Mar 31, 2016
*The Company has transferred the unpaid/unclaimed dividend of Rs,5.04 Lakhs for the year 2007-08 to the Investor Education Protection Fund of the Central Government.
* Note - 1) During the previous year the Company adopted Schedule II of the Companies, Act, 2013, as a result of this adoption Rs,18.61 lakhs was adjusted with general reserve in the previous year.
2) The above Plant, Equipment and Building is situated as part of factory which the Company has taken on operating lease.
Corporate information
Parrys Sugar Industries Limited (PSIL) is carrying on the business of manufacture of sugar and cogeneration of power. PSIL is a subsidiary of E.I.D.- Parry (India) Ltd., one of the fastest growing organizations in India. PSIL''s sugar factory is located at Ramdurg, Belgaum District, Karnataka State having a capacity to crush 4,000 Tonnes of Cane per day and 13 MW of Power.
25. SIGNIFICANT ACCOUNTING POLICIES
25.1 (a) Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
(b) Going Concern
The financial statements of Parrys Sugar Industries Limited have been prepared on a going concern basis, which has been based on continued financial support from the holding company E.I.D.- Parry (India ) Ltd.
25.2 use of Estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.
25.3 Inventories
(i) Inventories other than by products are valued at the lower of cost determined on weighted average basis and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.
(ii) Inventories of by-products are valued at estimated net realizable value.
25.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
25.5 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
25.6 Depreciation and amortization
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:
Plant and Machinery (Continuous Process) 18 years Vehicles
a) Motor cycle 4 years
b) Motor Cars 4 years
(i) In respect of additions and deletions during the year, depreciation charge is provided on pro-rata basis.
(ii) Leased assets are depreciated on the remaining period of lease or as per the useful life prescribed in Schedule II of the Companies Act, 2013 whichever is earlier.
(iii) Leased assets are fully depreciated over the primary lease period.
(iv) Intangible assets are amortized over their estimated useful life on straight line method as follows:
Software - Over the license period
(v) Assets costing individually Rs,5000 or less are fully depreciated in the year of addition.
The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.
25.7 Revenue Recognition
(i) Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.
(ii) Income from services rendered is recognized as and when services are rendered based on agreements/arrangements with the concerned parties.
(iii) Export Incentive under Duty Entitlement Pass Book Scheme are treated as income in the year of export at the estimated realizable value. - Duty Draw back
(iv) Interest income is accounted on accrual basis.
(v) Dividend income is accounted when the right to receive the dividend is established.
25.8 Fixed Assets
Tangible Fixed Assets (other than those which have been revalued) are carried at cost less accumulated depreciation / amortization and impairment losses, if any. The cost of fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure on fixed assets after its purchase / completion is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance. Intangible Assets are stated at cost of acquisition less accumulated amortization.
Leasehold land and leasehold improvements are amortized over the primary period of lease.
Capital Work in Progress: Projects under which tangible fixed assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
25.9 Foreign Currency transactions
Initial Recognition: Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.
Measurement on Balance Sheet date: Foreign currency monetary items of the Company, outstanding at the balance sheet date are restated at the year-end rates. Non-monetary items of the Company are carried at historical cost.
Settlement : Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.
Forward Contracts : Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortized over the period of the contracts if such contracts relate to monetary items as at the balance sheet date. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense in the period in which such cancellation or renewal is made.
25.10 Investments
Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties.
25.11 Employee benefits
Employee benefits include provident fund, gratuity fund, compensated absences, long service awards.
(a) defined contribution plans
The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
(b) defined benefit plans
For defined benefit plans in the form of gratuity fund and the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.
(c) Short term Employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
The cost of short-term compensated absences is accounted as under :
(i) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and
(ii) in case of non-accumulating compensated absences, when the absences occur.
(d) Long term Employee benefits :
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.
25.12 borrowing costs
Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.
25.13 Segment reporting :
The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the Executive Management in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue/expenses/assets/liabilities"
25.14 Leases
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the less or are recognized as operating leases. Lease rentals under Operating leases are recognized in the Statement of Profit and Loss in the time pattern of the user benefit basis.
25.15 Earnings per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
25.16 taxes on Income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their reliability.
25.17 Insurance claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
25.18 Impairment of Assets
The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists.
If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.
The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.
25.19 Provisions and Contingencies
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognized in the financial statements.
25.20 Service tax input credit
Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilizing the credits.
25.21 Operating Cycle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
Mar 31, 2015
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
2013 Act ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as
applicable. The financial statements have been prepared on accrual
basis under the historical cost convention. The accounting policies
adopted in the preparation of the financial statements are consistent
with those followed in the previous year except for change in
accounting policy for depreciation.
1.2 use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known/materialise.
1.3 Inventories
(i) Inventories other than by products are valued at the lower of cost
determined on weighted average basis and the net realisable value after
providing for obsolescence and other losses, where considered
necessary. Cost includes all charges in bringing the goods to the point
of sale, including octroi and other levies, transit insurance and
receiving charges. Work-in-progress and finished goods include
appropriate proportion of overheads and, where applicable, excise duty.
(ii) Inventories of by-products are valued at estimated net realisable
value.
1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.5 Cash flow statement
Cash flows are reported using the indirect method, whereby
profit/(loss) before extraordinary items and tax is adjusted for the
effects of transactions of non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flows
from operating, investing and financing activities of the Company are
segregated based on the available information.
25.6 Depreciation and amortisation
Depreciable amount for assets is the cost of an asset, or other amount
substituted for cost, less its estimated residual value Depreciation on
tangible fixed assets has been provided on the straight-line method as
per the useful life prescribed in Schedule II to the Companies Act,
2013 except in respect of the following categories of assets, in whose
case the life of the assets has been assessed as under based on
technical advice, taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset,
past history of replacement, anticipated technological changes,
manufacturers warranties and maintenance support, etc.:
Plant and Machinery (Continuous Process) 18 years Vehicles
a) Motor cycle 4 years
b) Motor Cars 4 years
(i) In respect of additions and deletions during the year, depreciation
charge is provided on pro-rata basis.
(ii) Leased assets are depreciated on the remaining period of lease or
as per the useful life prescribed in schedule II of the Companies Act,
2013 whichever is earlier.
(iii) Leased assets are fully depreciated over the primary lease
period.
(iv) Intangible assets are amortised over their estimated useful life
on straight line method as follows:
Software - Over the license period
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortisation period is revised to reflect the changed pattern, if any.
1.7 Revenue Recognition
(i) Sales are recognised, net of returns and trade discounts, on
transfer of significant risks and rewards of ownership to the buyer,
which generally coincides with the delivery of goods to customers.
Sales include excise duty but exclude sales tax and value added tax.
(ii) Income from services rendered is recognised as and when services
are rendered based on agreements/arrangements with the concerned
parties.
(iii) Export Incentive under Duty Entitlement Pass Book Scheme are
treated as income in the year of export at the estimated realisable
value.
(iv) Interest income is accounted on accrual basis.
(v) Dividend income is accounted when the right to receive the dividend
is established.
1.8 Fixed Assets : -
Tangible Fixed Assets (other than those which have been revalued) are
carried at cost less accumulated depreciation / amortisation and
impairment losses, if any. The cost of fixed assets comprises its
purchase price net of any trade discounts and rebates, any import
duties and other taxes (other than those subsequently recoverable from
the tax authorities), any directly attributable expenditure on making
the asset ready for its intended use, other incidental expenses and
interest on borrowings attributable to acquisition of qualifying fixed
assets up to the date the asset is ready for its intended use.
Machinery spares which can be used only in connection with an item of
fixed asset and whose use is expected to be irregular are capitalised
and depreciated over the useful life of the principal item of the
relevant assets. Subsequent expenditure on fixed assets after its
purchase / completion is capitalised only if such expenditure results
in an increase in the future benefits from such asset beyond its
previously assessed standard of performance. Intangible Assets are
stated at cost of acquisition less accumulated amortisation.
Leasehold land and leasehold improvements are amortised over the
primary period of lease.
Capital Work-in-Progress: Projects under which tangible fixed assets
are not ready for their intended use and other capital work-in-progress
are carried at cost, comprising direct cost, related incidental
expenses and attributable interest.
1.9 Foreign Currency Transactions
Initial Recognition: Transactions in foreign currencies entered into by
the Company are accounted at the exchange rates prevailing on the date
of the transaction or at rates that closely approximate the rate at the
date of the transaction.
Measurement on Balance Sheet date: Foreign currency monetary items of
the Company, outstanding at the balance sheet date are restated at the
year-end rates. Non-monetary items of the Company are carried at
historical cost.
Settlement : Exchange differences arising on settlement/restatement of
foreign currency monetary assets and liabilities of the Company are
recognised as income or expense in the Statement of Profit and Loss.
Forward Contracts : Premium/discount on forward exchange contracts,
which are not intended for trading or speculation purposes, are
amortised over the period of the contracts if such contracts relate to
monetary items as at the balance sheet date. Any profit or loss arising
on cancellation or renewal of such a forward exchange contract is
recognised as income or as expense in the period in which such
cancellation or renewal is made.
1.10 Investments
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments includes acquisition charges such as
brokerage, fees and duties.
1.11 Employee Benefits
Employee benefits include provident fund, gratuity fund, compensated
absences, long service awards.
(a) Defined contribution plans
The Company's contribution to provident fund are considered as defined
contribution plans and are charged as an expense based on the amount of
contribution required to be made and when services are rendered by the
employees.
(b) defined benefit plans
For defined benefit plans in the form of gratuity fund and the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each Balance
Sheet date. Actuarial gains and losses are recognised in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognised immediately to the extent that the benefits are already
vested and otherwise is amortised on a straight-line basis over the
average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognised past
service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus
the present value of available refunds and reductions in future
contributions to the schemes.
(c) Short-Term Employee Benefits
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are
expected to occur within twelve months after the end of the period in
which the employee renders the related service.
The cost of short-term compensated absences is accounted as under :
(i) in case of accumulated compensated absences, when employees render
the services that increase their entitlement of future compensated
absences; and
(ii) in case of non-accumulating compensated absences, when the
absences occur.
(d) Long-Term Employee Benefits :
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related service are recognised as a liability at the present value of
the defined benefit obligation as at the Balance Sheet date less the
fair value of the plan assets out of which the obligations are expected
to be settled. Long Service Awards are recognised as a liability at the
present value of the defined benefit obligation as at the Balance Sheet
date.
1.12 borrowing costs
Borrowing costs include interest, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to
construction/development of the qualifying asset upto the date of
capitalisation of such asset is added to the cost of the assets.
Capitalisation of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
1.13 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the Executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment.
Inter-segment revenue is accounted on the basis of transactions which
are primarily determined based on market/fair value factors. Revenue,
expenses, assets and liabilities which relate to the Company as a whole
and are not allocable to segments on reasonable basis have been
included under "unallocated revenue/expenses/assets/liabilities".
1.14 Leases
Lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor are recognised as
operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
1.15 Earnings per Share
Basic earnings per share is computed by dividing the profit/(loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
profit/(loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income (net of any attributable taxes) relating to the
dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have been issued
on the conversion of all dilutive potential equity shares. Potential
equity shares are deemed to be dilutive only if their conversion to
equity shares would decrease the net profit per share from continuing
ordinary operations. Potential dilutive equity shares are deemed to be
converted as at the beginning of the period, unless they have been
issued at a later date. The dilutive potential equity shares are
adjusted for the proceeds receivable had the shares been actually
issued at fair value (i.e. average market value of the outstanding
shares). Dilutive potential equity shares are determined independently
for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits/reverse share splits
and bonus shares, as appropriate.
1.16 Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income Tax Act, 1961 and other applicable tax laws.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised. However, if
there are unabsorbed depreciation and carry forward of losses and items
relating to capital losses, deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that there
will be sufficient future taxable income available to realise the
assets. Deferred tax assets and liabilities are offset if such items
relate to taxes on income levied by the same governing tax laws and the
Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each balance sheet date for their realisability.
1.17 Insurance claims
Insurance claims are accounted for on the basis of claims
admitted/expected to be admitted and to the extent that the amount
recoverable can be measured reliably and it is reasonable to expect
ultimate collection.
1.18 Impairment of Assets
The carrying values of assets/cash generating units at each balance
sheet date are reviewed for impairment if any indication of impairment
exists.
If the carrying amount of the assets exceed the estimated recoverable
amount, an impairment is recognised for such excess amount. The
impairment loss is recognised as an expense in the Statement of Profit
and Loss, unless the asset is carried at revalued amount, in which case
any impairment loss of the revalued asset is treated as a revaluation
decrease to the extent a revaluation reserve is available for that
asset.
The recoverable amount is the greater of the net selling price and
their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate
discount factor.
When there is indication that an impairment loss recognised for an
asset (other than a revalued asset) in earlier accounting periods no
longer exists or may have decreased, such reversal of impairment loss
is recognised in the Statement of Profit and Loss, to the extent the
amount was previously charged to the Statement of Profit and Loss. In
case of revalued assets such reversal is not recognised.
1.19 Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes. Contingent assets are not recognised in the
financial statements.
1.20 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is
reasonable certainty in availing/utilising the credits.
1.21 Operating Cycle
Based on the nature of products/activities of the Company and the
normal time between acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
2. SECURED LOANS
(i) Term Loan & Short term(Bridge) loan extended by State Bank of India
is primarily secured by Pari-passu first charge on fixed assets of the
Company and collaterally secured by second charge on the current assets
of the Company
(ii) SEFASU Term Loan extended by State Bank of India secured by
Pari-passu first charge on fixed assets of the Company and collaterally
secured by second charge on the current assets of the Company.
(iii) Sugar Development Fund(SDF) Loans for Cane Development &
expansion is secured by a Bank Guarantee.
(iv) Cash Credit facility extended by State Bank of India is secured by
hypothecation of entire current assets of the company and further
second charge on company's fixed assets.
The above loans extended by SDF & banks carry interest rates ranging
from 4% p.a to 12.75% p.a. The loans extended by banks are linked to
their base rate.
3. UNSECURED LOANS
(i) Loan extended by Yes Bank Ltd is unsecured in nature. It carries an
interest rate of 10.75% p.a
(ii) Commercial Paper was issued to HDFC Trustees Co Ltd- HDFC A/c
Liquid Fund at the discount rate of 9.25% p.a.
4. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) of Rs.NIL Lakhs (2014: Rs.
NIL Lakhs).
Mar 31, 2013
1.1 Basis of preparation of fnancial statements
The fnancial statements of the Company are prepared to comply in all
material aspects with the applicable accounting principles in India,
the Accounting Standards notifed under Sub-section (3C) of Section 211
of the Companies Act, 1956 (hereinafter referred as Âthe ActÂ) and
other relevant provisions of the Act.
1.2 use of estimates
The preparation of fnancial statements requires the management to make
estimates and assumptions that afect the reported balances of assets
and liabilities on the date of the fnancial statements and reported
amounts of income and expenses during the reporting period. Management
believes that the estimates used in the preparation of fnancial
statements are prudent and reasonable. Actual results could difer from
these estimates. Any revision to accounting estimates is recognised
prospectively in the current and future periods.
1.3 fixed assets
Fixed Assets are stated at cost of acquisition and subsequent
improvements thereto including taxes, duties, freight and other
incidental expenses for bringing the asset concerned to its working
condition for its intended use, less accumulated depreciation and
impairment loss. Interest on borrowings attributable to qualifying
assets are capitalised and included in the cost of fxed assets as
appropriate. Intangible assets are stated at the consideration paid for
acquisition less accumulated amortisation.
1.4 Leases
Assets acquired under Leases, where the Company has substantially all
the risks and rewards of ownership, are classifed as fnance leases.
Such leases are capitalised at the inception of the lease at lower of
the fair value or the present value of the minimum lease payments and a
liability is created for an equivalent amount. Each lease rental paid
is allocated between the liability and the interest cost, so as to
obtain a constant periodic rate of interest on the outstanding
liability for each period.
Assets acquired as leases, where a signifcant portion of the risk and
rewards of ownership are retained by the lessor, are classifed as
operating leases. Lease rentals are charged to the Statement of Proft
and Loss on accrual basis as per terms of the lease.
1.5 Borrowing costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
1.6 Depreciation and amortisation
Depreciation is provided on straight line method, pro rata to the
period of use, at the rates specifed in Schedule XIV of the Act or the
rates based on the useful lives of the assets as estimated by the
management, whichever is higher. The rates based on the useful lives of
the assets in the following categories are estimated to be higher than
those specifed in Schedule XIV of the Act:
Electrical Equipment 5.38% Telephone Equipment 6.33% Computer Software
16.67%
Leasehold assets are amortised at rate based on the remaining period of
lease or the rate specifed in Schedule XIV of the Act, whichever is
higher.
All individual assets costing Rs. 5,000/- or less are fully depreciated
in the year of purchase.
1.7 Investments
Long term investments are valued at cost. Provision is made to
recognise a decline, other than temporary, in the value of long term
investments. Current Investments are stated at lower of cost or market
value.
1.8 Inventories
a. Stock of Raw-materials is valued at lower of cost or Net Realisable
Value. The costs are, in general, determined on Weighted Average Basis.
b. Finished goods and Work-in-process: Finished goods are valued at
lower of cost or Net Realisable Value. Cost includes direct materials,
Labour and a proportion of manufacturing overheads based on normal
operating capacity. Cost also includes all duties and taxes but
excludes duties and taxes that are subsequently recoverable from taxing
authorities.
Work in process is valued at lower of cost or Net Realisable Value. The
cost is determined up to the estimated stage of process and includes
direct materials, Labour and a proportion of manufacturing overheads
based on normal operating parameters.
c. By Products: At estimated realisable value.
d. Stores and Spares: At lower of cost or Net Realisable Value. The
costs are, in general, determined on weighted average basis.
1.9 revenue recognition
Revenue is recognised when the signifcant risks and rewards of
ownership of goods have been passed on to the buyer. Sale of goods is
exclusive of sales tax and captive consumption of Molasses, Power and
Baggasse.
Dividend income is recognised in the year in which the right to receive
the payment is established.
Income from investments is recognised in the year in which it is
accrued and stated at gross of tax deducted at source.
1.10 foreign Currency transactions
All foreign currency transactions are accounted for at the exchange
rates prevailing on the date of such transactions. Liabilities/assets
in foreign currencies are reckoned in the accounts as per the following
principles:
Exchange diferences arising on reporting of long term foreign currency
monetary items at rates diferent from those at which they were
initially recorded during the period or reported in previous fnancial
statements, are accounted as below:
(a) In so far as they relate to the acquisition of depreciable capital
assets, are added to or deducted from the cost of the asset and are
depreciated over the balance life of the asset; and
(b) In other cases, the said exchange diferences are accumulated in a
ÂForeign Currency Monetary Items Translation Diference Account and
amortised over the balance period of such long term asset/liability but
not beyond March 31, 2020.
All other monetary assets and liabilities denominated in foreign
currency are restated at the rates ruling at the year end and all
exchange gains/losses arising there from are adjusted to the Statement
of Proft and Loss, except those covered by forward contracted rates
where the premium or discount arising at the inception of such forward
exchange contract is amortised as expense or income over the life of
the contract.
Exchange diferences on forward contracts are recognised in the
Statement of Proft and Loss in the reporting period in which the
exchange rates change. Any proft or loss arising on cancellation or
renewal of such forward contracts is recognised as income or expense
for the year.
For forward exchange contracts and other derivatives that are not
covered by Accounting Standard (AS) -11 ÂThe Efects of Changes in
Foreign Exchange RatesÂ, the Company follows the guidance in the
announcement of the Institute of Chartered Accountants of India (ICAI)
dated March 29, 2008, whereby for each category of derivatives, the
Company records any net mark-to-market losses. Net mark-to-market gains
are not recorded for such derivatives.
1.11 employee Benefts
a. short term employee Benefts :
Undiscounted amount of short term employee benefts expected to be paid
in exchange for the services rendered by employees is recognised during
the period when the employee renders the services. These benefts
include compensated absences such as paid annual leave and performance
incentives.
b. Defned Contribution plans:
These comprise of contributions to Employees Provident Fund with the
government and certain state plans like Employees State Insurance and
Employees Pension Scheme. The CompanyÂs payments to the defned
contribution plans are recognised as an expense during the period in
which the employees perform the services.
c. Defned Beneft plans:
Gratuity for employees is covered under a scheme of Life Insurance
Corporation of India and contributions in respect of such scheme are
recognised in the Statement of Proft and Loss. The liability as at the
Balance Sheet date is provided for based on the actuarial valuation,
based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses
comprise experience adjustments and the efect of changes in the
actuarial assumptions and are recognised immediately in the Statement
of Proft and Loss as income or expense.
d. other Long term employee Benefts :
Other Long term employee benefts comprise of Compensated absences which
are not expected to occur within twelve months after the end of the
period in which the employee renders the related services are
recognised as a liability at the present value of the defned beneft
obligation at the balance sheet date based on actuarial valuation
carried out at each balance sheet date.
1.12 earnings per share
The earnings considered in ascertaining the CompanyÂs Earnings Per
Share (EPS) comprise of the net proft after tax less dividend
(including dividend distribution tax) on preference shares. The number
of shares used for computing the basic EPS is the weighted average
number of shares outstanding during the year.
1.13 taxes on Income
Provision for income tax comprises current taxes and deferred taxes.
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing diferences between the accounting
income and the taxable income for the year and quantifed using the tax
rates and laws enacted or substantively enacted as on the Balance Sheet
date. Deferred tax assets are recognised and carried forward to the
extent that there is a reasonable/virtual certainty that sufcient
future taxable income will be available against which such deferred tax
asset can be realised.
1.14 provisions
A provision is recognised when an enterprise has a present obligation
as a result of a past event and it is probable that an outfow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions, other than employee
benefts, are not discounted to their present value and are determined
based on management estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each balance sheet date and
adjusted to refect the current management estimates.
1.15 Contingencies
Obligations which are material and whose future outcome cannot be
ascertained with reasonable certainty are treated as contingent and, to
the extent not provided for, are disclosed by way of notes on the
accounts.
1.16 Impairment of assets
Impairment loss is provided to the extent carrying amount of assets
exceeds their recoverable amount. Recoverable amount is higher of
assetÂs selling price and its value in use. Value in use is the present
value of estimated future cash fows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life. Net selling price is the amount obtainable from the sale
of an asset in an armÂs length transaction between knowledgeable,
willing parties, less the costs of disposal.
1.17 expenditure
Expenses are net of taxes recoverable, where applicable.
Mar 31, 2012
1.1 Basis of preparation of financial statements
The financial statements of the Company are prepared to comply in all
material aspects with the applicable accounting principles in India,
the Accounting Standards notified under Sub-section (3C) of Section 211
of the Companies Act, 1956 (hereinafter referred as "the Act") and
other relevant provisions of the Act.
1.2 Use of Estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported balances of assets
and liabilities on the date of the financial statements and reported
amounts of income and expenses during the reporting period. Management
believes that the estimates used in the preparation of financial
statements are prudent and reasonable. Actual results could differ from
these estimates. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
1.3 Fixed Assets
Fixed Assets are stated at cost of acquisition and subsequent
improvements thereto including taxes, duties, freight and other
incidental expenses for bringing the asset concerned to its working
condition for its intended use, less accumulated depreciation and
impairment loss. Interest on borrowings attributable to qualifying
assets are capitalised and included in the cost of fixed assets as
appropriate. Intangible assets are stated at the consideration paid for
acquisition less accumulated amortisation.
1.4 Leases
Assets acquired under Leases, where the Company has substantially all
the risks and rewards of ownership, are classified as finance leases.
Such leases are capitalised at the inception of the lease at lower of
the fair value or the present value of the minimum lease payments and a
liability is created for an equivalent amount. Each lease rental paid
is allocated between the liability and the interest cost, so as to
obtain a constant periodic rate of interest on the outstanding
liability for each period.
Assets acquired as leases, where a significant portion of the risk and
rewards of ownership are retained by the lessor, are classified as
operating leases. Lease rentals are charged to the Profit and Loss
Account on accrual basis as per terms of the lease.
1.5 Borrowing costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
1.6 Depreciation and Amortisation
Depreciation is provided on straight line method, pro rata to the
period of use, at the rates specified in Schedule XIV of the Act or the
rates based on the useful lives of the assets as estimated by the
management, whichever is higher. The rates based on the useful lives
of the assets in the following categories are estimated to be higher
than those specified in Schedule XIV of the Act:
Electrical Equipment 5.38%
Telephone Equipment 6.33%
Computer Software 16.67%
Leasehold assets are amortized at rate based on the remaining period of
lease or the rate specified in Schedule XIV of the Act, whichever is
higher.
All individual assets costing Rs 5,000/- or less are fully depreciated
in the year of purchase.
1.7 Investments
Long term investments are valued at cost. Provision is made to
recognize a decline, other than temporary, in the value of long term
investments. Current Investments are stated at lower of cost or market
value.
1.8 Inventories
a. Stock of Raw-materials is valued at lower of cost or Net Realizable
Value. The costs are, in general, determined on Weighted Average Basis.
b. Finished goods and Work-in-process: Finished goods are valued at
lower of cost or Net Realizable Value. Cost includes direct materials,
Labour and a proportion of manufacturing overheads based on normal
operating capacity.
Work In process is valued at lower of cost or Net Realizable Value. The
cost is determined up to the estimated stage of process and includes
direct materials, Labour and a proportion of manufacturing overheads
based on normal operating parameters.
c. By Products: At estimated realizable value.
d. Stores and Spares: At lower of cost or Net Realizable Value. The
costs are, in general, determined on weighted average basis.
1.9 Revenue Recognition
Revenue is recognized when the significant risks and rewards of
ownership of goods have been passed on to the buyer. Sale of goods is
exclusive of sales tax and captive consumption of Molasses, Power and
Baggasse. Dividend Income is recognized in the year in which the right
to receive the payment is established.
Income from investments is recognized in the year in which it is
accrued and stated at gross of tax deducted at source.
1.10 Foreign Currency Transactions
All foreign currency transactions are accounted for at the exchange
rates prevailing on the date of such transactions.
Liabilities/ assets in foreign currencies are reckoned in the accounts
as per the following principles:
Exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period or reported in previous financial
statements, are accounted as below:
(a) In so far as they relate to the acquisition of depreciable capital
assets, are added to or deducted from the cost of the asset and are
depreciated over the balance life of the asset; and
(b) In other cases, the said exchange differences are accumulated in a
'Foreign Currency Monetary Items Translation Difference Account' and
amortized over the balance period of such long term asset/liability but
not beyond March 31, 2020.
All other monetary assets and liabilities denominated in foreign
currency are restated at the rates ruling at the year end and all
exchange gains/losses arising there from are adjusted to the Profit and
Loss Account, except those covered by forward contracted rates where
the premium or discount arising at the inception of such forward
exchange contract is amortised as expense or income over the life of
the contract.
Exchange differences on forward contracts are recognised in the Profit
and Loss Account in the reporting period in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of such
forward contracts is recognised as income or expense for the year.
For forward exchange contracts and other derivatives that are not
covered by Accounting Standard (AS) -11 'The Effects of Changes in
Foreign Exchange Rates', the Company follows the guidance in the
announcement of the Institute of Chartered Accountants of India (ICAI)
dated March 29, 2008, whereby for each category of derivatives, the
Company records any net mark-to-market losses. Net mark-to-market gains
are not recorded for such derivatives.
1.11 Employee Benefits
a. Short Term Employee Benefits
Undiscounted amount of short term employee benefits expected to be paid
in exchange for the services rendered by employees is recognised during
the period when the employee renders the services. These benefits
include compensated absences such as paid annual leave and performance
incentives.
b. Defined Contribution Plans
These comprise of contributions to employees' provident fund with the
government and certain state plans like Employees' State Insurance and
Employees' Pension Scheme. The Company's payments to the defined
contribution plans are recognized as an expense during the period in
which the employees perform the services that the payment covers.
c. Defined Benefit Plans
Gratuity for employees is covered under a scheme of Life Insurance
Corporation of India and contributions in respect of such scheme are
recognized in the Profit and Loss Account. The liability as at the
Balance Sheet date is provided for based on the actuarial valuation,
based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses
comprise experience adjustments and the effect of changes in the
actuarial assumptions and are recognised immediately in the Profit and
Loss Account as income or expense.
d. Other Long Term Employee Benefits
Other Long term employee benefits comprise of Compensated absences
which are not expected to occur within twelve months after the end of
the period in which the employee renders the related services are
recognised as a liability at the present value of the defined benefit
obligation at the balance sheet date based on actuarial valuation
carried out at each balance sheet date.
1.12 Earnings per Share
The earnings considered in ascertaining the Company's Earnings Per
Share (EPS) comprise of the net profit after tax less dividend
(including dividend distribution tax) on preference shares. The number
of shares used for computing the basic EPS is the weighted average
number of shares outstanding during the year.
1.13 Taxes on Income
Provision for income tax comprises current taxes and deferred taxes.
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between the accounting
income and the taxable income for the year and quantified using the tax
rates and laws enacted or substantively enacted as on the Balance Sheet
date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable/virtual certainty that sufficient future
taxable income will be available against which such deferred tax asset
can be realised.
1.14 Provisions
A provision is recognized when an enterprise has a present obligation
as a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions, other than employee
benefits, are not discounted to their present value and are determined
based on management estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current management estimates.
1.15 Contingencies
Obligations which are material and whose future outcome cannot be
ascertained with reasonable certainty are treated as contingent and, to
the extent not provided for, are disclosed by way of notes on the
accounts.
1.16 Impairment of Assets
Impairment loss is provided to the extent carrying amount of assets
exceeds their recoverable amount. Recoverable amount is higher of
asset's selling price and its value in use. Value in use is the present
value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life. Net selling price is the amount obtainable from the sale
of an asset in an arm's length transaction between knowledgeable,
willing parties, less the costs of disposal.
1.17 Expenditure
Expenses are net of taxes recoverable, where applicable.
Jun 30, 2011
I. Basis of preparation of Financial Statements
The financial statements of the Company are prepared to comply in all
material aspects with the applicable accounting principles in India,
the Accounting Standards notifed under Sub-section (3C) of Section 211
of the Companies Act, 1956 (hereinafter referred as "the Act") and
other relevant provisions of the Act.
ii. Use of estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported balances of assets
and liabilities on the date of the financial statements and reported
amounts of income and expenses during the reporting period. Management
believes that the estimates used in the preparation of financial
statements are prudent and reasonable. Actual results could differ from
these estimates. Any revision to accounting estimates is recognised
prospectively in the current and future periods.
iii. Revenue Recognition
Revenue is recognised when the signifcant risks and rewards of
ownership of goods have been passed on to the buyer. Sale of goods is
exclusive of sales tax and captive consumption of Molasses, Power and
Bagasse.
Dividend Income is recognised in the year in which the right to receive
the payment is established.
Income from investments is recognised in the year in which it is
accrued and stated at gross of tax deducted at source.
iv. Fixed Assets
Fixed Assets are stated at cost of acquisition and subsequent
improvements thereto including taxes, duties, freight and other
incidental expenses for bringing the asset concerned to its working
condition for its intended use, less accumulated depreciation and
impairment loss. Interest on borrowings attributable to qualifying
assets are capitalised and included in the cost of fixed assets as
appropriate. Intangible assets are stated at the consideration paid for
acquisition less accumulated amortisation.
v. Leases
Assets acquired under Leases, where the Company has substantially all
the risks and rewards of ownership, are classifed as fnance leases.
Such leases are capitalised at the inception of the lease at lower of
the fair value or the present value of the minimum lease payments and a
liability is created for an equivalent amount. Each lease rental paid
is allocated between the liability and the interest cost, so as to
obtain a constant periodic rate of interest on the outstanding
liability for each period.
Assets acquired as leases, where a signifcant portion of the risk and
rewards of ownership are retained by the lessor, are classifed as
operating leases. Lease rentals are charged to the Profit and Loss
Account on accrual basis as per terms of the lease.
vii. Impairment
Impairment loss is provided to the extent carrying amount of assets
exceeds their recoverable amount. Recoverable amount is higher of
asset's selling price and its value in use. Value in use is the present
value of estimated future cash fows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life. Net selling price is the amount obtainable from the sale
of an asset in an arm's length transaction between knowledgeable,
willing parties, less the costs of disposal.
viii. Investments
Long term investments are valued at cost. Provision is made to
recognise a decline, other than temporary, in the value of long term
investments.
Current Investments are stated at lower of cost or market value.
ix. Inventories
a. Stock of Raw-materials is valued at lower of cost or Net Realizable
Value. The costs are, in general, determined on Weighted Average Basis.
b. Finished goods and Work-in-process:
Finished goods are valued at lower of cost or Net Realizable Value.
Cost includes direct materials, labour and a proportion of
manufacturing overheads based on normal operating capacity.
Work in process is valued at lower of cost or Net Realizable Value. The
cost is determined up to the estimated stage of process and includes
direct materials, labour and a proportion of manufacturing overheads
based on normal operating capacity.
c. By Products: At estimated realizable value.
d. Stores and Spares: At lower of cost or Net Realizable Value. The
costs are, in general, determined on weighted average basis
x. Foreign Exchange Transactions
All foreign currency transactions are accounted for at the exchange
rates prevailing on the date of such transactions.
Liabilities/ assets in foreign currencies are reckoned in the accounts
as per the following principles:
Exchange differences arising on reporting of long term foreign currency
monetary items at rates different from those at which they were
initially recorded during the period or reported in previous financial
statements, are accounted as below:
(a) In so far as they relate to the acquisition of depreciable capital
assets, are added to or deducted from the cost of the asset and are
depreciated over the balance life of the asset; and
(b) In other cases, the said exchange differences are accumulated in a
'Foreign Currency Monetary Items Translation Difference Account' and
amortised over the balance period of such long term asset/liability but
not beyond March 31, 2011.
All other monetary assets and liabilities denominated in foreign
currency are restated at the rates ruling at the year end and all
exchange gains/ losses arising there from are adjusted to the Profit and
Loss Account, except those covered by forward contracted rates where
the premium or discount arising at the inception of such forward
exchange contract is amortised as expense or income over the life of
the contract.
Exchange differences on forward contracts are recognised in the Profit
and Loss Account in the reporting period in which the exchange rates
change. Any Profit or loss arising on cancellation or renewal of such
forward contracts is recognised as income or expense for the year.
For forward exchange contracts and other derivatives that are not
covered by Accounting Standard (AS) -11 'The Effects of Changes in
Foreign Exchange Rates', the Company follows the guidance in the
announcement of the Institute of Chartered Accountants of India (ICAI)
dated March 29, 2008, whereby for each category of derivatives, the
Company records any net mark-to-market losses. Net mark-to-market
gains are not recorded for such derivatives.
xi. Employee benefits
Defned Contribution Plans
These comprise of contributions to Employees' Provident Fund with the
government and certain state plans like Employees' Pension Scheme. The
Company's payments to the defned contribution plans are recognised as
an expense during the period in which the employees perform the
services that the payment covers.
Defned benefit Plan
Gratuity for employees is covered under a scheme of Life Insurance
Corporation of India and contributions in respect of such scheme are
recognised in the Profit and Loss Account. The liability as at the
Balance Sheet date is provided for based on the actuarial valuation,
based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses
comprise experience adjustments and the effect of changes in the
actuarial assumptions and are recognised immediately in the Profit and
Loss Account as income or expense.
Other Long term employee benefits
Other Long term employee benefits comprise of compensated absences which
are not expected to occur within twelve months after the end of the
period in which the employee renders the related services are
recognised as a liability at the present value of the defned benefit
obligation at the balance sheet date based on actuarial valuation
carried out at each balance sheet date.
Short term employee benefits
Undiscounted amount of short term employee benefits expected to be paid
in exchange for the services rendered by employees is recognised during
the period when the employee renders the services. These benefits
include compensated absences such as paid annual leave and performance
incentives.
xii. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
xiii. Earnings per Share
The earnings considered in ascertaining the Company's Earnings Per
Share (EPS) comprise of the net Profit after tax less dividend
(including dividend distribution tax) on preference shares. The number
of shares used for computing the basic EPS is the weighted average
number of shares outstanding during the period.
xiv. Taxes on Income
Provision for income tax comprises current taxes and deferred taxes.
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between the accounting
income and the taxable income for the year and quantifed using the tax
rates and laws enacted or substantively enacted as on the Balance Sheet
date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable/ virtual certainty that suffcient future
taxable income will be available against which such deferred tax asset
can be realised.
xv. Provisions
A provision is recognised when an enterprise has a present obligation
as a result of a past event and it is probable that an outfow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions, other than employee
benefits, are not discounted to their present value and are determined
based on management estimate required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to refect the current management estimates.
xvi. Contingencies
Obligations which are material and whose future outcome cannot be
ascertained with reasonable certainty are treated as contingent and, to
the extent not provided for, are disclosed by way of notes on the
accounts.
xvii. Expenditure
Expenses are net of taxes recoverable, where applicable
Mar 31, 2010
I. Basis of preparation of Financial Statements
The fnancial statements of the Company are prepared under historical
cost convention in accordance with the Generally Accepted Accounting
principles in India, the Accounting Standards notifed under Sub-section
(3C) of Section 211 of the Companies Act, 1956 (the ÃActÃ) and other
relevant provisions of the Act.
ii. Revenue Recognition
Revenue is recognized when the signifcant risks and rewards of
ownership of goods have been passed on to the buyer. Sale of goods is
exclusive of sales tax and captive consumption of Molasses, Power and
Baggasse.
Revenue from raw sugar processing on job work basis under agreements is
recognized in terms of the respective contracts.
Revenue from sale of Verifed/Certifed Emission Reductions is recognized
upon execution of a frm contract of sale of the eligible credits.
Dividend Income is recognized in the year in which the right to receive
the payment is established.
Income from investments is recognized in the year in which it is
accrued and stated at gross of tax deducted at source.
iii. Fixed Assets
Fixed Assets are stated at cost of acquisition and subsequent
improvements thereto including taxes, duties, freight and other
incidental expenses for bringing the asset concerned to its working
condition for its intended use, less accumulated depreciation and
impairment loss. Interest on borrowings attributable to qualifying
assets are capitalised and included in the cost of fxed assets as
appropriate. Intangible assets are stated at the consideration paid
for acquisition less accumulated amortisation.
iv Leases
Assets acquired under Leases, where the Company has substantially all
the risks and rewards of ownership, are classifed as fnance leases.
Such leases are capitalised at the inception of the lease at lower of
the fair value or the present value of the minimum lease payments and a
liability is created for an equivalent amount. Each lease rental paid
is allocated between the liability and the interest cost, so as to
obtain a constant periodic rate of interest on the outstanding
liability for each period.
Assets acquired as leases, where a signifcant portion of the risk and
rewards of ownership are retained by the lessor, are classifed as
operating leases. Lease rentals are charged to the Proft and Loss
Account on accrual basis as per terms of the lease.
v. Depreciation and amortization
Depreciation is provided on straight-line method, pro rata to the
period of use, at the rates specifed in Schedule XIV of the Act or the
rates based on the useful lives of the assets as estimated by the
management, whichever is higher. The rates based on the useful lives of
the assets in the following categories are estimated to be higher than
those specifed in Schedule XIV of the Act:
Lease hold assets are amortized at rate based on the period of lease or
the rate specifed in Schedule XIV of the Act, whichever is higher. All
individual assets costing Rs. 5,000/- or less are fully depreciated in
the year of purchase.
vi. Impairment
Impairment loss is provided to the extent carrying amount of assets
exceeds their recoverable amount. Recoverable amount is higher of
assetÃs selling price and its value in use. Value in use is the present
value of estimated future cash fows expected to arise from the
continuing use of an asset and from its disposal at the end of its
useful life. Net selling price is the amount obtainable from the sale
of an asset in an armÃs length transaction between knowledgeable,
willing parties, less the costs of disposal.
vii. Investments
Long-term investments are valued at cost. Provision is made to
recognize a decline, other than temporary, in the value of long-term
investments.
Current Investments are stated at lower of cost or market value.
viii. Inventories
a) Stock of Raw-materials is valued at lower of cost or Net Realizable
Value. The costs are, in general, determined on Weighted Average Basis.
b) Finished goods and Work-in-process:
Finished goods are valued at lower of cost or Net Realizable Value.
Cost includes direct materials, Labour and a proportion of
manufacturing overheads based on normal operating capacity.
Work-in-process is valued at lower of cost or Net Realizable Value. The
cost is determined up to the estimated stage of process and includes
direct materials, Labour and a proportion of manufacturing overheads
based on normal operating parameters.
c) By Products: At estimated realizable value.
d) Stores and Spares: At lower of cost or Net Realizable Value. The
costs are, in general, determined on weighted average basis.
x. Employee Benefits
Defined Contribution Plans
These comprise of contributions to employeesà provident fund with the
government and certain state plans like Employeesà state Insurance and
Employeesà Pension scheme. The CompanyÃs payments to the defned
contribution plans are recognized as an expense during the period in
which the employees perform the services that the payment covers.
Defined Benefit Plan
Gratuity for employees is covered under a scheme of Life Insurance
Corporation of India and contributions in respect of such scheme are
recognized in the Proft and Loss Account. The liability as at the
Balance Sheet date is provided for based on the actuarial valuation,
based on Projected Unit Credit Method at the balance sheet date,
carried out by an independent actuary. Actuarial Gains and Losses
comprise experience adjustments and the effect of changes in the
actuarial assumptions and are recognised immediately in the Proft and
Loss Account as income or expense.
Other Long-term Employee Benefits
Other Long-term employee benefts comprise of Compensated absences which
are not expected to occur within twelve months after the end of the
period in which the employee renders the related services are
recognised as a liability at the present value of the defned beneft
obligation at the balance sheet date based on actuarial valuation
carried out at each balance sheet date.
Short-term Employee Benefits
Undiscounted amount of short-term employee benefts expected to be paid
in exchange for the services rendered by employees is recognised during
the period when the employee renders the services. These benefts
include compensated absences such as paid annual leave and performance
incentives.
xi. Borrowing Costs
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
xii. Earnings/(Loss) per Share
The earnings/(loss) considered in ascertaining the CompanyÃs
Earnings/(Loss) Per Share (EPS) comprise of the net proft/(loss) after
tax less dividend (including dividend distribution tax) on preference
shares. The number of shares used for computing the basic EPS is the
weighted average number of shares outstanding during the year.
xiii. Taxes on Income
Provision for income tax comprises current taxes and deferred taxes.
Current tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred tax is recognised on timing differences between the accounting
income and the taxable income for the year and quantifed using the tax
rates and laws enacted or substantively enacted as on the Balance Sheet
date.
Deferred tax assets are recognised and carried forward to the extent
that there is a reasonable/virtual certainty that suffcient future
taxable income will be available against which such deferred tax asset
can be realised.
xiv. Provisions
A provision is recognized when an enterprise has a present obligation
as a result of a past event and it is probable that an outfow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions, other than employee
benefts, are not discounted to their present value and are determined
based on management estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to refect the current management estimates.
xv. Contingencies
Liabilities which are material and whose future outcome cannot be
ascertained with reasonable certainty are treated as contingent and, to
the extent not provided for, are disclosed by way of notes on the
accounts.
xvi. Expenditure
Expenses are net of taxes recoverable, where applicable.