i. Sale of Egg Shell waste to SKM Animal Feeds and Foods (India)
Limited Rs.20.88/- Lacs (Tonnage 911.70 Tons)
5. Provision for Income Tax
Provision had been made in respect of Income Tax liablility arising
under the provisions of MAT under section 115 JB of the Income Tax Act
1961 and there is no tax liability when computed in accordance with the
Normal Provisions of the Income Tax Act 1961 because of the
availability of benefit of set off of brought forward losses of the
earlier years. MAT thus paid/payable is recognised as an asset in the
balance sheet since the asset can be measured reliably and it is
probable that the future economic benefit associated with the asset will
fructify.
7. No provision has been made in respect of demand of excise duties
Rs.27.17 lacs and Service Tax of Rs.39.62 Lacs, for which the company
has filed appeals with various Higher Appellate Forums, against the
orders of the Lower Authorities and the company is confident of coming
out successful in the Appeals. Similarly there are Income Tax Demands
totalling to the tune of of Rs.552.81 lacs i.e for the Assessment year
2008-2009 (Rs.270.07 Lacs - Net of Recovery) and 2009-2010 (Rs.282.74
Lacs Net of Part Payment). Based on the decisions of Appellate
Authorities and the interpretations of other relevant provisions, the
company has been legally advised that the demand is likely to be either
deleted or substantially reduced and accordingly no provision has been
made.
8. There are no impairment of assets in terms of Accounting Standard
No.28 issued by The Institute of Chartered Accountants of India. The
Company had disposed some of the assets during the current financial
year which has been suitably recognised / Deal with in the financial
statements in accordance with the Accounting Standard No.10 issued by
the Institute of Chartered Accountants of India.
9. FOB Value of goods exported Rs.21,214 Lacs (Previous Year Rs.16,801
Lacs)
10. During the year the company has recognized the following amounts in
the Profit and Loss Account:
The Company made annual Contributions to the LIC of an amount advised
by the LIC. The Company was not informed by LIC of the investments made
by the LIC or the Break-down of plan assets by investment type.
11. Poultry Division
All the consumption of Feeds, Drugs, Vaccines and Medicines upto the
growerstage are being added on the value of birds and shown as Value of
Livestock under thefixed assets in the Balance Sheet.
The Cost of Birds thus arrived at is being amortised over remaining
life time of the Birds and is recognized in the Profit and loss
account.
The remaining unamortized value of the Birds is shown as Unamortised
Value of Live Stock under the head Other Current Assets in the Balance
Sheet.
Mar 31, 2013
1. Previous year figures are regrouped, rearranged and reclassified
wherever necessary to facilitate comparison with current year''s figures
and figures have been rounded off to nearest rupee.
2. Contingent Liability:
i) Export Bills discounted with the State Bank of India, Commercial
Branch, Erode Rs. 2464.11 Lacs. (Previous year Rs. 2092.58 Lacs).
ii) Income Tax Liability Rs. 359.06 lacs (net of recovery) (Previous
year Rs.359.06 lacs). iii) Service Tax Liability Rs.39.62 Lacs
(Previous year Rs.35.19 Lacs).
iv) Excise Duty Liability Rs.14.53 Lacs (Previous year Rs.9.55 Lacs).
for the items referred to in item no. (ii) to (iv) refer note no.26.
3. Balances of Sundry creditors and Sundry debtors are subject to
confirmation.
The company has not received any intimation from the suppliers
regarding status under the Micro, Small and Medium enterprises
development Act, 2006 (The Act) and hence disclosure regarding: i)
Amount due and outstanding to suppliers as at the end of the accounting
year. ii) Interest paid during the year.
iii) Interest payable at the end of the accounting year.
iv) Interest accrued and unpaid at the end of the accounting year, have
not been provided.
The company is making efforts to get the confirmations from the
suppliers as regards their status under the Act.
4. Disclosure of Related Party transactions, as required under
Accounting Standard (AS) 18 of the Companies (Accounting Standards)
Rules, 2006
(a) Name of the Related Parties
i) SKM Animal Feeds and Foods (India) Limited
ii) SKM Universal Marketing Company India Limited
iii) SKM Shree Shivkumar ( Managing Director) - Key Managerial Person
iv) Sri.SKM Meailanandhan (Excutive Chairman) - Key Managerial Person
(b) Description of relationship between the parties :
Presumption of significance influence
(c) Transaction details :
i. Sale of Egg Shell waste to SKM Animal Feeds and Foods (India)
Limited  Rs.25.05/- Lacs (Tonnage 1164.85 Tons)
ii. Details of Loans Borrowed, Repayments and Interest Payments
(Amount in Rs.)
iv. Rent Paid to Managing Director, Rs. 76,500/- v. Lease Rent
received from SKM Universal Marketing Company India Limited Rs.6 lacs
(Net of VAT and Service Tax).
The Executive Chairman and Managing Director''s remuneration is covered
under part II of Schedule XIII of the Companies Act, 1956.
5. Provision for Income Tax :
Provision had been made in respect of Income Tax liablility arising
under the provisions of MAT under section 115 JB of the Income Tax Act
1961 and there is no tax liability when computed in accordance with the
Normal Provisions of the Income Tax Act 1961 because of the
availability of benefit of set off of brought forward losses of the
earlier years. MAT thus paid/payable is recognised as an asset in the
balance sheet since the asset can be measured reliably and it is
probable that the future economic benefit associated with the asset
will fructify.
6. No provision has been made in respect of demand of Excise Duties
Rs.14.53 lacs and Service Tax of Rs.39.62 Lacs, for which the company
has filed appeals with various Higher Appellate Forums, against the
orders of the Lower Authorities and the company is confident of coming
out successful in the Appeals. Similarly there are Income Tax Demands
of Rs.4.29/- crores for the Assessment years 2007-2008 (Rs.88.98 Lacs),
2008-2009 (Rs.270 Lacs - Net of Recovery) and 2009-2010 (Rs.302.74 Lacs
- Demand raised after the end of the financial year). Based on the
decisions of Appellate Authorities and the interpretations of other
relevant provisions, the company has been legally advised that the
demand is likely to be either deleted or substantially reduced and
accordingly no provision has been made. (For the demand for the
Asst.year 2008-09 the Income Tax department has recovered taxes to the
extent of Rs.70.07 lakhs through seperate proceedings) (Seperate stay
proceedings in respect of the above demands are pending before varies
judicial authorities).
7. There are no impairment of assets in terms of Accounting Standard
No.28 issued by The Institute of Chartered Accountants of India. The
Company had disposed some of the assets in the subsequent financial
year which will be suitablly recognised/Deal with in the financial
statements of the subsequent year in accordance with the Accounting
Standard No.10 issued by the Institute of Chartered Accountants of
India.
The Company made annual Contributions to the LIC of an amount advised
by the LIC. The Company was not informed by LIC of the investments made
by the LIC or the Break-down of plan assets by investment type.
8. Poultry Division:
All the consumption of Feeds, Drugs, Vaccines and Medicines upto the
grower stage are being added on the value of birds and shown as "Value
of Livestock" under the fixed assets in the Balance Sheet.
The Cost of Birds thus arrived at is being amortised over remaining
life time of the Birds and is recognized in the Profit and loss
account.
The remaining unamortized value of the Birds is shown as "Unamortised
Value of Live Stock" under the other Current Assets in the Balance
Sheet.
Mar 31, 2010
1. Previous year figures are regrouped, rearranged and reclassified
wherever necessary to facilitate comparison with current years figures
and figures have been rounded off to nearest rupee.
2. Contingent Liability :
a. Export Bills discounted with the State Bank of India, Commercial
Branch, Erode Rs. 2,093.31Lacs. (Previous year Rs. 1,477.44Lacs).
b. Income Tax Liability Rs.43.76 Lacs
c. Service Tax Liability Rs.34.21 Lacs
d. Excise Duty Liability Rs.4.20 Lacs
3. Balances of Sundry creditors and Sundry debtors are subject to
confirmation.
The company has not received any intimation from the suppliers
regarding status under the Micro, Small and Medium enterprises
development Act, 2006 (The Act) and hence disclosure regarding:
a) Amount due and Outstanding to suppliers as at the end of the
accounting year.
b) Interest paid during the year.
c) Interest payable at the end of the accounting year.
d) Interest accrued and unpaid at the end of the accounting year, have
not been provided.
The company is making efforts to get the confirmations from the
suppliers as regards their status under the Act.
4. Additional Information pursuant to the provisions of paragraph (4D)
of part à II of schedule VI to Companies Act, 1956 :
I. Details of Licensed Capacity, installed capacity.
a. Licensed Capacity not applicable.
b. Installed Capacity 6,300 Metric Tonnes per annum.
5. Related Party Disclosures:
i. Sale of Egg Shell grits to SKM Animal Fees and Foods (India) Limited
à Rs.10.15 lacs. (Tonnage 1,083.815 Tons)
ii. Loan received from SKM Universal Marketing co.(India) Ltd., Rs.2.49
crores (Balance payable as on 31.03.2010, Rs. 2.49 crores)
iii. Loan received from Managing Director during the year Rs.4.30
crores (Opening Balance Rs.3.39 crores) and repayment made during the
year Rs.6.78 Crores (Balance payable as on 31.03.2010, Rs.90.89 lacs)
iv. Interest paid to Universal Marketing, Rs.5.46 lacs for the year
2009-2010
v. Interest paid to Managing Director, Rs.25.03 lacs.
vi. Energy Consumed (Electricity) from SKM Siddha & Ayurvedic Medicines
India Pvt. Limited - Rs.6.36 lacs and Honey purchased Rs.44,554/-
(200gms 504 bottle, 100gms 504 bottle, 50gms 504 bottle).
vii. Purchase of Feeds from SKM Animal Feeds and Foods (India) Limited
during the year amounting to Rs. 05.10 Crores (Tonnage: 3,891 Tonnes)
and Purchased DOB for Rs.19,580/- (3.04 Tonnes).
Description of the Relationship Between the Parties à Presumption of
significant influence
6. Loans and Advances includes advance of Rs. 1.86/- Crores (Last Year
- Rs.1.69 Crores) to subsidiary company of SKM Europe BV, the
Netherlands.
7. Provision for Income Tax, Fringe Benefit Tax and Deferred Tax
Liability:
Income Tax:
Provision has been made in respect of Income Tax Liability under the
Provisions of Section 115 JB (Minimum Alternate Tax) of the Income Tax
Act 1961, since there is no Tax liability under the normal provisions
of the Income Tax Act 1961, in view of the fact that the companys
income when computed in accordance with the normal provisions of the
Income Tax Act 1961 is less than 10% of the Book Profits of the Company
because of the higher rate of Depreciation provided at rates specified
in the Income Tax Act 1961. The Provision thus made for MAT Liability
for the current year as well as for the earlier years have been
transferred to MAT Credit Entitlement Account shown under the Current
Assets in the Balance sheet, since the company is entitled to adjust
the asset against the future Tax Liability.
8. No provision has been made in respect of demand of Excise Duties
of Rs.4.20 Lacs and Service Tax of Rs.34.21 Lacs, for which the company
has filed appeals with various Higher Appellate Forums, against the
orders of the Lower Authorities and the company is confident of coming
out successful in the Appeals. Similarly no provision has been made in
respect of Income Tax Liability of Rs.43.76/ - for the Assessment years
2004-2005 and 2007-2008 since appeals have been filed against the order
of the Assessing Officer with the Honourable Commissioner of Income
Tax, Appeals à II, Coimbatore and the company is confident that the
appeals would be decided in favour of the company.
9. The Cess specified under Sub-Section (2) of Section 441A of the
Companies Act 1956, has not been provided for nor paid, in view of the
rate and manner of payment having not yet been notified by the Central
Government.
10. There are no impairment of assets in terms of Accounting Standard
No.28 issued by The Institute of Chartered Accountants of India.
11. Financial and Derivative Instruments:
a. Nominal amount of Derivative contracts entered into by the Company
for hedging currency and outstanding as on 31st March 2010 amounts to
Rs.28,97,03,790/- (Previous Year à 7,14,18,666/-) 41
b. Financial and Derivative contracts entered into by the company
during the year are for only for hedging purposes.
c. Foreign Currency exposure that are not hedged by derivative or
forward contracts as on 31st March 2010 amounts to Rs.Nil (Previous
Year Rs.27,86,850/-)
d. During the year company not entered in any contract for
Speculation.
12. Poultry Division:
All the Consumption of Feeds, Drugs and Vaccines and Medicines up to
the Grower Stage were added with the cost of Birds and shown as ÃValue
of Live Stockà under the Fixed Assets in the Balance Sheet.
The Cost of Birds thus arrived at is being amortised over remaining
life time of the Birds and is recognized in the Profit and loss
account.
The remaining unamortized value of the Birds is shown as "Unamortised
Value of Live Stock" under the Current Assets in the Balance Sheet.
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SKM Egg Products Export (India) Ltd. Tools
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SKM Egg Products Export (India) Ltd. Company Details
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SKM Egg Products Export (India) Ltd. Key Financial Ratios
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SKM Egg Products Export (India) Ltd. Results
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SKM Egg Products Export (India) Ltd. Financial Data
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-
SKM Egg Products Export (India) Ltd. Reports
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- Auditors Report
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SKM Egg Products Export (India) Ltd. Corporate Announcements
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