Mar 31, 2018
1. Corporate Information
DCM Shriram Industries Limited (the âCompanyâ) is a Public Limited Listed Company incorporated in India and having its registered office at Kanchenjunga Building, 6th Floor, 18, Barakhamba Road, New Delhi - 110001. The Company is primarily engaged in production and sale of sugar, alcohol, power, chemicals and industrial fibers.
2 Basis of preparation of financial statements
a) Statement of Compliance
These Standalone Ind AS Financial Statements (âStandalone Financial Statementsâ) of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of Companies Act, 2013, (the âActâ), Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act, as applicable.
For all the periods up to and including March 31, 2017, these Standalone Financial Statements were prepared in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act (âPrevious GAAPâ). As these Standalone Financial Statements for the year ended March 31, 2018 are the Companyâs first standalone financial statements prepared in accordance with Ind AS, Ind AS 101, First time adoption of Indian Accounting standards has been applied. An explanation of how the transition to Ind AS has effected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 48.
These Standalone Financial Statements of the Company for the year ended March 31, 2018 are approved by the Companyâs Audit Committee and by the Board of Directors on May 29, 2018.
b) Functional and presentation currency
These standalone financial statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency. All amounts are in rupees lakhs with two decimel points rounded off to the nearest thousands, unless otherwise stated.
c) Basis of measurement
The standalone financial statements have been prepared on a historical cost basis, except for the following items:
d) Critical accounting estimates and judgements
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively. In particular, information about significant areas of estimation/ uncertainty and judgements in applying accounting policies that have the most significant effects on the standalone financial statements are included in the following notes:
- Recognition and estimation of tax expense including deferred tax- Note 38.
- Assessment of useful life of property, plant and equipment and intangible asset- Note 2A(b) & (c).
- Estimation of obligations relating to employee benefits: key actuarial assumptions- Note 2A(g)
- Valuation of Inventories- Note 2A(d)
- Fair Value Measurement of financials instruments - Note 2A(p)
- Lease Classification- Note 2A(m)
- Recognition and Measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of outflow of resources- Note 2A(k)
- Impairment of Financial Assets- Note 2A(p)
- Impairment of Non-financial Assets- Note 2A(j)
d) Terms, rights, preferences and restrictions attached to equity shares
The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held.
Nature and purpose of reserve
a. Amalgamation reserve
Amalgation reserve has been created on amalgamation of Daurala Organics Limited with the Company.
b. General reserve
Profits earned by the company are transferred to General reserve as decided.
c. Capital redemption reserve
Created on redemption of preference shares as per requirements of the Companies Act, 1956.
d. Securities premium reserve
Securities premium reserve has been created on account of the premium received on issue of shares and capital and reorganisation reserve reclassified as share premium in the year ended March 31, 1993.
* The Board of Directors have proposed a final dividend of Rs. 4.00 per share for the financial year 2017-18 (2016-17 - Rs. 6.50 per share) aggregating to Rs. 837.62 lakhs (including corporate dividend tax). The proposed dividend for 2017-18 is subject to approval of shareholders in the ensuing Annual General Meeting and has not been considered in these Standalone Financial Statements.
** Included in âItems of other comprehensive incomeâ in statement of changes in equity.
Repayment terms and security disclosure for the outstanding borrowings as at March 31, 2018:
From banks:
Secured borrowings:
a) Nil (March 31,2017: Rs.450.53 lakhs, April 01,2016: Rs.807.98 lakhs), Rs.414.30 lakhs (March 31,2017: Rs.627.55 Lakhs, April 01,2016: Rs.835.91 lakhs), Rs.2461.97 lakhs (March 31,2017: Nil, April 01,2016: Nil), Nil (March 31,2017: Nil, April 01,2016: Rs.623.26 lakhs) and Rs.634.43 lakhs (March 31,2017: Nil, April 01,2016: Nil) currently carrying interest between 8.95% p.a. to 10.60%, repayable in 0, 8, 16, 0 and 16 quarterly installments respectively, were/are secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Companyâs bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans.
b) Nil (March 31,2017: Rs.279.60 lakhs, April 01,2016: Rs.558.63 lakh), Nil (March 31,2017: Rs.308.35 lakhs, April 01,2016: Rs.513.05 lakhs) and Nil (March 31,2017: Nil, April 01: Rs.119.93 lakhs) were secured by a first charge on specific movable assets of Shriram Rayons, a unit of the Company.
c) Nil (March 31,2017: Rs. 120.50 lakhs, April 01,2016: Rs. 282.44 lakhs) was secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, both present and future, excluding the assets exclusively charged subject to prior charges created / to be created in favour of the Companyâs bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/ to be created in favour of first charge holders for their respective term loans
d) Rs. 632.51 lakhs (March 31,2017: Rs. 1210.89 lakhs, April 01,2016: Rs. 1893.59 lakhs), Rs. 84.86 lakhs (March 31,2017: Rs. 163.19 lakhs, April 01,2016: Rs. 235.00 lakhs) and Nil (March 31,2017: Nil, April 01,2016: Rs.1992.09 lakhs) carrying interest of 12% p.a., repayable in 12, 13 and 0 monthly installments respectively, were/are secured by a residual charge on fixed assets of sugar factory at Daurala Sugar Works, a unit of the Company.
e) Rs. 519.59 lakhs (March 31,2017: Rs. 1034.20 lakhs, April 01,2016: Rs. 1556.38 lakhs) carrying interest of 10.65% p.a., repayable in 4 quarterly installments, is secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Companyâs bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans and 2nd pari-passu charge on all current assets of sugar division of the Company excluding stocks pledged with Distt. Co-operative Banks.
f) Nil (March 31,2017: Rs. 320.64 lakhs, April 01,2016: Rs. 435.46 lakhs) was secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Companyâs bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of first charge holders for their respective term loans and exclusive charge on assets acquired / to be acquired out of the loan in Distillery and Chemical divisions of Daurala Sugar Works and Shriram Rayons, units of the Company.
g) Rs.197.00 lakhs (March 31,2017: Rs. 296.23 lakhs, April 01,2016: Rs. 320.33 lakhs) carrying interest of 9.40% p.a., repayable in 8 quarterly installments, is secured by a first charge on specific movable assets of Distillery division of Daurala Sugar Works, a unit of the Company.
h) Nil (March 31,2017: Nil, April 01,2016: Rs. 202.09 lakhs) was secured by a first pari-passu charge on entire fixed assets of the Company, both present and future, excluding the assets exclusively charged and those pertaining to Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Companyâs bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of existing first charge holders for their respective term loans / debentures. Also exclusive charge on assets to be acquired in Daurala Organics, a unit of the Company.
i) Nil (March 31,2017: Nil, April 01,2016: Rs.1,000.00 lakhs) and Nil (March 31,2017: Nil, April 01,2016: Rs.801.06 lakhs) were secured by a first mortgage and charge on all fixed assets of Sugar factory at Daurala Sugar Works, a unit of the Company, subject to prior charges created / to be created in favour of the Companyâs bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans.
j) Rs. 24.96 lakhs (March 31,2017: Rs. 34.01 lakhs, April 01,2016: Rs. 52.11 lakhs) currently carrying interest of 10.45% p.a., repayable in 30 monthly installments, is secured by hypothecation of specific assets.
From others:
Secured borrowings:
a) Nil (March 31, 2017: Nil, April 1, 2016: Rs. 360.99 lakhs) was secured by an exclusive second charge on immovable and movable assets of sugar factory at Daurala Sugar Works, a unit of the Company.
b) Rs.227.54 lakhs (March 31,2017: Nil, April 01,2016: Nil) carrying interest of 4.25% p.a., repayable in 8 half yearly installments, is secured by a first pari-passu charge on immovable and movable properties of sugar Factory at Daurala Sugar Works, a unit of the Company.
Public deposits:
Unsecured borrowings:
Rs.655.49 lakhs (March 31,2017: Rs. 494.99 , April 01,2016: Rs. 476.59), carrying interest of 9.5% to 10.5% p.a., is currently repayable after 3 years from the date of acceptance of deposits.
The Companyâs exposure to interest rate risks related to above financial liabilities is disclosed in Note 46.
3. Operating lease - As a lessee
The Company has entered into operating leases agreements for various premises taken for accommodation of Companyâs officers / directors and various offices of the Company. The lease rental expense recognised in the Statement of Profit and Loss for the period in respect of leases is Rs. 599.70 lakhs (March 31, 2017: Rs. 525.72 lakhs).
4. Contingent liabilities and commitments
A. Contingent liabilities
* Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position.
B. Commitments
a. Capital commitments: Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounts to Rs. 2492.74 lakhs (March 31, 2017: Rs. 519.02 lakhs, April 1, 2016: Rs. 207.46 lakhs).
b. Other commitments: The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreement in normal course of business. The Company does not have any long term commitments / contracts including derivative contracts for which there will be any material foreseeable losses.
5. Proceedings in a Petition challenging the Preferential Issue of equity warrants by the Company filed by a shareholder before the Honâble Company Law Board (now National Company Law Tribunal) are continuing since November, 2007.
6. Earnings per share
Basic and diluted earnings/ (loss) per share
Basic and diluted earnings/ (loss) per share is calculated by dividing the profit/ (loss) during the year attributable to equity shareholders of the Company by the weighted number of equity shares outstanding during the year.
7. Employee benefits
A. Defined Contribution plans
Rs. 705.54 lakhs (March 31, 2017: Rs. 660.72 lakhs) for provident fund contribution and Rs. 163.85 lakhs (March 31, 2017: Rs. 276.09 lakhs) for superannuation fund contribution have been charged to the Statement of Profit and Loss. The contributions towards these schemes are at rates specified in the rules of the schemes. In case of provident fund administered through a trust, shortfall if any, shall be made good by the Company.
B. Defined benefit plans
Liability for gratuity, privilege leaves and medical leaves is determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in the gratuity fund.
Gratuity:
Gratuity scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.
Although the analysis does not take into account the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.
Sensitivities due to mortality & withdrawls are insignificant and hence not considered in sensitivity anaylsis disclosed.
(viii) Maturity profile
The table below shows the expected cash flow profile of the benefits to be paid to the current membership of the plan based on past service of the employees as at the valuation date:
C. Compensated absences:
The obligation of compensated absence in respect of the employees of the Company as at 31 March 2018 works out to Rs. 1,149.41 lakhs (31 March 2017: Rs. 1,007.04 lakhs, 1 April 2016: Rs. 897.99 lakhs)
D. Risk exposure:
These defined benefit plans typically expose the Company to actuarial risks as under:
a) 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.
b) Interest rate risk
A decrease in bond interest rate will increase the plan liability. However, this shall be partially off-set by increase in return as per debt investments.
c) Longevity risk
The present value of the defined plan liability is calculated by reference to the best estimate of the mortality of plan participants. An increase in the life expectancy will increase the planâs liability.
d) Salary risk
Higher than expected increase in salary will increase the defined benefit obligation.
8. Related party disclosures:
In accordance with the requirements of Ind AS 24 on Related Party Disclosures, the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are:
A. Names of related parties and nature of related party relationship
Subsidiary: Daurala Foods and Beverages Private Limited Associate: DCM Hyundai Limited
Key management personnel
Mr. Tilak Dhar, Chairman & Managing Director
Mr. Alok B.Shriram, Vice Chairman & Dy. Managing Director
Mr. Madhav B.Shriram, Deputy Managing Director
Mr. K.N. Rao, Director & CEO Rayons
Mr. P.R. Khanna, Independent Director
Mr. S.B. Mathur, Independent Director
Mr. Ravinder Narain, Independent Director
Mr. S.C. Kumar, Independent Director
Mr. C. Vikas Rao, Independent Director
Ms. Kavitha Dutt Chitturi, Independent Director
Mr. N.K. Jain, Chief Financial Officer
Mr. Y.D. Gupta, Chief General Manager & Company Secretary
Relatives/HUF of key management personnel
M/s. Bansi Dhar & Sons - HUF Mr. Akshay Dhar Ms. Kanika Shriram
Mr. Rudra Shriram Mr. Rohan Shriram Mr. Uday Shriram Mrs. K. Rao Mrs. Anita Gupta Mrs. Manju Jain Mr. Nirmal Kumar Jain Mrs. Maya Rani Jain Mr. Rajat Jain Mrs. Kiran Khanna Mr. P. R. Khanna (HUF)
Others (Enterprises over which key management personnel or their relatives are able to exercise significant influence)
Bantam Enterprises Private Limited
H.R. Travels Private Limited Hindustan Vaccum Glass Private Limited
# The Companyâs borrowings have been contracted at both floating and fixed rates of interest. The borrowings at floating rates reset at short intervals. Accordingly, the carrying value of such borrowings (including interest accrued but not due) approximates fair value.
* The carrying amounts of trade receivables, trade payables, cash and cash equivalents, investments, bank balances other than cash and cash equivalents and other financial assets and liabilities, approximates the fair values, due to their short-term nature. The other non-current financial assets represent security deposits given to various parties, loans and advances to employees and bank deposits (due for maturity after twelve months from the reporting date), and other noncurrent financial liabilities, the carrying value of which approximates the fair values as on the reporting date.
There have been no transfers between Level 1, Level 2 and Level 3 for the years ended March 31, 2018 and March 31, 2017.
Valuation
Following financial instruments are remeasured at fair value as under :
(a) The fair value of investments in quoted Equity Shares and Mutual Funds are measured at quoted price or NRV.
(b) All foreign currency denominated assets are translated using exchange rate at reporting date.
Risk Management
The Company Manages risk arising from financial instruments as under :
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due causing financial loss to the company. It arises from cash and cash equivalents, financial instruments and principally from credit exposure to customers relating to outstanding receivables. The company continuously reviews the credit to be given and the recoverability of amounts due. Majority of the trade receivables are from parties with whom the company had long standing satisfactory dealings.
* The Company believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour.
# The company continuously reviews the credit to be given and the recoverability of amounts due. Majority of the trade receivables, both domestic and overseas, are from parties with whom the company had long standing satisfactory dealings.
Movement in the allowance for impairment in respect of trade receivables is given below:
Note
Cash and cash equivalents
Credit risk on cash and cash equivalents is limited as the Company generally transacts with the Banks with high credit ratings assigned by domestic and international credit rating agencies.
Other financial assets
Other financial assets do not have any significant credit risk
b. Financial risk management (continued)
(ii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
The Company believes that its liquidity position, including total cash and cash equivalent and bank balances other than cash and cash equivalent of Rs. 1,229.11 lakhs as at March 31, 2018 (March 31, 2017 Rs. 912.84 lakhs, April 1, 2016 Rs. 782.20 lakhs), anticipated future internally generated funds from operations, and its fully available, revolving undrawn credit facility will enable it to meet its future known obligations in the ordinary course of business. However, if liquidity needs were to arise, the Company believes it has access to financing arrangements, which should enable it to meet its ongoing capital, operating, and other liquidity requirements. The Company will continue to consider various borrowing or leasing options to maximize liquidity and supplement cash requirements as necessary.
The Companyâs liquidity management process as monitored by management, includes the following:
- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.
- Maintaining rolling forecasts of the Companyâs liquidity position on the basis of expected cash flows.
- Maintaining diversified credit lines.
I. Financial arrangements
The company had access to the following undrawn borrowing facilities at the end of the reporting period:
III. Market risk
Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.The Board of directors is responsible for setting up of policies and procedures to manage market risks of the Company.
Currency risk
Currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Companyâs operating, investing and financing activities.
Sensitivity analysis
A reasonably possible strengthening / weakening of the Indian Rupee against below currencies at March 31, 2018 (previous year ended as on March 31, 2017) would have affected the measurement of financial instruments denominated in functional currency and affected equity and profit or loss by the amounts shown below. This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
USD: United States Dollar, EUR: Euro, GBP: Great British Pound, AUD:Australian Dollar, NZ$: New Zealand Dollar
b. Financial risk management (continued)
III. Market risk Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.
Exposure to interest rate risk
The Companyâs interest rate risk arises majorly from the term loans from banks carrying floating rate of interest. These obligations exposes the Company to cash flow interest rate risk. The exposure of the Companyâs borrowing to interest rate changes as reported to the management at the end of the reporting period along with the interest rate profile are as follows:
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points (bps) in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.
9. Capital management
For the purpose of the Companyâs capital management, capital includes issued equity share capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the management of the Companyâs capital structure is to maintain an efficient mix of debt and equity in order to achieve a low cost of capital, while taking into account the desirability of retaining financial flexibility to pursue business opportunities and adequate access to liquidity to mitigate the effect of unforeseen events on cash flows.
The Company manages its capital structure and makes adjustments to it in light of changes in the economic/ business conditions and requirements.
The Companyâs debt to capital ratio, which is calculated as interest-bearing debts (less cash & cash equivalents) divided by total capital (equity attributable to equity share holders plus interest-bearing debt) is as under:
10. Explanation of transition to Ind AS
As mentioned in note 2, to the standalone financial statements, these financial statements for the year ended March 31, 2018, are the first financial statements of the Company prepared in accordance with the Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with âprevious GAAPâ, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended).
The accounting policies set out in Note 2A have been applied in preparing these financial statements for the year ended March 31, 2018 including the comparative information for the year ended March 31, 2017 and the opening standalone Ind AS balance sheet as on the date of transition i.e. April 1, 2016.
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ended on or after March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at April 1, 2016, the Companyâs date of transition to Ind AS.
This note explains the principal adjustments made by the Company in restating its previous GAAP financial statements, including the balance sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017. According to Ind AS 101, the first Ind AS financial statements must use recognition and measurement principles that are based on standards and interpretations that are effective for the financial year ended March 31, 2018. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS financial statements. Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of April 1, 2016 compared with those presented in the previous GAAP Balance Sheet as of March 31, 2016, were recognised in equity within the Ind AS Balance Sheet.
A. Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
Transition elections
Explanation of the Ind AS 101 exceptions and exemptions to the full retrospective application of Ind AS applied by the Company.
In the Ind AS opening Balance Sheet as at April 1, 2016, the carrying amounts of assets and liabilities from the previous GAAP as at March 31, 2016 are generally recognized and measured according to Ind AS in effect for the financial year ended as on March 31, 2018. For certain individual cases, however, Ind AS 101 provides for optional exemptions to the general principles of retrospective application of Ind AS. The Company has made use of the following exemptions in preparing its Ind AS opening Balance Sheet.
a) Ind AS optional exemptions:
(i) Property, plant and equipment and intangible assets
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. Accordingly, the Company has elected to measure the property, plant and equipment and intangible assets at their previous GAAP values (except land, building and plant and machinery for which the Company has decided to measure them at previous GAAP revalued amount)
(ii) Determining whether an arrangement contains a lease
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected not to be material. The Company has elected to apply this exemption for such contracts/arrangements.
(iii) Business combinations
Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. Accordingly, the Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.
(iv) Investment in subsidiaries and associates
Ind AS 101 permits first-time adopter to elect to continue with the carrying value for its investments in subsidiaries, joint ventures and associates as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as the date of transition. Accordingly, the Company has elected to measure its investments in subsidiaries and associates at their previous GAAP values.
b) Ind AS mandatory exceptions:
(i) Estimates
An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company has made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
a) Determination of the discounted value for financial instruments carried at amortised cost
b) Impairment of financial assets based on expected credit loss model
(ii) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
B. Reconciliations between previous GAAP and Ind AS:
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.
C. Notes to the reconciliations:
1. Revaluation reserve set to zero on account of deemed cost exemption
Under previous GAAP, certain items of property, plant and equipment were revalued and a revaluation reserve was created. Under Ind AS, the revaluation reserve outstanding as at the date of transition (i.e. April 1, 2016) amounting to Rs. 1,602.89 lakhs have been recognised in retained earnings. The profit for the year ended March 31, 2017 decreased by Rs. 134.95 lakhs as a result of increased depreciation expense.
2. Fair valuation of investments in mutual funds
Under previous GAAP, investments in mutual funds were carried at lower of cost or market price. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments amounting to Rs. 32.08 lakhs have been recognised in total equity as at the date of transition (i.e. April 1, 2016). The profit for the year ended March 31, 2017 has decreased by Rs 7.66 lakhs and total equity for the year ended March 31, 2017 has increased by Rs. 24.42 lakhs due to the fair value changes.
3. Borrowings
Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at March 31, 2017 have been reduced by Rs. 20.56 lakhs (April 1, 2016 - Rs. 70.36 lakhs) with a corresponding increase in retained earnings. The transaction costs amounting to Rs. 1.98 lakhs on undrawn amount of borrowings have been recognised under other current assets as on 1 April, 2016 with a corresponding increase in retained earnings. The profit for the year ended March 31, 2017 reduced by Rs. 49.01 lakhs as a result of the additional interest expense based on the effective interest method.
4. Security deposits
Under Previous Indian GAAP, interest free security deposits (that are refundable in cash on completion of the term) are recorded at their transaction value. Under Ind AS, such financial assets are required to be recognised initially at their fair value and subsequently at amortised cost. Difference between the fair value and transaction value of the security deposit has been recognised as deferred rent. Consequent to this change the amount of security deposit as on March 31, 2017 has decreased by Rs.7.51 lakhs (April 1, 2016 : Rs. 11.38 lakhs) with a creation of deferred rent (included in other noncurrent and current assets) of Rs. 7.38 lakhs (April 1, 2016 : Rs. 11.38 lakhs). The unwinding of security deposit happens by recognition of a notional interest income in Statement of Profit and Loss at effective interest rate. The deferred rent gets amortised on a straight line basis over the term of the security deposits. The profit and total equity for the year ended March 31, 2017 decreased by Rs. 0.13 lakhs due to amortisation of deferred rent by Rs. 4.00 lakhs and increase in notional interest income of Rs. 3.87 lakhs recognised on security deposits (included in other income).
5. Proposed dividend
Under the previous GAAP upto March 31, 2016, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and corporate dividend tax of Rs. Nil lakhs as at March 31, 2017 (April 1, 2016 - Rs. 628.21 lakhs) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
6. Government grant
Under the previous GAAP, interest expense was recorded net of interest subvention. Under Ind AS, the amount of interest expense is recorded on gross basis and the benefit of interest subvention is recorded as government grant under other income. As a result, other income for the year ended March 31, 2017 is increased by Rs. 696.08 lakhs with a corresponding increase in finance cost amounting to Rs. 696.08 lakhs. There is no impact on the total equity as at March 31, 2017.
7. Employee benefits: Remeasurement of post employment benefit plans
Under Ind AS, remeasurements i.e. actuarial gains and losses on the net defined benefit liability are recognised in other comprehensive income instead of statement of profit and loss. Under previous GAAP these were forming part of the statement of profit and loss for the year. As a result. employee benefit expense to the extent of actuarial loss amounting to Rs. 109.65 lakhs (net of taxes) for the year ended March 31, 2017 has been reduced and the same has been reclassified to other comprehensive income. There is no impact on the total equity as at March 31, 2017.
8. Grossing up of bills discounting
Under previous GAAP, trade receivables and current borrowings were set -off on discounting of bills. Under Ind AS, such bills dicounting is presented on gross basis as these do not meet the conditions of set-off. Consequent to this change the amount of trade receivables as on March 31, 2017 has increased by Rs. 1120.71 lakhs (April 1, 2016 : Rs. 989.24 lakhs) with a corresponding increase in current borrowings by Rs. 1120.71 lakhs (April 1, 2016 : Rs. 989.24 lakhs). There is no impact on the total equity as at March 31, 2017.
9. Revenue from operations
Under previous GAAP, revenue from operations was disclosed net of excise duty on sales. Under Ind AS, revenue is shown gross of excise duty and the amount of excise duty is shown as expense in the statement of profit and loss. Consequent to this change the amount of revenue from operations for the year ended March 31, 2017 has increased by Rs. 6332.34 lakhs and a separate line item for expense on account of excise duty amounting to Rs. 6332.34 lakhs is presented in the statement of profit and loss. There is no impact on the total equity as at March 31, 2017.
10. Deferred tax
Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.
In addition, the various transitional adjustments lead to temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in reserve and surplus or a separate component of equity. On the date of transition (i.e April 1, 2016), the net impact on deferred tax liabilities is of Rs. 317.56 lakhs (March 31, 2017: Rs. 250.40 lakhs). The profit and total equity for the year ended March 31, 2017 increased by Rs. 67.16 lakhs due to differences in taxable profits and accounting profits.
11. Other comprehensive income
Under previous GAAP, there was no requirement to disclose any item of statement of profit and loss in other comprehensive income. However as per requirement of Ind AS certain items of profit or loss are to be reclassified to other comprehensive income. Consequent to this, the Company has reclassified remeasurement of defined benefit plans from the statement of profit and loss to other comprehensive income.
11. Research and development expenses amounting to Rs. 472.95 lakhs (March 31, 2017: Rs. 170.33 lakhs) have been charged to the respective revenue accounts. Capital expenditure relating to research and development amounting to Rs. 48.61 lakhs (March 31, 2017: Rs. 18.05 lakhs) has been included in property, plant and equipment.
12. Parties covered under âThe Micro, Small and Medium Enterprise Development Act, 2006â (MSMED Act, 2006) have been identified on the basis of confirmation received.
Based upon the information available, the balance due to the Micro and Small Enterprises as defined under the MSMED Act, 2006 is Rs. Nil (March 31, 2017: Rs. Nil, April 1, 2016: Rs. Nil). Further no interest during the year has been paid or is payable under the terms of the MSMED Act, 2006.
13. Disclosures related to government grant
The government grant/government assistance recognised are as under:
Mar 31, 2017
1. Banks
2. Nil (2015-16 - Rs.625.00 lakhs), Rs.453.12 lakhs (2015-16 - Rs. 815.63 lakhs) and Rs.630.00 lakhs (2015-16 - Rs.840.00 lakhs) currently carrying interest between 7.20% p.a. to 12.25% p.a.(net of interest subvention), repayable in 0, 5 and 12 quarterly installments respectively, are secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans.
3. Nil (2015-16 - Rs.202.39 lakhs) was secured by first pari-passu charge on entire fixed assets of the Company, both present and future, excluding the assets exclusively charged and those pertaining to Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of first charge holders for their respective term loans. Also exclusive charge on assets to be acquired in Daurala Organics, a unit of the Company.
4. Nil (2015-16 - Rs.12000 lakhs), Rs.280.00 lakhs (2015-16 - Rs.56000 lakhs) and Rs.309.37 lakhs (2015-16 - Rs.51562 lakhs) currently carrying interest between 7.30% p.a. to 8.40% p.a. (net of interest subvention), repayable in 0, 4 and 6 quarterly installments respectively, are secured by first charge on specific movable assets of Shriram Rayons, a unit of the Company.
5. Rs.122.42 lakhs (2015-16 - Rs.291.17 lakhs) currently carrying interest of 12.30% p.a. repayable in 6 quarterly installments is secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, both present and future, excluding the assets exclusively charged subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans.
6. Rs.1213.89 lakhs (2015-16 - Rs.1900.00 lakhs), Rs.163.19 lakhs (2015-16 - Rs.235.00 lakhs) and Nil (2015-16 - Rs.2000.00 lakhs) carrying Nil interest (net of interest subvention), repayable in 23 and 25 monthly installments respectively, are secured by residual charge on fixed assets of sugar factory at Daurala Sugar Works, a unit of the Company.
7. Rs.1040.00 lakhs (2015-16 - Rs.1560.00 lakhs) carrying Nil interest (net of interest subvention), repayable in 8 quarterly installments, is secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans and 2nd pari-passu charge on all current assets of sugar division of the Company excluding stocks pledged with Distt. Co-operative Banks.
8. Nil (2015-16 - Rs.1000.00 lakhs) and Nil (2015-16 - Rs.812.00 lakhs) were secured by a first mortgage and charge on all fixed assets of Sugar factory at Daurala Sugar Works, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans
9. Rs.325.19 lakhs (2015-16 - Rs.447.97 lakhs) carrying interest of 12.45% p.a., repayable in 14 quarterly installments, is secured by first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of first charge holders for their respective term loans and exclusive charge on assets acquired / to be acquired out of the loan in Distillery and Chemical divisions of Daurala Sugar Works and Shriram Rayons, units of the Company.
10. Rs.297.77 lakhs (2015-16 - Rs.322.79 lakhs) carrying interest of 11.15% p.a., repayable in 15 quarterly installments, is secured by first charge on specific movable assets of Distillery division of Daurala Sugar Works, a unit of the Company.
11. Rs.34.01 lakhs (2015-16 - Rs.52.11 lakhs) currently carrying interest of 10.20% p.a., repayable in 42 monthly installments, is secured by hypothecation of specific assets.
12. a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounts to Rs. 519.02 lakhs (2015-16 - Rs. 207.46 lakhs).
13. The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreement in normal course of business. The Company does not have any long term commitments / contracts including derivative contracts for which there will be any material foreseeable losses.
14. Research and development expenses amounting to Rs. 170.33 lakhs (2015-16 - Rs. 165.27 lakhs) have been charged to the respective revenue accounts. Capital expenditure relating to research and development amounting to Rs. 18.05 lakhs (2015-16 - Rs. Nil) has been included in fixed assets.
15. Parties covered under âThe Micro, Small and Medium Enterprise Development Act, 2006â (MSMED Act, 2006) have been identified on the basis of confirmation received.
Based upon the information available, the balance due to the Micro and Small Enterprises as defined under the MSMED Act, 2006 is Rs. Nil (2015-16 - Rs. Nil). Further no interest during the year has been paid or is payable under the terms of the MSMED Act, 2006.
16. Segment reporting
17.. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17 "Segment Reporting" Specified under Section 133 of the Act, the Company''s business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yarn, cord, fabric etc.) and Chemicals (comprising Organics & fine Chemicals).
18. Geographical segments
The Company''s geographical segments are Domestic and Overseas, by location of customers.
19. Segment accounting policies
In addition to the significant accounting policies applicable to the segments as set out in note 1 of notes forming part of the financial statement, the accounting policies in relation to segment accounting are as under :-
20. Segment assets and liabilities
Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities allocable to two or more segments are allocated to the segments on a reasonable basis.
21. Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segment.
22. Unallocated expenses
Unallocated expenses represent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results.
23. Inter segment sales
Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.
24. Related party disclosures under Accounting Standard (AS)18 A. Names of related parties and nature of related party relationship
Subsidiary : Daurala Foods & Beverages Private Limited (DFBPL).
Associate : DCM Hyundai Limited (DHL).
Key management personnel : Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr. Madhav B. Shriram and Mr. K. N. Rao.
Relatives/HUF of key management personnel : Mr. Akshay Dhar, Ms. Kanika Shriram, Mr. Rudra Shriram, Mrs. K. Rao and M/s. Bansi Dhar & Sons - HUF (BDS).
Others (Enterprise over which key management personnel or their relatives are able to exercise significant influence) : Bantam Enterprises Private Limited (BEPL) and H.R. Travels Private Limited (HRTPL).
25. Disclosures in respect of assets taken on Operating Lease under Accounting Standard (AS) 19 "Leases" is as under :
26. The Company has entered into operating leases agreements for various premises taken for accommodation of Company''s officers / directors and various offices of the Company. As at March 31, 2017 the future minimum lease payments under non-cancellable period which is not later than one year are Rs. Nil (2015-16 - Rs. Nil).
27. Lease rent charged to the Statement of Profit and Loss relating to operating leases entered or renewed after April 1, 2001 are Rs. 521.72 lakhs (2015-16 - Rs. 489.06 lakhs).
28. The Company has implemented Revised Accounting Standard (AS-10) âProperty, Plant and Equipmentâ applicable w.e.f. 1st April, 2016, and adopted the Cost Model. Consequently, the Revaluation amount of Rs. 1602.89 lakhs as on 31st March, 2016, included in Fixed Assets (Note 12) has been adjusted against corresponding Revaluation Reserve in Reserves and Surplus (Note 3).
Mar 31, 2016
I. Banks
a) Nil (2014-15 - Rs.141.00 lacs), Rs.625.00 lacs (2014-15 - Rs.1250.00 lacs), Rs.815.63 lacs (2014-15 - Rs.1178.13 lacs) and Rs.840.00 lacs (2014-15 - Rs.1050.00 lacs) currently carrying interest between 7.20% p.a. to 12.50% p.a.(net of interest subvention), repayable in 0, 4, 9 and 16 quarterly installments respectively, are secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans.
b) Rs.202.39 lacs (2014-15 - Rs.555.33 lacs) carrying interest of 12.50% p.a., repayable in 2 quarterly installments, is secured by first pari-passu charge on entire fixed assets of the Company, both present and future, excluding the assets exclusively charged and those pertaining to Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of first charge holders for their respective term loans. Also exclusive charge on assets to be acquired in Daurala Organics, a unit of the Company.
c) Rs.120.00 lacs (2014-15 - Rs.240.00 lacs), Rs.560.00 lacs (2014-15 - Rs.840.00 lacs) and Rs.515.62 lacs (2014-15 - Rs.721.87 lacs) currently carrying interest between 7.30% p.a. to 12.25% p.a. (net of interest subvention), repayable in 4, 8 and 10 quarterly installments respectively, are secured by first charge on specific movable assets of Shriram Rayons, a unit of the Company.
d) Nil (2014-15 - Rs.81.00 lacs) was secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created in favour of first charge holders for their respective term loans.
e) Rs.291.17 lacs (2014-15 - Rs.459.92 lacs) currently carrying interest of 12.30% p.a. repayable in 10 quarterly installments is secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, both present and future, excluding the assets exclusively charged subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans.
f) Rs.1900.00 lacs (2014-15 - Rs.1900.00 lacs), Rs.235.00 lacs (2014-15 - Rs.235.00 lacs) and Rs.2000.00 lacs (2014-15 - Nil) carrying interest between Nil to 1.20% p.a. (net of interest subvention), repayable in 36, 36 and 12 monthly installments respectively, are secured by residual charge on fixed assets of sugar factory at Daurala Sugar Works, a unit of the Company.
g) Rs.1560.00 lacs (2014-15 - Rs.1560.00 lacs) carrying Nil interest (net of interest subvention), repayable in 12 quarterly installments, is secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans and 2nd pari-passu charge on all current assets of sugar division of the Company excluding stocks pledged with Distt. Co-operative Banks.
h) Rs.1000.00 lacs (2014-15 - Nil) and Rs.812.00 lacs (2014-15 - Nil) currently carrying interest of 2.00% p.a. and 2.35% p.a. (net of interest subvention), repayable in 12 monthly and 8 quarterly installments respectively, are secured by a first mortgage and charge on all fixed assets of Sugar factory at Daurala Sugar Works, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of first charge holders for their respective term loans.
i) Rs.447.97 lacs (2014-15 - Nil) carrying interest of 11% p.a., repayable in 16 quarterly installments, is secured by first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company''s bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of first charge holders for their respective term loans and exclusive charge on assets acquired / to be acquired out of the loan in Distillery and Chemical divisions of Daurala Sugar Works and Shriram Rayons, units of the Company.
j) Rs.322.79 lacs (2014-15 - Nil) carrying interest of 11.20% p.a., repayable in 16 quarterly installments, is secured by first charge on specific movable assets of Distillery division of Daurala Sugar Works, a unit of the Company.
k) Rs.52.11 lacs (2014-15 - Rs.17.90 lacs) currently carrying interest of 10.20% p.a., repayable in 54 monthly installments, is secured by hypothecation of specific assets.
1. a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounts to Rs. 207.46 lacs (2014-15 - Rs. 104.73 lacs).
b) The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreement in normal course of business. The Company does not have any long term commitments / contracts including derivative contracts for which there will be any material foreseeable losses
2. Research and development expenses amounting to Rs. 165.27 lacs (2014-15 - Rs. 146.50 lacs) have been charged to the respective revenue accounts. Capital expenditure relating to research and development amounting to Nil (2014-15 -Rs. 58.76 lacs) has been included in fixed assets.
3. Parties covered under âThe Micro, Small and Medium Enterprise Development Act, 2006â (MSMED Act, 2006) have been identified on the basis of confirmation received.
Based upon the information available, the balance due to the Micro and Small Enterprises as defined under the MSMED Act, 2006 is Nil (2014-15 - Rs. 1.35 lacs). Further no interest during the year has been paid or is payable under the terms of the MSMED Act, 2006.
4. Segment reporting
A. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17 âSegment Reportingâ specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, the Companyâs business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yarn, cord, fabric etc.) and Chemicals (comprising Organics & fine Chemicals).
B. Geographical segments
The Companyâs geographical segments are Domestic and Overseas, by location of customers.
C. Segment accounting policies
In addition to the significant accounting policies applicable to the segments as set out in note 1 of notes forming part of the financial statement, the accounting policies in relation to segment accounting are as under :-
i) Segment assets and liabilities
Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities allocable to two or more segments are allocated to the segments on a reasonable basis.
ii) Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segment.
iii) Unallocated expenses
Unallocated expenses represent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results.
iv) Inter segment sales
Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.
5. Disclosures in respect of assets taken on Operating Lease under Accounting Standard (AS) 19 âLeasesâ is as under :
i) The Company has entered into operating leases agreements for various premises taken for accommodation of Companyâs officers / directors and various offices of the Company. As at March 31, 2016 the future minimum lease payments under non-cancellable period which is not later than one year are Rs. Nil (2014-15 - Rs. Nil).
ii) Lease rent charged to the Statement of Profit and Loss relating to operating leases entered or renewed after April 1, 2001 are Rs. 489.06 lacs (2014-15 - Rs. 502.33 lacs).
6. Proceedings in a Petition filed by a shareholder before the Honâble Company Law Board (CLB) u/s 397/398 of the Companies Act, 1956 in November 2007, challenging the preferential issue of equity warrants by the Company, are continuing.
7. Employee benefits
a) Defined contribution plans
Rs. 516.12 lacs (2014-15 - Rs. 642.24 lacs) for provident fund contribution and Rs. 249.51 lacs (2014-15 - Rs. 154.96 lacs) for superannuation fund contribution have been charged to the Statement of Profit and Loss. The contributions towards these schemes are at rates specified in the rules of the schemes. In case of provident fund administered through a trust, shortfall if any, shall be made good by the Company.
b) Defined benefit plans
i) Liability for gratuity, privilege leaves and medical leaves is determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in the gratuity fund.
ii) Gratuity Scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.
8. Schedule II of the Companies Act, 2013 became applicable w.e.f. April 1, 2014. Accordingly, in respect of fixed assets where the remaining useful life as per Schedule II was Nil as on April 1, 2014 the carrying amount (after retaining residual value) of Rs. 556.06 lacs (including revalued amount Rs. 316.94 lacs and net of deferred tax Rs. 123.13 lacs) was adjusted against the opening balance of Surplus in Statement of Profit and Loss and the revalued amount was transferred from Revaluation reserve to General reserve in the previous year.
9. The Govt. of Uttar Pradesh had announced subsidy on sugarcane purchased during sugar season 2014-15 to be finalized by a Committee constituted by them. During the year the company received Rs. 4815.57 lacs against the same out of which Rs. 3277.93 lacs was accounted for in 2014-15 and balance Rs. 1537.64 lacs has been accounted for in the Statement of Profit and Loss for the year by adjustment of raw material consumption in note 23.
10. Previous yearâs figures have been regrouped / recast wherever necessary to correspond with the current yearâs classification / disclosures.
Mar 31, 2015
I. Banks
a) Nil (2013-14 - Rs. 200.00 lacs), Rs. 141.00 lacs (2013-14 - Rs.
713.00 lacs), Rs.1250.00 lacs (2013-14 - Rs.1875.00 lacs), Rs.1178.13
lacs (2013-14 - Rs. 1450.00 lacs) and Rs.1050.00 lacs (2013-14 - Rs.
276.33 lacs) currently carrying interest between 7.75% to 13.00% (net
of interest subvention) and repayable in 0, 1,8, 13 and 20 quarterly
installments respectively are secured by a first mortgage and charge on
all the immovable and movable properties of the Company excluding all
assets of Daurala Organics, a unit of the Company, subject to prior
charges created / to be created in favour of the Company's bankers for
securing the borrowings for working capital requirements, the charges
ranking pari-passu with the charges created/to be created in favour of
existing first charge holders for their respective term loans.
b) Rs. 555.33 lacs (2013-14 - Rs. 1025.92 lacs) carrying interest of
12.50% and repayable in 5 quarterly installments is secured by first
pari-passu charge on entire fixed assets of the Company, both present
and future, excluding the assets exclusively charged and those
pertaining to Daurala Organics, a unit of the Company, subject to prior
charges created / to be created in favour of the Company's bankers for
securing the borrowings for working capital requirements, the charges
ranking pari-passu with the charges created / to be created in favour
of existing first charge holders for their respective term loans /
debentures. Also exclusive charge on assets to be acquired in Daurala
Organics, a unit of the Company.
c) Nil (2013-14 - Rs.163.71 lacs), Rs. 240.00 lacs (2013-14 - Rs.
360.00 lacs), Rs. 840.00 lacs (2013-14 - Rs. 1120.00 lacs) and Rs.
721.87 lacs (2013-14 - Rs. 414.88 lacs) currently carrying interest
between 7.50% to 12.75% (net of interest subvention) and repayable in
0, 8, 12 and 14 quarterly installments respectively are secured by
first charge on specific movable assets of Shriram Rayons, a unit of
the Company.
d) Rs. 81.00 lacs (2013-14 - Rs. 231.00 lacs) currently carrying
interest of 14.25% repayable in 3 quarterly installments is secured by
a first mortgage and charge on all the immovable and movable properties
(save and except book debts) of Daurala Organics, a unit of the
Company, subject to prior charges created / to be created in favour of
the Company's bankers for securing the borrowings for working capital
requirements, the charges ranking pari-passu with the charges
created/to be created in favour of existing first charge holders for
their respective term loans.
e) Rs. 459.92 lacs (2013-14 - Rs.124.46 lacs) currently carrying
interest of 12.50% repayable in 14 quarterly installments is secured by
a first mortgage and charge on all the immovable and movable properties
(save and except book debts) of Daurala Organics, a unit of the
Company, both present and future, excluding the assets exclusively
charged subject to prior charges created / to be created in favour of
the Company's bankers for securing the borrowings for working capital
requirements, the charges ranking pari-passu with the charges
created/to be created in favour of existing first charge holders for
their respective term loans.
f) Rs. 1900.00 lacs (2013-14 - Rs.1900.00 lacs) and Rs. 235.00 lacs
(2013-14 - Nil) carrying Nil interest (net of interest subvention)
repayable in 36 monthly installments is secured by residual charge on
fixed assets of sugar factory at Daurala Sugar Works, a unit of the
Company.
g) Rs. 1560.00 lacs (2013-14 -Nil) carrying Nil interest (net of
interest subvention) repayable in 12 quarterly installments is secured
by a first mortgage and charge on all the immovable and movable
properties of the Company excluding all assets of Daurala Organics, a
unit of the Company, subject to prior charges created / to be created
in favour of the Company's bankers for securing the borrowings for
working capital requirements, the charges ranking pari-passu with the
charges created/to be created in favour of existing first charge
holders for their respective term loans and 2nd pari-passu charge on
all current assets of sugar division of the company excluding stocks
pledged with Distt. Co-operative Banks.
h) Rs. 17.90 lacs (2013-14 - Rs. 24.72 lacs) currently carrying
interest of 11.25% repayable in 38 monthly installments are secured by
hypothecation of specific assets.
II. Others
Rs. 721.98 lacs (2013-14 - Rs.1082.97 lacs) carrying interest of 4% and
repayable in 2 yearly installments is secured by exclusive second
charge on immovable and movable assets of sugar factory at Daurala
Sugar Works, a unit of the Company.
2. Provision for contingencies of Rs. 100 lacs (2013-14 Rs. 100 lacs)
in Note 7 represents the maximum possible exposur on ultimate
settlement of issues relating to reorganisation arrangement of the
Company.
As at As at
31.03.2015 31.03.2014
3. Contingent liabilities not provided for:- (Rs. lacs) (Rs. lacs)
a) Income tax matters* 196.55 196.55
b) Excise and Service tax matters* 388.74 122.08
c) Claims against the Company not
acknowledged as debts
(excluding claims by employees,
where amount is not ascertainable)* 773.03 784.04
d) Bills discounted 3635.81 3045.21
* Matters are subject to legal proceedings in the ordinary course of
business. The legal proceedings, when ultimately concluded will not, in
the opinion of the management, have a material effect on the results of
the operations or financial position.
4. a) Estimated amount of contracts remaining to be executed on
capital account and not provided for (net of advances) amounts to Rs.
104.73 lacs (2013-14 - Rs. 1216.15 lacs).
b) The Company has other commitments, for purchase / sales orders which
are issued after considering requirements per operating cycle for
purchase / sale of goods and services, employee benefits including
union agreement in normal course of business. The Company does not have
any long term commitments / contracts including derivative contracts
for which there will be any material foreseeable losses.
5. Research and development expenses amounting to Rs. 146.50 lacs
(2013-14 - Rs. 128.63 lacs) have been charged to the respective revenue
accounts. Capital expenditure relating to research and development
amounting to Rs. 58.76 lacs (2013-14 - Rs. 30.04 lacs) has been
included in fixed assets.
6. Parties covered under "The Micro, Small and Medium Enterprise
Development Act, 2006" (MSMED Act, 2006) have been identified on the
basis of confirmation received.
Based upon the information available, the balance due to the Micro and
Small Enterprises as defined under the MSMED Act, 2006 is Rs. 1.35 lacs
(2013-14 - Nil). Further no interest during the year has been paid or
is payable under the terms of the MSMED Act, 2006.
7. Segment reporting
A. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17
"Segment Reporting" as notified under the Companies (Accounting
Standards) Rules, 2006, the Company's business segments are Sugar
(comprising sugar, power and molasses based alcohols), Industrial
Fibres and related products (comprising rayon, synthetic yarn, cord,
fabric etc.) and Chemicals (comprising Organics & Fine Chemicals).
B. Geographical segments
The Company's geographical segments are Domestic and Overseas, by
location of customers.
C. Segment accounting policies
In addition to the significant accounting policies applicable to the
segments as set out in note 1 of notes forming part of the financial
statement, the accounting policies in relation to segment accounting
are as under :-
i) Segment assets and liabilities
Segment assets include all operating assets used by a segment and
consist principally of operating cash, debtors, inventories and fixed
assets, net of allowances and provisions which are reported as direct
offsets in the balance sheet. Segment liabilities include all operating
liabilities and consist principally of creditors and accrued
liabilities. Segment assets and liabilities do not include
investments, share capital, reserves and surplus, loan funds, income
tax - current and deferred and certain other assets and liabilities not
allocable to the segments on a reasonable basis. While most of the
assets/liabilities can be directly attributed to individual segments,
the carrying amount of certain assets/liabilities allocable to two or
more segments are allocated to the segments on a reasonable basis.
ii) Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a
reasonable basis. All other segment revenue and expenses are directly
attributable to the segment.
iii) Unallocated expenses
Unallocated expenses represent general administrative expenses,
head-office expenses and other expenses that arise at the Company level
and relate to the Company as a whole. As such, these expenses have not
been considered in arriving at the segment results.
iv) Inter segment sales
Inter segment sales between operating segments are accounted for at
market price. These transactions are eliminated in consolidation.
A. Names of related parties and nature of related party relationship
Subsidiary : Daurala Foods & Beverages Private Limited (DFBPL).
Associate : DCM Hyundai Limited (DHL).
Key management personnel : Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr.
D.C. Mittal (upto 30/06/2014), Mr. Madhav B. Shriram, Mr. Anil Gujral
(upto 31/01/2014) and Mr. K. N. Rao (w.e.f. 01/02/2014).
Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs.
Kiran Mittal (upto 30/06/2014), Mr. Akshay Dhar, Ms. Kanika Shriram,
Mrs. Divya Shriram, Ms. Aditi Dhar, Ms. Ritu Bansal (upto 30/06/2014),
Mr. Rudra Shriram (w.e.f. 22/08/2013), Mrs. K. Rao (w.e.f. 01/02/2014)
and M/s. Bansi Dhar & Sons - HUF (BDS).
Others (Enterprise over which key management personnel or their
relatives are able to exercise significant influence) : Bantam
Enterprises Private Limited (BEPL) and H.R. Travels Private Limited
(HRTPL).
B. Transactions with related parties referred to in 38 (A)
i) Transactions with subsidiary and associate
i) The Company has entered into operating leases agreements for various
premises taken for accommodation of Company's officers / directors and
various offices of the Company. As at March 31,2015 the future minimum
lease payments under non- cancellable period which is not later than
one year are Rs. Nil (2013-14 - Rs. Nil).
ii) Lease rent charged to the Statement of Profit & Loss relating to
operating leases entered or renewed after April 1,2001 are Rs. 502.33
lacs (2013-14 - Rs. 468.74 lacs).
8. Proceedings in a Petition filed by a shareholder before the Hon'ble
Company Law Board (CLB) u/s 397/398 of the Companies Act, 1956 in
November 2007, challenging the preferential issue of equity warrants by
the Company, are continuing.
9. Employee benefits
a) Defined contribution plans
Rs. 642.24 lacs (2013-14 - Rs. 577.30 lacs) for provident fund
contribution and Rs.154.96 lacs (2013-14 -
Rs. 140.67 lacs) for superannuation fund contribution have been charged
to the Statement of Profit and Loss.
The contributions towards these schemes are at rates specified in the
rules of the schemes. In case of provident fund administered through a
trust, shortfall if any, shall be made good by the Company.
b) Defined benefit plans
i) Liability for gratuity, privilege leaves and medical leaves is
determined on actuarial basis. Gratuity liability is provided to the
extent not covered by the funds available in the gratuity fund.
ii) Gratuity Scheme provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination of
employment. Vesting occurs upon completion of five years of service,
except death while in employment.
10. The Government of Uttar Pradesh has announced subsidy on sugar cane
purchased during the sugar season 2014-15 linked to average selling
price of sugar and its by-products during the period 1st October, 2014
to 31st May, 2015 to be finalised by a Committee to be constituted by
the Government of Uttar Pradesh. Based on prevailing and expected
prices, the Company is confident of realising the full subsidy of Rs.
28.60 per qtl. aggregating to Rs. 3972.41 lacs. Pending final
determination of the amount of subsidy, the company has on a
conservative basis accounted for Rs. 3277.93 lacs in the Statement of
Profit & Loss for the year by adjustment of raw material consumption in
note 23. Necessary adjustments would be made on final determination of
the amount of subsidy.
11. Schedule II of the Companies Act, 2013 became applicable w.e.f.
April 1,2014. Accordingly :
a) depreciation for the year computed in accordance with the useful
life of fixed assets as prescribed in Schedule II is lower by Rs.
530.37 lacs and Rs. 138.62 lacs, being an amount equivalent to the
additional charge arising due to revaluation has been transferred from
Revaluation reserve to General reserve.
b) in respect of fixed assets where the remaining useful life as per
Schedule II is Nil, the carrying amount (after retaining residual
value) of Rs. 556.06 lacs (including revalued amount Rs. 316.94 lacs
and net of deferred tax Rs. 123.13 lacs) has been adjusted against the
opening balance of Surplus in Statement of Profit & Loss and the
revalued amount has been transferred from Revaluation reserve to
General reserve.
12. Previous year's figures have been regrouped / recast wherever
necessary to correspond with the current year's classification /
disclosures.
Mar 31, 2014
As at As at
31.03.2014 31.03.2013
1. Contingent liabilities not provided for:- (Rs. lacs) (Rs. lacs)
Income tax matters* 196.55 193.40
Excise / Service tax / Customs duty matters* 122.08 759.35
Claims against the Company not
acknowledged as debts (excluding claims by
employees, where amount is not ascertainable)* 784.04 1069.60
Bills discounted 3045.21 2729.45
* Matters are subject to legal proceedings in the ordinary course of
business. The legal proceedings, when ultimately concluded will not, in
the opinion of the management, have a material effect on the results of
the operations or financial position.
2. a) Estimated amount of contracts remaining to be executed on
capital account and not provided for (net of advances) amounts to Rs.
1216.15 lacs (2012-13 - Rs. 297.66 lacs).
b) The Company has other commitments, for purchase / sales orders which
are issued after considering requirements per operating cycle for
purchase / sale of goods and services, employee benefits including union
agreement in normal course of business. The Company does not have any
long term commitments or material non-cancellable contractual
commitments / contracts, which might have material impact on the
financial statements.
3. Research and development expenses amounting to Rs. 128.63 lacs
(2012-13 - Rs. 113.67 lacs) have been charged to the respective revenue
accounts. Capital expenditure relating to research and development
amounting to Rs. 30.04 lacs (2012-13 - Rs. 53.27 lacs) has been
included in fixed assets.
4. Parties covered under "The Micro, Small and Medium Enterprise
Development Act, 2006" (MSMED Act, 2006) have been identified on the
basis of confirmations received.
Based upon the information available, the balance due to the Micro and
Small Enterprises as Defined under the MSMED Act, 2006 is Nil (2012-13 -
Nil). Further no interest during the year has been paid or payable
under the terms of the MSMED Act, 2006.
5. Segment reporting
A. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17
"Segment Reporting" as notifed under the Companies (Accounting
Standards) Rules, 2006, the Company''s business segments are Sugar
(comprising sugar, power and molasses based alcohols), Industrial
Fibres and related products (comprising rayon, synthetic yarn, cord,
fabric etc.) and Chemicals (comprising Organics & fne Chemicals).
B. Geographical segments
The Company''s geographical segments are Domestic and Overseas, by
location of customers.
C. Segment accounting policies
In addition to the significant accounting policies applicable to the
segments as set out in note 1 of notes forming part of the financial
statements, the accounting policies in relation to segment accounting
are as under :-
i) Segment assets and liabilities
Segment assets include all operating assets used by a segment and
consist principally of operating cash, debtors, inventories and fixed
assets, net of allowances and provisions which are reported as direct
offsets in the balance sheet. Segment liabilities include all
operating liabilities and consist principally of creditors and accrued
liabilities. Segment assets and liabilities do not include investments,
share capital, reserves and surplus, loan funds, income tax - current
and deferred and certain other assets and liabilities not allocable to
the segments on a reasonable basis. While most of the
assets/liabilities can be directly attributed to individual segments,
the carrying amount of certain assets/liabilities allocable to two or
more segments are allocated to the segments on a reasonable basis.
ii) Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a
reasonable basis. All other segment revenue and expenses are directly
attributable to the segment.
iii) Unallocated expenses
Unallocated expenses represent general administrative expenses,
head-office expenses and other expenses that arise at the Company level
and relate to the Company as a whole. As such, these expenses have not
been considered in arriving at the segment results.
iv) Inter segment sales
Inter segment sales between operating segments are accounted for at
market price. These transactions are eliminated in consolidation.
6. Related party disclosures under Accounting Standard (AS)18
A. Names of related parties and nature of related party relationship
Subsidiary : Daurala Foods & Beverages Private Limited (DFBPL)
Associate : DCM Hyundai Limited (DHL).
Key management personnel : Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr.
D.C. Mittal, Mr. Madhav B. Shriram, Mr. Anil Gujral (upto 31/01/2014)
and Mr. K. N. Rao (w.e.f. 01/02/2014).
Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs.
Kiran Mittal, Mr. Akshay Dhar, Ms. Kanika Shriram, Mrs. Divya Shriram,
Ms. Aditi Dhar, Ms. Ritu Bansal, Mr. Rudra Shriram (w.e.f. 22/08/2013),
Mrs. K. Rao (w.e.f. 01/02/2014) and M/s. Bansi Dhar & Sons - HUF (BDS).
Others (Enterprises over which key management personnel or their
relatives are able to exercise significant infuence): Bantam Enterprises
Private Limited (BEPL) and H.R. Travels Private Limited (HRTPL).
7. The Company does not have any Finance Lease. Disclosures in
respect of assets taken on Operating Lease under Accounting Standard
(AS) 19 "Leases" is as under:
i) The Company has entered into operating leases agreements for various
premises taken for accommodation of Company''s officers / directors and
various offices of the Company. As at March 31, 2014 the future minimum
lease payments under non- cancellable period which is not later than
one year are Rs. Nil (2012-13 - Rs. 58.64 lacs).
ii) Lease rent charged to the Statement of profit & Loss relating to
operating leases entered or renewed after April 1, 2001 are Rs. 468.00
lacs (2012-13 - Rs. 448.85 lacs).
8. Proceedings in a Petition fled by a shareholder before the Hon''ble
Company Law Board (CLB) u/s 397/398 of the Companies Act, 1956 in
November 2007, challenging the preferential issue of equity warrants by
the Company, are continuing.
9. Employee benefits
a) Defined contribution plans
Rs. 577.30 lacs (2012-13 - Rs. 512.86 lacs) for provident fund
contribution and Rs.140.67 lacs (2012-13 - Rs. 186.09 lacs) for
superannuation fund contribution have been charged to the Statement of
profit and Loss. The contributions towards these schemes are at rates
specified in the rules of the schemes. In case of provident fund
administered through a trust, shortfall if any, shall be made good by
the Company.
b) Defined benefit plans
i) Liability for gratuity, privilege leaves and medical leaves is
determined on actuarial basis. Gratuity liability is provided to the
extent not covered by the funds available in the gratuity fund.
ii) Gratuity Scheme provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination of
employment. Vesting occurs upon completion of five years of service,
except death while in employment.
Mar 31, 2013
1. A) Pursuant to the Scheme of Arrangement as approved by the High
Court of Delhi vide its Order dated April 16, 1990 under
sections 391 / 394 of the Companies Act, 1956, assets and liabilities
relating to certain units and certain reserves of the undivided DCM
Limited were transferred /allocated to the Company w.e.f. April 1,1990,
being the effective date; Theexcess of net assets acquired over the
share capital and reserves had been transferred to the securities
premium account. b) There are various issues relating to sales tax,
income-tax, interest, etc. arisen / arising out of the reorganisation
arrangement which will be settled and accounted for in terms of the
Scheme of Arrangement of DCM Limited as and when the liabilities /
benefits are finally determined. The ultimate effect of these is not
ascertainable at this stage.
As at As at
31.03.2013 31.03.2012
2. Contingent liabilities
not provided for:- (Rs. lacs) (Rs. lacs)
Income tax matters* 193.40 1661.60
Excise / Service tax / Customs
duty matters* 759.35 734.79
Claims against the Company not
acknowledged as debts
(excluding claims by employees,
where amount is not ascertainable)* 1069.60 1025.54
Bills discounted 2729.45 2336.53
* Matters are subject to legal proceedings in the ordinary course of
business. The legal proceedings, when ultimately concluded will not, in
the opinion of the management, have a material effect on the results of
the operations or financial position.
3. a) Estimated amount of contracts remaining to be executed on
capital account and not provided for (net of advances) amounts
to Rs. 297.66 lacs (2011-12 - Rs. 104.02 lacs).
b) The Company has other commitments, for purchase / sales orders which
are issued after considering requirements per operating cycle for
purchase / sale of goods and services, employee''s benefits including
union agreement in normal course of business. The Company does not
have any long term commitments or material non-cancellable contractual
commitments / contracts, which might have material impact on the
financial statements.
4. Research and development expenses amounting to Rs. 113.67 lacs
(2011 -12 - Rs. 90.52 lacs) have been charged to the respective revenue
accounts. Capital expenditure relating to research and development
amounting to Rs. 53.27 lacs (2011-12 - Rs. 28.32 lacs) has been
included in fixed assets.
5. Parties covered under "The Micro, Small and Medium Enterprise
Development Act, 2006" (MSMED Act, 2006) have been identified on the
basis of confirmation received.
Based upon the information available, the balance due to the Micro and
Small Enterprises as defined under the MSMED Act, 2006 is Nil (2011-12
- Nil). Further no interest during the year has been paid or payable
under the terms of the MSMED Act, 2006.
6. Segment reporting
A. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17
"Segment Reporting" as notified under the Companies (Accounting
Standards) Rules, 2006, the Company''s business segments are Sugar
(comprising sugar, power and molasses based alcohols), Industrial
Fibres and related products (comprising rayon, synthetic yam, cord,
fabric etc.) and Chemicals (comprising Organics & fine Chemicals).
B. Geographical segments
The Company''s geographical segments are Domestic and Overseas, by
location of customers.
C. Segment accounting policies
In addition to the significant accounting policies applicable to the
segments as set out in note 1 of notes forming part of the financial
statement, the accounting policies in relation to segment accounting
are as under :-
i) Segment assets and liabilities
Segment assets include all operating assets used by a segment and
consist principally of operating cash, debtors, inventories and fixed
assets, net of allowances and provisions which are reported as direct
offsets in the balance sheet. Segment liabilities include aU operating
liabilities and consist principally of creditors and accrued
liabilities. Segment assets and liabilities do not include investments,
share capital, reserves and surplus, loan funds, income tax - current
and deferred and certain other assets and liabilities not allocable to
the segments on a reasonable basis. While most of the
assets/liabilities can be directly attributed to individual segments,
the carrying amount of certain assets/liabilities allocable to two or
more segments are allocated to the segments on a reasonable basis.
ii) Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a
reasonable basis. All other segment revenue and.expenses are directly
attributable to the segment.
iii) Unallocated expenses
Unallocated expenses represent general administrative expenses,
head-office expenses and other expenses that arise at the Company level
and relate to the Company as a whole. As such, these expenses have not
been considered in arriving at the segment results.
ivy Inter segment sales
Inter segment sales between operating segments are accounted for at
market price. These transactions are eliminated in consolidation.
7. Related party disclosures under Accounting Standard (AS)18 A.
Names of related party and nature of related party relationship
Subsidiary: Daurala Foods & Beverages Private Limited (DFBPL)
Associate: DCM Hyundai Limited (DHL).
Key management personnel : Mr. Tilak Ohar, Mr. Alok B. Shriram, Mr.
D.C. Mittal, Mr. Madhav B. Shriram and Mr. Anil Gujral.
Relatives/HUF of key management personnel: Mrs. Karuna Shriram, Mrs.
Kiran Mittal, Mr. Akshay Dhar, Ms. Kanika Shriram (w.e.f. 03/10/11),
M/s. Bansi Dhar & Sons - HUF (BDS), Mrs. Divya Shriram, Ms. Aditi Dhar
and Ms. Ftitu Bansal.
Others (Enterprise over which key management personnel or their
relatives are able to exercise significant influence): Bantam
Enterprises Private Limited (BEPL) and H.R. Travels Private Limited
(HRTPL).
8. The Company does not have any Finance Lease. Disclosures in
respect of assets taken on Operating Lease under Accounting Standard
(AS) 19 "Leases" is as under:
i) The Company has entered into operating leases agreements for various
premises taken for accommodation of Company''s officers / directors and
various offices of the Company. As at March 31,2013 the future minimum
lease payments under non- cancellable period which is not later than
one year are Rs. 58.64 lacs (2011-12 Nil).
ii) Lease rent charged to the Statement of Profit & Loss relating to
operating leases entered or renewed after April 1, 2001 are Rs. 448.85
lacs (2011-12 - Rs. 447.66 lacs).
9. A Petition filed by a shareholder before the Hon''ble Company Law
Board (CLB) u/s 397/398 of the Companies Act in November 2007,
challenging the preferential issue of equity warrants by the Company,
is pending.
10. The Company had in earlier year accounted for cane purchases for
crushing season 2007-08 at a price of Rs. 110 per qtl in terms of the
interim Order passed by the Hon''ble Supreme Court as against the State
Advised Price of Rs. 125 per qtl. Pursuant to Hon''ble Supreme Court''s
Order dated 17.1.2012, the differential cane price liability of Rs.
1875.06 lacs has been accounted for during 2011-12 under exceptional
item.
11. Employee benefits
a) Defined contribution plans
Rs. 512.86 lacs (2011-12 - Rs. 480.60 lacs) for provident fund
contribution and Rs. 186.09 lacs {2011-12 - Rs. 133.92 lacs) for
superannuation fund contribution have been charged to the statement of
profit and loss account. The contributions towards these schemes are at
rates specified in the rules of the schemes. In case of provident fund
administered through a trust, shortfall if any, shall be made good by
the Company.
b) Defined benefit plans
i) Liability for gratuity, privilege leaves and medical leaves is
determined on actuarial basis. Gratuity liability is provided to the
extent not covered by the funds available in the gratuity fund.
ii) Gratuity Scheme provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination of
employment. Vesting occurs upon completion of five years of service,
except death while in employment.
12. Previous year''s figures have been regrouped/ recast wherever
necessary to correspond with the current year''s classification/
disclosures.
Mar 31, 2012
I. Debentures
Nil (2010-11 - 8,98,000) privately placed 12.50% secured redeemable non
convertible debentures of Rs.100 each allotted w.e.f. June 18, 2001,
redeemable at par in 26 equal quarterly instalments commencing from
April 15, 2005. The instalments due for redemption have been redeemed.
These debentures were secured by a first mortgage over all the
immovable properties and a first charge by way of hypothecation of all
the movable properties of the Company excluding all assets of Daurala
Organics, a unit of the Company, both present and future (save and
except book debts), subject to prior charges created / to be created in
favour of the Company's bankers for securing borrowings for working
capital requirements, the charges ranking pari-passu with the mortgages
and charges created / to be created in favour of existing first charge
holders for their respective term loans/debentures. These debentures
were also secured by second charge on current assets of the Company
excluding those of Daurala Organics, a unit of the Company.
II. Banks
a) Nil (2010-11 - 125.00 lacs), Rs.60.74 lacs (2010-11 - Rs.182.74
lacs), Rs.777.68 lacs (2010-11 - Rs.1222.16 lacs), Rs.700.00 lacs
(2010-11 - Rs.1500 lacs), Rs.1857.00 lacs (2010-11 - Rs.2000.00 lacs),
Rs.1800.00 lacs (2010-11 - Rs.2000.00 lacs) and Rs.2500.00 lacs
(2010-11 - Nil) currently carrying interest between 12% to 14.50% and
repayable in 0, 2, 7, 4, 13, 9 and 16 quarterly instalments
respectively are secured by a first mortgage and charge on all the
immovable and movable properties of the Company excluding all assets of
Daurala Organics, a unit of the Company, subject to prior charges
created / to be created in favour of the Company's bankers for securing
the borrowings for working capital requirements, the charges ranking
pari-passu with the charges created/to be created in favour of existing
first charge holders for their respective term loans / debentures.
b) Rs.1083.64 lacs (2010-11 - Nil) carrying interest of 12.50% and
repayable in 17 quarterly instalments is secured by first pari-passu
charge on entire fixed assets of the Company, both present and future,
excluding the assets exclusively charged and those pertaining to
Daurala Organics, a unit of the Company, subject to prior charges
created / to be created in favour of the Company's bankers for securing
the borrowings for working capital requirements, the charges ranking
pari-passu with the charges created / to be created in favour of
existing first charge holders for their respective term loans /
debentures. Also exclusive charge on assets to be acquired in Daurala
Organics, a unit of the Company.
c) Rs.183.40 lacs (2010-11 - Rs.366.72 lacs), Rs.114.22 lacs (2010-11 -
Rs.205.90 lacs), Rs.570.00 lacs (2010-11 - Rs.300.00 lacs) and
Rs.465.00 lacs (2010-11 - Nil) currently carrying interest between 8.75
% to 13.25% (net of interest subvention) and repayable in 4, 5, 19 and
20 quarterly instalments respectively are secured by first charge on
specific movable assets of Shriram Rayons, a unit of the Company.
d) Rs.382.11 lacs (2010-11 - Rs.446.92 lacs) currently carrying
interest of 8.50% (net of interest subvention) repayable in 14
quarterly instalments is secured by first mortgage and charge on
specific immovable and movable assets of Shriram Rayons, a unit of the
Company.
e) Rs.441.00 lacs (2010-11 - Rs.561.00 lacs) currently carrying
interest of 14.25% and repayable in 15 quarterly instalments is secured
by a first mortgage and charge on all the immovable and movable
properties (save and except book debts) of Daurala Organics, a unit of
the Company, subject to prior charges created / to be created in favour
of the Company's bankers for securing the borrowings for working
capital requirements, the charges ranking pari-passu with the charges
created/to be created in favour of existing first charge holders for
their respective term loans.
f) Rs.32.13 lacs (2010-11 - Rs.962.47 lacs) carrying Nil rate of
interest (net of interest subvention) and repayable in 2 monthly
instalments is secured by residual charge on fixed assets of sugar
division of the Company.
g) Rs.2.53 lacs (2010-11 - Rs.7.19 lacs) carrying interest between 10%
to 13% and repayable in 14 monthly instalments are secured by
hypothecation of specific assets.
III. Others
a) Nil (2010-11 - Rs.139.72 lacs) was secured by a first mortgage and
charge on all the immovable and movable properties of the Company
excluding all assets of Daurala Organics, a unit of the Company,
subject to prior charges created / to be created in favour of the
Company's bankers for securing the borrowings for working capital
requirements, the charges ranking pari-passu with the charges
created/to be created in favour of existing first charge holders for
their respective term loans / debentures. This was further secured by
second charge on current assets of the Company excluding those of
Daurala Organics, a unit of the Company.
b) Rs.1804.94 lacs (2010-11 - Rs.1804.94 lacs) carrying interest of 4%
and repayable in 5 yearly instalments is secured by exclusive second
charge on immovable and movable assets of sugar factory at Daurala
Sugar Works, a unit of the Company.
1. a) Pursuant to the Scheme of Arrangement as approved by the High
Court of Delhi vide its Order dated April 16, 1990 under sections 391 /
394 of the Companies Act, 1956, assets and liabilities relating to
certain units, and certain reserves of the undivided DCM Limited were
transferred / allocated to the Company w.e.f. April 1, 1990, being the
effective date. The excess of net assets acquired over the share
capital and reserves had been transferred to the securities premium
account.
b) There are various issues relating to sales tax, income-tax,
interest, etc. arisen / arising out of the reorganisation arrangement
which will be settled and accounted for in terms of the Scheme of
Arrangement of DCM Limited as and when the liabilities / benefits are
finally determined. The ultimate effect of these is not ascertainable
at this stage.
As at As at
31.03.2012 31.03.2011
2. Contingent liabilities not
provided for :- (Rs. lacs) (Rs. lacs)
Income tax matters* 1661.60 193.40
Excise / Service tax / Customs
duty matters* 734.79 928.61
Claims against the Company not
acknowledged as
debts (excluding claims by employees,
where amount is not ascertainable)* 1025.54 1088.51
Bills discounted 2336.53 1422.50
* Matters are subject to legal proceedings in the ordinary course of
business. The legal proceedings, when ultimately concluded will not, in
the opinion of the management, have a material effect on the results of
the operations or financial position.
3. a) Estimated amount of contracts remaining to be executed on
capital account and not provided for (net of advances) is Rs.104.02
lacs (2010-11-Rs.177.83 lacs).
b) The Company has other commitments, for purchase / sales orders which
are issued after considering requirements per operating cycle for
purchase / sale of goods and services, employee's benefits including
union agreement in normal course of business. The Company does not
have any long term commitments or material non-cancellable contractual
commitments / contracts, which might have material impact on the
financial statements.
4. Due to loss suffered in the year 2011-12, remuneration paid to one
of the managerial personnel for the said year as minimum remuneration,
has exceeded by Rs. 8.07 lacs and the same is subject to the approval
of the shareholders at the ensuing Annual General Meeting as required
under para 1(B) of part II of Section II of Schedule XIII to the Act.
5. Research and development expenses amounting to Rs. 90.52 lacs
(2010-11 - Rs. 29.65 lacs) have been charged to the respective revenue
accounts. Capital expenditure relating to research and development
amounting to Rs. 28.32 lacs (2010-11 - Rs. 14.65 lacs) has been
included in fixed assets.
6. Parties covered under "The Micro, Small and Medium Enterprise
Development Act, 2006" (MSMED Act, 2006) have been identified on the
basis of confirmation received.
Based upon the information available, the balance due to the Micro and
Small Enterprises as defined under the MSMED Act, 2006 is Nil (2010-11
- Rs. 1.93 lacs). Further no interest during the year has been paid or
payable under the terms of the MSMED Act, 2006.
7. Segment reporting
A. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17
"Segment Reporting" as notified under the Companies (Accounting
Standards) Rules, 2006, the Company's business segments are Sugar
(comprising sugar, power and molasses based alcohols), Industrial
Fibres and related products (comprising rayon, synthetic yarn, cord,
fabric etc.) and Chemicals (comprising Organics & fine Chemicals).
B. Geographical segments
The Company's geographical segments are Domestic and Overseas, by
location of customers.
C. Segment accounting policies
In addition to the significant accounting policies applicable to the
segments as set out in note 1 of notes forming part of the financial
statements, the accounting policies in relation to segment accounting
are as under :-
i) Segment assets and liabilities
Segment assets include all operating assets used by a segment and
consist principally of operating cash, debtors, inventories and fixed
assets, net of allowances and provisions which are reported as direct
offsets in the balance sheet. Segment liabilities include all operating
liabilities and consist principally of creditors and accrued
liabilities. Segment assets and liabilities do not include investments,
share capital, reserves and surplus, loan funds, income tax - current
and deferred and certain other assets and liabilities not allocable to
the segments on a reasonable basis. While most of the
assets/liabilities can be directly attributed to individual segments,
the carrying amount of certain assets/liabilities allocable to two or
more segments are allocated to the segments on a reasonable basis.
ii) Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a
reasonable basis. All other segment revenue and expenses are directly
attributable to the segment.
iii) Unallocated expenses
Unallocated expenses represent general administrative expenses,
head-office expenses and other expenses that arise at the Company level
and relate to the Company as a whole. As such, these expenses have not
been considered in arriving at the segment results.
iv) Inter segment sales
Inter segment sales between operating segments are accounted for at
market price. These transactions are eliminated in consolidation.
8. Related party disclosures under Accounting Standard (AS)18 A.
Names of related party and nature of related party relationship
Subsidiary : Daurala Foods & Beverages Private Limited (DFBPL)
Associate : DCM Hyundai Limited (DHL).
Key management personnel : Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr.
D.C. Mittal, Mr. Madhav B. Shriram, Mr. G. Kumar (upto 31/01/11) and
Mr. Anil Gujral (w.e.f. 1/02/11).
Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs.
Kiran Mittal, Mr. Akshay Dhar, Ms. Kanika Shriram (w.e.f. 3/10/11),
M/s. Bansi Dhar & Sons - HUF (BDS), Mrs. Divya Shriram, Ms. Aditi Dhar
and Ms. Ritu Bansal.
Others (Enterprises over which key management personnel or their
relatives are able to exercise significant influence) : Bantam
Enterprises Private Limited (BEPL) and H.R. Travels Private Limited
(HRTPL).
* Does not include provision for leave salary and contribution /
provision towards gratuity, since the contribution /provision is made
for the Company as a whole on actuarial basis.
# Refer note 34
9. The Company does not have any Finance Lease. Disclosures in
respect of assets taken on Operating Lease under Accounting Standard
(AS) 19 "Leases" are as under :
i) The Company generally enters into cancellable operating leases for
office premises and residence of its employees, normally renewable on
expiry.
ii) Lease rent charged to the profit and loss account relating to
operating leases entered or renewed after April 1, 2001 is Rs. 447.66
lacs (2010-11 - Rs. 419.51 lacs).
10. A Petition filed by a shareholder before the Hon'ble Company Law
Board (CLB) u/s 397/398 of the Companies Act in November 2007,
challenging the preferential issue of equity warrants by the Company,
is pending.
11. The Company had in earlier year accounted for cane purchases for
crushing season 2007-08 at a price of Rs. 110 per qtl in terms of the
interim Order passed by the Hon'ble Supreme Court as against the State
Advised Price of Rs. 125 per qtl. Pursuant to Hon'ble Supreme Cout's
Order dated 17.1.2012, the differential cane price liability of Rs.
1875.06 lacs has been accounted for during the year under exceptional
item.
12. Employee benefits
a) Defined contribution plans
Rs. 480.60 lacs (2010-11 - Rs. 477.80 lacs) for provident fund
contribution and Rs. 133.92 lacs (2010-11 - Rs. 166.58 lacs) for
superannuation fund contribution have been charged to the statement of
profit and loss account. The contributions towards these schemes are at
rates specified in the rules of the schemes. In case of provident fund
administered through a trust, shortfall if any, shall be made good by
the Company.
b) Defined benefit plans
i) Liability for gratuity, privilege leaves and medical leaves is
determined on actuarial basis. Gratuity liability is provided to the
extent not covered by the funds available in the gratuity fund.
ii) Gratuity Scheme provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination of
employment. Vesting occurs upon completion of five years of service,
except death while in employment.
13. The Revised Schedule - VI has become effective from April 1, 2011
for the preparation of financial statements. Pursuant to the same, the
required changes in presentation and disclosures have been incorporated
in these financial statements. Previous year's figures have been
regrouped / reclassified wherever necessary to correspond with the
current year's classification / disclosures.
Mar 31, 2011
1. a) Pursuant to the Scheme of Arrangement as approved by the High
Court of Delhi vide its Order dated April 16, 1990 under sections 391 /
394 of the Companies Act, 1956, assets and liabilities relating to
certain units, and certain reserves of the undivided DCM Limited were
transferred /allocated to the Company w.e.f. April 1, 1990, being the
effective date. The excess of net assets acquired over the share
capital and reserves had been transferred to the share premium account.
b) There are various issues relating to sales tax, income-tax,
interest, etc. arisen / arising out of the reorganisation arrangement
which will be settled and accounted for in terms of the Scheme of
Arrangement of DCM Limited as and when the liabilities / benefits are
fnally determined. The ultimate effect of these is not ascertainable at
this stage.
As at As at
31.03.2011 31.03.2010
2. Contingent liabilities not
provided for:- (Rs. lacs) (Rs. lacs) Income
tax matters* 193.40 210.22
Excise / Service tax / Customs Duty
matters* 928.61 698.39
Claims against the Company not
acknowledged as debts (excluding claims
by employees, where amount is not
ascertainable)* 1088.51 1000.34
Bills discounted 1422.50 2540.73
* Matters are subject to legal proceedings in the ordinary course of
business. The legal proceedings, when ultimately concluded will not, in
the opinion of the management, have a material effect on the results of
the operations or financial position.
3. Research and development expenses amounting to Rs. 29.65 lacs
(2009-10 - Rs. 33.53 lacs) have been charged to the respective revenue
accounts. Capital expenditure relating to research and development
amounting to Rs. 14.65 lacs (2009-10 Ã Nil) has been included in fixed
assets.
4. Parties covered under "The Micro, Small and Medium Enterprise
Development Act, 2006" (MSMED Act, 2006) have been identifed on the
basis of confrmation received.
Based upon the information available, the balance due to the Micro and
Small Enterprises as Defined under the MSMED Act, 2006 is Rs. 1.93 lacs
(2009-10 Nil). Further no interest during the year has been paid or
payable under the terms of the MSMED Act, 2006.
5. Segment reporting
A. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17
"Segment Reporting" as notifed under the Companies (Accounting
Standards) Rules, 2006, the Companys business segments are Sugar
(comprising sugar, power and molasses based alcohols), Industrial
Fibres and related products (comprising rayon, synthetic yarn, cord,
fabric etc.) and Chemicals (comprising Organics & fne Chemicals).
B. Geographical segments
The Companys geographical segments are Domestic and Overseas, by
location of customers.
C. Segment accounting policies
In addition to the signifcant accounting policies applicable to the
segments as set out in note 1 of schedule 11 "Notes to the Accounts",
the accounting policies in relation to segment accounting are as under
:-
i) Segment assets and liabilities
Segment assets include all operating assets used by a segment and
consist principally of operating cash, debtors, inventories and fixed
assets, net of allowances and provisions which are reported as direct
offsets in the balance sheet. Segment liabilities include all operating
liabilities and consist principally of creditors and accrued
liabilities. Segment assets and liabilities do not include investments,
share capital, reserves and surplus, loan funds, income tax- current
and deferred and certain other assets and liabilities not allocable to
the segments on a reasonable basis. While most of the
assets/liabilities can be directly attributed to individual segments,
the carrying amount of certain assets/liabilities to two or more
segments are allocated to the segments on a reasonable basis.
ii) Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a
reasonable basis. All other segment revenue and expenses are directly
attributable to the segment.
iii) Unallocated expenses
Unallocated expenses represent general administrative expenses,
head-office expenses and other expenses that arise at the Company level
and relate to the Company as a whole. As such, these expenses have not
been considered in arriving at the segment results.
iv) Inter segment sales
Inter segment sales between operating segments are accounted for at
market price. These transactions are eliminated in consolidation.
6. Related party disclosures under Accounting Standard (AS)18 A.
Names of related party and nature of related party relationship
Subsidiary : Daurala Foods & Beverages Pvt. Ltd. (DFBPL)
Associate : DCM Hyundai Ltd. (DHL)
Key management personnel :
Mr. Tilak Dhar,
Mr. Alok B. Shriram,
Mr. D.C. Mittal,
Mr. Madhav B. Shriram,
Mr. G. Kumar (upto 31/01/11) and
Mr. Anil Gujral (w.e.f. 1/02/11).
Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs.
Kiran Mittal, Mr. Akshay Dhar and M/s. Bansi Dhar & Sons - HUF (BDS).
Others (Enterprise over which key management personnel or their
relatives are able to exercise signifcant infuence) : Bantam
Enterprises Pvt. Ltd. (BEPL) and H.R. Travels Pvt. Ltd. (HRTPL).
11. Disclosures in respect of assets taken on lease under Accounting
Standard (AS) 19 "Leases".
A. Finance Lease
i) For motor vehicles and plant and machinery taken under fnance lease
arrangements, the ownership will be transferred to the Company at the
end of the fnance lease term.
B. Operating Lease
i) The Company generally enters into cancellable operating leases for
office premises and residence of its employees, normally renewable on
expiry.
ii) Lease rent charged to the Profit and loss account relating to
operating leases entered or renewed after April 1, 2001 are Rs. 419.51
lacs (2009-10 - Rs. 401.34 lacs).
7. A Petition fled by a shareholder before the Honble Company Law
Board under Section 397 / 398 of the Companies Act in November 2007,
challenging the preferential issue of equity warrants by the Company,
is pending. The same shareholder also fled a Civil Suit challenging
some of the items in the Agenda for the Annual General Meeting (AGM)
held on 25.9.2008 before the Honble Delhi High Court. The said Suit
was dismissed by the Honble Delhi High Court by its Order dated
25.8.2009. Subsequently, the shareholder fled an appeal against the
Order before the Division Bench. The Division Bench by its Order dated
25.5.2010 declined to interfere with the Order of the learned Single
Judge
8. The Company has accounted for cane purchases for crushing season
2007-08 at a price of Rs. 110 per qtl in terms of the interim Order
passed by the Honble Allahabad High Court. Subsequently the Honble
High Court passed fnal Order directing sugar mills to pay State Advised
Price at Rs 125 per qtl. Appeal against the Order of the Honble High
Court has been fled with the Honble Supreme Court which has directed
to pay Rs. 110 per qtl as interim arrangement. Necessary adjustments,
if any, will be made in accordance with the fnal Order of the Honble
Supreme Court
9. Employee benefits
a) Defined contribution plans
Rs. 477.80 lacs (previous year Rs. 397.72 lacs) for provident fund
contribution and Rs. 166.58 lacs (previous year Rs. 155.91 lacs) for
superannuation contribution have been charged to the Profit and loss
account. The contributions towards these schemes are at rates specifed
in the rules of the schemes. In case of Provident Fund administered
through a trust, shortfall if any, shall be made good by the Company
b) Defined benefit plans
i) Liability for gratuity, Privilege leaves and Medical leaves is
determined on actuarial basis. Gratuity liability is provided to the
extent not covered by the funds available in the gratuity fund
ii) Gratuity Scheme provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination of
employment. Vesting occurs upon completion of fve years of service,
except death while in employment
10. The Company had impaired certain plant & machinery in the previous
year based on net realizable value of such assets determined by an
independent valuer. The impairment loss was recognised at Rs. 127.14
lacs out of which Rs. 27.99 lacs was adjusted from revaluation reserve
being revaluation amount included in carrying value of these assets and
the resultant loss (Gross - Rs. 99.15 lacs, net of deferred taxes Rs.
66.21 lacs) was included in Schedule 9- Manufacturing and Other
Expenses
11. Previous year figures have been regrouped / recast, wherever
necessary
12. Schedules 1 to 11 and the statement of additional information form
an integral part of the balance sheet and Profit and loss account.
Mar 31, 2010
1.a) Pursuant to the Scheme of Arrangement as approved by the High Court
of Delhi vide its Order dated April 16, 1990 under sections 391 / 394
of the Companies Act, 1956, assets and liabilities relating to certain
units, and certain reserves of the undivided DCM Limited were
transferred / allocated to the Company w.e.f. April 1,1990, being the
effective date. The excess of net assets acquired over the share
capital and reserves had been transferred to the share premium account.
b) There are various issues relating to sales tax, income-tax,
interest, etc. arisen / arising out of the reorganisation arrangement
which will be settled and accounted for in terms of the Scheme of
Arrangement of DCM Limited as and when the liabilities / benefits are
finally determined. The ultimate effect of these is not ascertainable
at this stage.
As at As at
31.03.2010 31.03.2009
Contingent liabilities not provided for:- (Rs. lacs) (Rs. lacs)
Income tax matters* 210.22 196.70
Excise / Service tax / Customs Duty matters* 698.39 665.93
Claims against the Company not acknowledged as debts
(excluding claims by employees, where amount
is not ascertainable)* 1000.34 842.95
Bills discounted 2540.73 1718.04
* Matters are subject to legal proceedings in the ordinary course of
business. The legal proceedings, when ultimately concluded will not, in
the opinion of the management, have a material effect on the results of
the operations or financial position.
3. Research and development expenses amounting to Rs. 33.53 lacs
(2008-09 - Rs. 45.77 lacs) have been charged to the respective revenue
accounts.
4. Parties covered under The Micro, Small and Medium Enterprise
Development Act, 2006" (MSMED Act, 2006) have been identified on the
basis of confirmation received.
Based upon the information available, the balance due to the Micro and
Small Enterprises as defined under the MSMED Act, 2006 is nil. Further
no interest during the year has been paid or payable under the terms of
the MSMED Act, 2006.
5. Segment reporting
A. Business segments
Based on the guiding principles given in Accounting Standard (AS) 17
"Segment Reporting" as notified under the Companies (Accounting
Standards) Rules, 2006, the Companys business segments are Sugar
(comprising sugar, power and molasses based alcohols), Industrial
Fibres and related products (comprising rayon, synthetic yarn, cord,
fabric etc.) and Chemicals (comprising Organics & fine Chemicals).
B. Geographical segments
The Companys geographical segments are Domestic and Overseas, by
location of customers.
C. Segment accounting policies
In addition to the significant accounting policies applicable to the
segments as set out in note 1 of schedule 11 "Notes to the Accounts",
the accounting policies in relation to segment accounting are as under
:-
i) Segment assets and liabilities
Segment assets include all operating assets used by a segment and
consist principally of operating cash, debtors, inventories and fixed
assets, net of allowances and provisions which are reported as direct
offsets in the balance sheet. Segment liabilities include all operating
liabilities and consist principally of creditors and accrued
liabilities. Segment assets and liabilities do not include investments,
share capital, reserves and surplus, loan funds, income tax - current
and deferred and certain other assets and liabilities not allocable to
the segments on a reasonable basis. While most of the
assets/liabilities can be directly attributed to individual segments,
the carrying amount of certain assets/liabilities to two or more
segments are allocated to the segments on a reasonable basis.
ii) Segment revenue and expenses
Joint revenue and expenses of segments are allocated amongst them on a
reasonable basis. All other segment revenue and expenses are directly
attributable to the segment.
iii) Unallocated expenses
Unallocated expenses represent general administrative expenses,
head-office expenses and other expenses that arise at the Company level
and relate to the Company as a whole. As such, these expenses have not
been considered in arriving at the segment results.
iv) Inter segment sales
Inter segment sales between operating segments are accounted for at
market price. These transactions are eliminated in consolidation.
6. Related party disclosures under Accounting Standard (AS)18
A. Names of related party and nature of related party relationship
Subsidiary : Daurala Foods & Beverages Pvt. Ltd. (DFBPL)
Associates : DCM Hyundai Ltd. (DHL).
Key management personnel: Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr. D.C.
Mittal, Mr. Madhav B. Shriram and Mr. G. Kumar.
Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs.
Kiran Mittal, Mrs. Manju Kumar, Mr. Akshay Dhar and M/s. Bansi Dhar &
Sons - HUF (BDS).
Others (Enterprise over which key management personnel or their
relatives are able to exercise significant influence): Hindustan Vacuum
Glass Pvt. Ltd. (HVGPL) and Bantam Enterprises Pvt. Ltd. (BEPL).
B. Transactions with related parties referred to in 10 (A) i)
Transactions with subsidiary and associates
B. Operating Lease
i) The Company generally enters into cancellable operating leases for
office premises and residence of its employees, normally renewable on
expiry.
ii) Lease rent charged to the profit and loss account relating to
operating leases entered or renewed after April 1, 2001 are Rs. 401.34
lacs (2008-09 - Rs. 447.63 lacs).
7. A Petition filed by a shareholder before the Honble Company Law
Board under Section 397 / 398 of the Companies Act in November 2007,
challenging the preferential issue of equity warrants by the Company,
is pending. The same shareholder also filed a Civil Suit challenging
some of the items in the Agenda for the Annual General Meeting (AGM)
held on 25.9.2008 before the Honble Delhi High Court. The said Suit
was dismissed by the Honble Delhi High Court by its Order dated
25.8.2009. Subsequently, the shareholder filed an appeal against the
Order before the Division Bench. The Division Bench by its Order dated
25.5.2010 declined to interfere with the Order of the learned Single
Judge.
8. The Company has accounted for cane purchases for crushing season
2007-08 at a price of Rs. 110 per qtl in terms of the interim Order
passed by the Honble Allahabad High Court. Subsequently the Honble
High Court passed final Order directing sugar mills to pay State
Advised Price at Rs. 125 per qtl. Appeal against the Order of the
Honble High Court has been filed with the Honble Supreme Court which
has directed to pay Rs. 110 per qtl as interim arrangement. Necessary
adjustments, if any, will be made in accordance with the final Order of
the Honble Supreme Court.
9. Employee benefits
a) Defined contribution plans
Rs. 397.72 lacs (previous year Rs. 364.65 lacs) for provident fund
contribution and Rs. 155.91 lacs (previous year Rs. 137.91 lacs) for
superannuation contribution have been charged to the profit and loss
account. The contributions towards these schemes are at rates specified
in the rules of the schemes. In case of Provident Fund administered
through a trust, shortfall if any, shall be made good by the Company.
b) Defined benefit plans
i) Liability for gratuity, Privilege leaves and Medical leaves is
determined on actuarial basis. Gratuity liability is provided to the
extent not covered by the funds available in the gratuity fund.
ii) Gratuity Scheme provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination of
employment. Vesting occurs upon completion of five years of service,
except death while in employment.
10. The Company has impaired certain plant & machinery based on net
realizable value of such assets determined by an independent valuer.
The impairment loss has been recognised at Rs. 127.14 lacs out of which
Rs. 27.99 lacs has been adjusted from revaluation reserve being
revaluation amount included in carrying value of these assets and the
resultant loss (Gross - Rs. 99.15 lacs, net of deferred taxes Rs. 66.21
lacs) has been included in Schedule 9- Manufacturing and Other
Expenses.
11. Previous year figures have been regrouped / recast, wherever
necessary.