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Notes to Accounts of Rana Sugars Ltd.

Mar 31, 2015

1. Contingent Liabilities:-

a) Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessment is accounted for in the year in which the assessment is completed.

i) Income Tax assessments have been completed up to the assessment year 2012-13. There is no demand pending in respect of the completed assessments.

ii) Sales Tax assessments

a) Sales Tax assessments, for Sugar Units in Districts Moradabad and Rampur have been completed up to Financial Year 2011-12.The department has raised additional demand of Rs.170.97 lacs for Financial Years 2007-08, 2008-09 & 2011-12 on account of Sales Tax and Entry Tax. The Company has filed appeals with the Appellant Authority against the orders of Deputy Commissioner of Sales Tax, Moradabad. The Company has deposited Rs. 60.24 lacs under protest and shown the same under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances.

b) Sales Tax assessments for Sugar unit in District Amritsar and Distillery Unit in District Taran Taran have been completed upto Financial Year 2011-12. The Department has raised the Purchase Tax demand of Rs. 582.74 lacs, Rs. 882.01 lacs and Rs. 90.52 lacs for the Financial years 2005-06, 2009-10 and 2011-12 respectively and Sales Tax demand of Rs. 160.51 lacs and Rs. 2.78 lacs for the Financial Years 2009-10 and 2011-12 respectively. The Company has preferred appeals against all these orders with the appellate authorities.

Though, the Company has provided purchase tax liability of Rs. 2735.86 lacs (Previous year Rs.2734.20 lacs ) for the years 2005-06 to 2014-15, the same has not been paid as the above mentioned appeals against assessment orders are pending with the appellate authorities.

b) An amount of Rs. 36.96 lacs relates to disputed excise duty on bagasse (Previous year Rs. 36.96 lacs) and shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The hon'ble High Court of Allahabad has quashed the order of the department, but the concerned department has filed an appeal with hon'ble Supreme Court against the decision of hon'ble High Court of Allahabad.

c) The company has deposited Rs. 49.90 lacs on account of Excise Duty under protest (Previous year Rs. 47.35 lacs) against alleged evasion of Excise duty and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with CESTAT (Central Excise & Service Tax Appellant Tribunal) against the order of Commissioner Central Excise.

d) The company has deposited Rs. 2.50 lacs on account of Excise Duty under protest (Previous year Rs. 2.50 lacs) and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with CESTAT (Central Excise & Service Tax Appellant Tribunal) against the order of Commissioner Appeals.

e) Bank Guarantees/LC's issued Rs. 1096.37 lacs (previous year Rs. 294.00 lacs) are secured by pledge of FDRs of Rs. 232.23 lacs (previous year Rs. 34.58 lacs) and lien of Rs. 30.00 lacs (previous year Rs. 40.20 lacs) on current a/c & counter guarantees given by the Company.

f) As per the Tripartite agreement amongst the Company, the Bankers and the Individual farmers, Bankers disburse the Crop Loan to the farmers through Company. The Company has provided corporate guarantees to the respective Banks on behalf of farmers for securing the repayment of loan with interest. The crop loans outstanding as at the end of the Financial Year were Rs. 5858.34 lacs (Previous year Rs. 5553.06 lacs) against the corporate guarantee given by the company amounting to Rs. 5900.00 lacs (Previous year Rs. 5700.00 lacs).

g) The estimated amount of contracts remaining to be executed on capital account and not provided for amounting to Rs. 157.79 Lacs (Previous Year Rs. 308.07 Lacs).

2. Balances of Trade Receivables, Trade Payables and advances are subject to their respective confirmation and reconciliation.

3. In the opinion of the Board of Directors, all the Current Assets, Loans and Advances, if realised in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

4. Excise duty amounting to Rs. 1743.52 Lacs (Previous year Rs. 1730.48 Lacs) has been added in the closing stock and the same has been shown as excise duty payable. However this has no effect on the Profit/Loss for the year.

5. As per Accounting Standard - 15 "Employee Benefits", the disclosure of Employee Benefits as defined in the Accounting Standard are as follows:

6. Borrowing Costs

During the Current year, borrowing cost amounting to Rs. 281.29 lacs (Previous year Rs. 372.51 lacs) directly attributable to capital expenditure has been capitalized

7. Segment Reporting Primary Segment

Based on the guiding principles given in the Accounting Standard - 17 "Segment Reporting" issued by ICAI, the Company's segments are White Crystal Sugar, Power Generation and Distillery.

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the respective segment.

Segment Identification

Business segments have been identified on the basis of the nature of products/services, the risk return profile of

8. Related Party Disclosures:

Disclosures as required by the Accounting Standard -18 "Related Party Disclosures" issued by the ICAI are given below:

A. Relationship

a) Associate Companies

1. Rana Polycot Limited.

2. RSL Distilleries Pvt. Ltd.

3. Rana Informatics Pvt. Ltd.

4. Rana Leathers Pvt. Ltd.

5. Rana Power Ltd.

6. Superior Food Grains Pvt. Ltd.

b) Key Management Personnel:

1. Rana Ranjit Singh - Chairman

2. Rana Inder Partap Singh - Managing Director

3. Rana Veer Partap Singh - Director

4. Rana Karan Partap Singh - Director

c) Relatives of Key Management Personnel:

1. Rana Gurjeet Singh - Father of Rana Inder Partap Singh

2. Rajbans Kaur - Mother of Rana Inder Partap Singh

3. Rana Preet Inder Singh - Son of Rana Ranjit Singh

4. Sukhjinder Kaur - Wife of Rana Ranjit Singh

5. Manminder Kaur - Wife of Rana Inder Partap Singh

6. Manpreet Kaur - Wife of Rana Karan Paratp Singh

9. Deferred Tax

Deferred tax assets and liabilities are being offset as they relate to taxes on income levied by the same governing taxation laws.

10. Impairment of Assets

As per Accounting Standard -28 "Impairment of Assets" issued by ICAI, the management has reviewed its cash generating units as on 31.03.2015. No indication has been found by the management to suggest that the recoverable amount of Asset is less then the carrying amount. Hence no impairment loss on asset has been recognized.

11. The Movement of Provisions as required by Accounting Standard (AS - 29) "Provisions, Contingent Liabilities and Contingent Assets" issued by ICAI are as follows:

(Rs. In Lacs.)

Particulars Opening Balance Additions as on 01.04.2014 during the year

Income Tax NIL NIL

Bonus Payable 38.22 46.36

Retirement Benefit 599.30 00.00

Particulars Paid/ Closing Balance Reversed as on 31.03.2015

Income Tax NIL NIL

Bonus Payable 38.22 46.36

Retirement Benefit 34.77 564.53

12. The Micro and Small Enterprises to whom amount is outstanding as at the year end and requiring disclosure under the Micro Small and Medium Enterprises Development Act, 2006 are as follows:

Raj Lime Industries and Nikhil Techno Chem (P) Ltd.

The above information has been compiled in respect of parties to the extent to which they could be identified as micro or small enterprises on the basis of intimation received from the "suppliers" regarding their status under the Micro Small and Medium Enterprises Development Act, 2006.

However the Company has not received any demand for Interest from any of the party.

13. Expenditure on employees:

There was no employee employed for full or part of the year who was getting remuneration in excess of the limits specified in Section 197 read with schedule V of the Companies Act, 2013

14. As per Guidance Note no.-GN(A) - 31 issued by The Institute of Chartered Accountants of India (ICAI) on Accounting for Self generated Certified Emissions Reduction, the company has recognized Renewable Energy Certificate (REC) as Inventory which has been treated according to AS-2 on Valuation of inventories issued by ICAI.

15. Crop Loan from Banks amount to Rs. 5858.34 lacs (Previous year Rs. 5553.06 lacs) has been shown under the head Other Liabilities and payables.

16. In the year 2012 Punjab State Power Corporation Limited charged electricity duty on the interstate sale of power and deducted Rs. 146.32 lacs from the amount payable. The Company challanged the levy of electricity duty in the Hon'able High Court of Punjab and Haryana, who directed PSPCL to refund the amount with interest. PSPCL preferred an appeal against this order with the Hon'able Supreme Court of India. On 5th January 2015, the Hon'able Supreme Court of India affirmed the judgement of Hon'able High Court of Punjab and Haryana. Accordingly the Company has booked the electricity duty amount of Rs. 146.32 lacs (Previous year NIL) along with interest amount of Rs. 51.17 lacs (Previous year NIL) as Income.

17. The Govt. of Uttar Pradesh has announced subsidy for Sugar Indusrty for the Season 2014-15 linked to average selling price of sugar and by-products during the period 1st October 2014 to 31st May 2015. The Company has recognised such subsidy of Rs. 3186.78 lacs (Previous year Nil) and reduced the same from the cane cost and cane price payable based on present and expected likely average selling price.

18. During the Current year, company transferred NIL (Previous year Rs. NIL) to Capital Redemption Reserve as there is loss as per Profit & Loss account.

19. During the Current year, there is a change in method of calculation of depreciation as per the requirement of Schedule - II of The Companies Act 2013. The Loss for the current year is reduced by Rs.894.60 lacs (Previous year NIL) due to change in method of depreciation.

20. Previous year figures have been recasted / regrouped / rearranged wherever necessary to make them comparable with that of current year


Mar 31, 2014

1. SHARE CAPITAL

Note:

The company has two classes of shares with both having par value of Rs. 10 per share. The company has not allotted any shares for consideration other than cash during the last five years. Each holder of Equity share is entitled to one vote per share.

2. Contingent Liabilities:-

a) Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessment will be accounted for in the year in which assessment is complete.

i) Income Tax assessments have been completed up to the assessment year 2011-12. Additional demand of Rs. 110.78 lacs has been raised by the department in respect of Assessment Year 2007-08 against which the Company has filed appeal with CIT (Appeals), Chandigarh. The disputed amount of Rs. 110.78 lacs has been deposited by the Company and same is shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances.

ii) Sales Tax assessments

a) Sales Tax assessments, for Sugar Units in Districts Moradabad and Rampur have been completed up to Financial Year 2010-11.The department has raised additional demand of Rs. 163.70 lacs for Financial Years 2007-08, 2008-09 & 2011-12 on account of Sales Tax and Entry Tax. The Company has deposited Rs. 65.00 lacs under protest and shown the same under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed appeals with the Appellant Authority against the orders of Deputy Commissioner of Sales Tax, Moradabad

b) Sales Tax assessments for Sugar unit in District Amritsar and Distillery Unit in District Taran Taran have been completed upto Financial Year 2011-12. The Department has raised the Purchase Tax demand of Rs. 582.74 lacs, Rs. 882.01 lacs and Rs. 90.52 lacs for the Financial years 2005-06, 2009-10 and 2011-12 respectively and Sales Tax demand of Rs. 160.51 lacs and Rs. 2.78 lacs for the Financial Years 2009-10 and 2011-12. The Company has preferred appeals against all these orders with the appellate authorities. Though, the Company has provided purchase tax liability of Rs. 2734.20 lacs (Previous year Mrs. 2248.56 lacs ) for the years 2005-06 to 2013-14, the same has not been paid as the above mentioned appeals against assessment orders are pending with the appellate authorities.

b) An amount of Mrs. 36.96 lacs relates to disputed excise duty on bagasse (Previous year Mrs. 36.96 lacs) and shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The hobble High Court of Allahabad has quashed the order of the department, but the concerned department has filed an appeal with hobble Supreme Court against the decision of hobble High Court of Allahabad.

c) The company has deposited Mrs. 47.35 lacs on account of Excise Duty under protest (Previous year Rs. 47.35 lacs) against alleged evasion of Excise duty and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with CESTAT (Central Excise & Service Tax Appellant Tribunal) against the order of Commissioner Central Excise.

d) The company has deposited Rs. 2.50 lacs on account of Excise Duty under protest (Previous year Rs. 2.50 lacs) and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with CESTAT (Central Excise & Service Tax Appellant Tribunal) against the order of Commissioner Appeals.

e) Bank Guarantees/LC''s issued Rs. 294.00 lacs (previous year s 421.93 lacs) are secured by pledge of FDRs of Rs. 34.58 lacs (previous year Rs. 88.91 lacs) and lien of Mrs. 40.20 lacs (previous year Rs. 16.00 lacs) on current a/c & counter guarantees given by the Company.

f) As per the Tripartite agreement between the Company, Bankers and the Individual farmers, Banker disburses the Crop Loan to farmers through the Company. The Company has provided guarantee to the Bank on behalf of farmers for repayment of loan with interest. The crop loans outstanding as at the end of the Financial Year were Rs. 5553.06 lacs (Previous year Rs. 4923.28 lacs) against the corporate guarantee given by the company amounting to Rs. 5700.00 lacs (Previous year Rs. 5700.00 lacs).

g) The estimated amount of contracts remaining to be executed on capital account and not provided for amounting to Rs. 308.07 Lacs (Previous Year Rs. 204.77 Lacs).

3. Balances of Debtors, Creditors, Advances and Cane growers are subject to their respective confirmation and reconciliation.

4. In the opinion of the Board of Directors, all the Current Assets, Loans and Advances, if realised in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

5. Excise duty amounting to Rs. 1730.48 Lacs (Previous year Rs. 1556.95 Lacs) has been added in the closing stock and the same has been shown as excise duty payable. However this has no effect on the Profit/Loss for the year.

6. Borrowing Costs

During the Current year, borrowing cost amounting to Rs. 372.51 lacs (Previous year Rs. 413.05 lacs) directly attributable to capital expenditure has been capitalized

7. Segment Reporting

Primary Segment

Based on the guiding principles given in the Accounting Standard - 17 "Segment Reporting" issued by ICAI, the Company''s segments are White Crystal Sugar, Power Generation and Distillery.

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the respective segment.

Segment Identification

Business segments have been identified on the basis of the nature of products/services, the risk return profile of individual businesses, the organizational structure and the internal reporting system of the company.

8. Related Party Disclosures:

Disclosures as required by the Accounting Standard-18 "Related Party Disclosures" issued by the ICAI are given below:

A. Relationship

a) Associate Companies

1. Rana Polycot Limited.

2. RSL Distilleries Pvt. Ltd.

3. Rana Informatics Pvt. Ltd.

4. Rana Leathers Pvt. Ltd.

5. Rana Infrastructure Pvt. Ltd.

6. Rana Power Ltd.

7. Superior Food Grain Pvt. Ltd.

b) Key Management Personnel:

1. Rana Ranjit Singh - Chairman

2. Rana Inder Pratap Singh - Managing Director

3. Rana Veer Pratap Singh - Director

4. Rana Karan Pratap Singh - Director

c) Relatives of Key Management Personnel:

1. Rana Gurjeet Singh - Father of Rana Inder Partap Singh

2. Rajbans Kaur - Mother of Rana Inder Partap Singh

3. Rana Preet Inder Singh - Son of Rana Ranjit Singh

4. Sukhjinder Kaur. Wife of Rana Ranjit Singh

5. Amritpal Singh Gill - Father-in-law of Rana Inder Pratap Singh

6. Charan Kaur - Aunt of Rana Inder Pratap Singh

7. Jagdeep Kaur Gill - Mother-in-law of Rana Inder Pratap Singh

8. Parampreet Singh - Uncle of Rana Karan Pratap Singh

9. Purewal Farms - Owned by Parampreet Singh, Uncle of Rana Karan Pratap Singh

10. Tarsem Gill Uncle of Rana Inder Pratap Singh

11. Varinder Gill Aunt of Rana Inder Pratap Singh

12. Varinder Kaur -Aunt of Rana Karan Pratap Singh

13. Mohanjeet Singh Pooni Cousin of Rana Inder Pratap Singh

9. Deferred Tax

Deferred tax assets and liabilities are being offset as they relate to taxes on income levied by the same governing taxation laws.

Deferred tax Asset amounting to Rs. 559.48 has been recognized as a Deferred Tax Asset.

10. Impairment of Assets

As per Accounting Standard -28 "Impairment of Assets" issued by ICAI, the management has reviewed its cash generating units as on 31.03.2013. No indication has been found by the management to suggest that the recoverable amount of Asset is less than the carrying amount. Hence no impairment loss on asset has been recognized.

11. The Micro and Small Enterprises to whom amount is outstanding as at the year end and requiring disclosure under the Micro Small and Medium Enterprises Development Act, 2006 are as follows: Chemicals & Chemicals, Raj Lime Industries and Nikhil Techno Chem (P) Ltd.

The above information has been compiled in respect of parties to the extent to which they could be identified as micro or small enterprises on the basis of intimation received from the "suppliers" regarding their status under the Micro Small and Medium Enterprises Development Act, 2006. However the Company has not received any demand for Interest from any of the party.

12. Expenditure on employees:

There was no employee employed for full or part of the year who was getting remuneration in excess of the limits specified in Section 217 (2A) of the Companies Act, 1956

13. As per Guidance Note no.-GN(A) 31 Issed by The Institute of Chartered Accountants of India (ICAI) on Accounting for Self generated Certified Emissions Reduction, the company has recognized Renewable Energy Certificate (REC) as Inventory which has been treated according to AS-2 on Valuation of inventories issued by ICAI.

14. Extra ordinary items include Loss of Cash in transit amounting to Nil (Previous year Rs. 14.37 lacs).

15. Crop Loan from Banks amount to Rs. 5553.06 lacs (Previous year Rs.4923.28 lacs) has been shown under the head Other Liabilities and payables under Other Current Liabilities.

16. During the Current year, company transferred NIL (Previous year s 342.45 lacs) to Capital Redemption Reserve as there is loss as per Profit & Loss account.

17. Previous year figures have been recasted/ regrouped/ rearranged wherever necessary to make them comparable with that of current year.


Mar 31, 2013

1.1 Contingent Liabilities:-

a) Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessment will be accounted for in the year in which assessment is complete.

i) Income Tax assessments have been assessed up to the assessment year 2010-11 and there are demands of s 1.96 lacs and s 110.78 lacs against which the company has filed appeals with CIT (Appeals) Chandigarh.

ii) Sales Tax assessments have been completed up to assessment year 2004-05 for Punjab units & 2009-10 for Uttar Pradesh units and there is no demand outstanding in respect of these assessments.

b) An amount of s 36.95 lacs relates to disputed excise duty on bagasse (Previous year s 36.95 lacs) and shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with the Appellate Authority.

c) The company has deposited s 47.35 lacs on account of Excise Duty under protest (Previous year s 47.35 lacs) and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with the Appellate Authority against the order of Commissioner Central Excise.

d) The company has deposited s 65.00 lacs on account of Sales tax under protest (Previous year s 60.00 lacs) against the total demand of s 163.70 lacs and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with the Appellate Authority against the order of Deputy Commissioner Sales Tax.

e) The company has deposited s 2.50 lacs on account of Excise Duty under protest (Previous year s 2.50 lacs) and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with the Appellate Authority against the order of Commissioner Appeals.

f) The company has deposited s 2.47 lacs on account of Excise Duty under protest (Previous year Nil) and the same has been shown under the head Payments of Taxes under protest/appeal under Short Term Loans & Advances. The Company has filed an appeal with the Appellate Authority.

g) Bank Guarantees/LC''s issued s 421.93 lacs (previous year s 1339.58 lacs) are secured by pledge of FDRs of s 88.91 lacs (previous year s 215.83 lacs ) and lien of s 16.00 lacs (previous year s 40.00 lacs) on current a/c & counter guarantees given by the Company.

h) The estimated amount of contracts remaining to be executed on capital account and not provided for amounting to s 204.77 Lacs (Previous Year s 8.42 Lacs).

1.2 Balances of Debtors, Creditors, Advances and Cane growers are subject to their respective confirmation and reconciliation.

1.3 In the opinion of the Board of Directors, all the Current Assets, Loans and Advances, if realised in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

1.4 Excise duty amounting to s 1556.95 Lacs (Previous year s 1604.97 Lacs) has been added in the closing stock and the same has been shown as excise duty payable. However this has no effect on the Profit/Loss for the year.

1.5 As per Accounting Standard - 15 "Employee Benefits", the disclosure of Employee Benefits as defined in the Accounting Standard are as follows:

(i) The Company has taken the policy for gratuity with LIC''s Group Gratuity Scheme and made a provision of gratuity as per actuarial valuation certificate.

Summary of membership data of valuation and statistics based thereon:

1.6 Borrowing Costs

During the Current year borrowing cost amounting to s 413.05 lacs (Previous year Nil) directly attributable to capital expenditure has been capitalized

1.7 Segment Reporting

Primary Segment

Based on the guiding principles given in the Accounting Standard – 17 "Segment Reporting" issued by ICAI, the Company''s segments are White Crystal Sugar, Power Generation and Distillery.

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the respective segment.

Segment Identification

Business segments have been identified on the basis of the nature of products/services, the risk return profile of individual businesses, the organizational structure and the internal reporting system of the company.

1.8 Related Party Disclosures:

Disclosures as required by the Accounting Standard -18 "Related Party Disclosures" issued by the ICAI are given below:

A. Relationship

a) Associate Companies

1. Rana Polycot Limited.

2. RSL Distilleries Pvt. Ltd.

3. Rana Informatics Pvt. Ltd.

4. Rana Leathers Pvt. Ltd.

5. Rana Infrastructure Pvt. Ltd.

6. Rana Power Ltd.

7. Superior Food Grain Pvt. Ltd.

b) Key Management Personnel:

1. Rana Ranjit Singh – Chairman

2. Rana Inder Pratap Singh – Managing Director

3. Rana Veer Pratap Singh – Director

4. Rana Karan Pratap Singh - Director

c) Relatives of Key Management Personnel:

1. Rana Gurjeet Singh - Father of Rana Inder Pratap Singh

2. Mrs. Rajbans Kaur - Mother of Rana Inder Pratap Singh

3. Rana Preet Inder Singh - Son of Rana Ranjit Singh

4. Mrs. Sukhjinder Kaur. – Wife of Rana Ranjit Singh

1.9 Deferred Tax

Deferred tax assets and liabilities are being offset as they relate to taxes on income levied by the same governing taxation laws.

1.10 Impairment of Assets

As per Accounting Standard -28 "Impairment of Assets" issued by ICAI, the management has reviewed its cash generating units as on 31.03.2013. No indication has been found by the management to suggest that the recoverable amount of Asset is less than the carrying amount. Hence no impairment loss on asset has been recognized.

1.11 The Micro and Small Enterprises to whom amount is outstanding as at the year end and requiring disclosure under the Micro Small and Medium Enterprises Development Act, 2006 are as follows:

Chemicals & Chemicals, Raj Lime Industries and Nikhil Techno Chem (P) Ltd.

The above information has been compiled in respect of parties to the extent to which they could be identified as micro or small enterprises on the basis of intimation received from the "suppliers" regarding their status under the Micro Small and Medium Enterprises Development Act, 2006.

1.12 The company has given guarantees against crop loans of s 4923.28 lacs (previous year s 4651.79 lacs) availed by the farmers.

1.13 The company has filed an appeal with the Hon''ble Supreme Court against the Imposition of Purchase Tax on Sugarcane and the same is still pending. The total amount of Purchase Tax works out to s 2248.56 lacs (Previous year s 2075.32 lacs) which has been provided but not paid.

1.14 Extra ordinary items includes Loss of Cash in transit amounting to s 14.37 lacs (Previous year Nil).

1.15 During the Current year, company transferred s 342.45 lacs (Previous year Nil) to Capital Redemption Reserve.

1.16 In Preference to the Companies Act, 1956, the company has not provided for Dividend on non- cumulative Preference share in view of the stipulation imposed by the lending institutions.

1.17 Previous year figures have been recasted/ regrouped/ rearranged wherever necessary to make them comparable with that of current year.


Mar 31, 2012

1.1 Contingent Liabilities:-

a) Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessments is accounted for in the year in which the assessments are completed.

i) Income Tax assessments have been completed up to the assessment year 2009-10. There is no demand in respect of the assessment Years upto 2009-10.

ii) Sales Tax assessments have been completed up to the assessment year 2004-05 for Punjab units & 2008-09 for Uttar Pradesh units.

b) An amount of Rs. 36.95 lacs (Previous year Rs. 24.61 lacs) has been reduced from Cenvat Receivable on account of disputed excise duty on bagasse and the same has been shown under the head Payments of Taxes under protest/appeal under Loans & Advances. The Company has filed an appeal with the Appellate Authority.

c) The company has deposited Rs. 47.35 lacs on account of Excise Duty under protest (Previous year Rs. 12.36 lacs) and the same has been shown under the head Payments of Taxes under protest/appeal under short term Loans & Advances. The Company has filed an appeal with the Appellate Authority against the order of Commissioner, Central Excise.

d) The company has deposited Rs. 80.26 lacs on account of Entry tax under protest (Previous year Rs. 26.99 lacs) and the same has been shown under the head Payments of Taxes under protest/appeal under Loans & Advances. The Company has filed an appeal with the Appellate Authority against the order of Deputy Commissioner, Sales Tax.

e) The company has deposited Rs. 2.50 lacs on account of Excise Duty under protest (Previous year Rs. 2.50 lacs) and the same has been shown under the head Payments of Taxes under protest/appeal under Loans & Advances. The Company has filed an appeal with the Appellate Authority against the order of Commissioner Appeals.

f) BankGuarantees/LC's issued to PEC Limited and other companies amounting toRs. 1339.58 lacs (previous year Rs. 2780.36 lacs) are secured by pledge of FDRs of Rs. 215.83 lacs (previous year Rs. 410.67 lacs) and lien ofRs. 40 lacs on current a/c & counter guarantees given by the Company.

g) The estimated amount of contracts remaining to be executed is Rs. 8.42 Lacs (Previous Year Rs. 238.61 Lacs).

1.2 Balances of Debtors, Creditors, Advances and Cane growers are subject to their respective confirmation and reconciliation.

1.3 In the opinion of the Board of Directors, all the Current Assets, Loans and Advances, if realised in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

1.4 Excise duty amounting toRs. 1604.97 Lacs (Previous yearRs. 1338.66 Lacs) has been added in the closing stock and the same has been shown as excise duty payable. However this has no effect on the Profit/(Loss) for the year.

1.5 As per Accounting Standard -15 "Employee Benefits", the disclosure of Employee Benefits as defined in the Accounting Standard are as follows:

(i) The Company has taken the policy for gratuity with LIC's Group Gratuity Scheme for its unit at Amritsar and Head Office at Chandigarh and paid annual premium of Rs. 12.00 Lacs for the year ended 31st March 2012. The following are the actuarial assumptions taken based on which the premium has been determined:

- Discounting factor 8%

- Salary Increase 7%

(ii) The Company has made provision of gratuity for its units at Moradabad, Rampur and Tarn Taran as per actuarial valuation certificate.

(iii) The Company has made provision for leave Encashment as per the Actuarial valuation certificate.

1.6 Segment Reporting

Primary Segment

Based on the guiding principles given in the Accounting Standard - 1 7 "Segment Reporting" issued by ICAI, the Company's segments are White Crystal Sugar, Power Generation and Distillery.

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the respective segment.

Segment Identification

Business segments have been identified on the basis of the nature of products/services, the risk return profile of individual businesses, the organizational structure and the internal reporting system of the company.

1.7 Related Party Disclosures:

Disclosures as required by the Accounting Standard -18 "Related Party Disclosures" issued by the ICAI are given below:

A. Relationship

a) Associate Companies

1. Rana Polycot Limited.

2. RSL Distilleries Pvt. Ltd.

3. Rana Informatics Pvt. Ltd.

4. Rana Leathers Pvt. Ltd.

5. Rana Infrastructure Pvt. Ltd.

6. Rana Power Ltd.

7. Superior Food Grain Pvt. Ltd.

b) Key Management Personnel:

1. RanaRanjitSingh -Chairman

2. Rana Inder Partap Singh - Managing Director

3. Rana Veer Partap Singh - Director

4. Rana Karan Partap Singh-Director

c) Relatives of Key Management Personnel:

1. Rana Gurjeet Singh

2. Mrs. Rajbans Kaur

3. Rana Preet Inder Singh

4. Mrs. Sukhjinder Kaur.

1.8 Deferred Tax Liability

Deferred tax assets and liabilities are being offset as they relate to taxes on income levied by the same governing taxation laws.

Major components of Deferred Tax Assets and Liabilities:-

During the year ended 31st March, 2012 deferred tax asset worth Rs. 678.37 lacs has been generated, which has not been recognized as a matter of prudence.

1.9 Impairment of Assets

As per Accounting Standard -28 "Impairment of Assets" issued by ICAI, the management has reviewed its cash generating units as on 31.03.2012. No indication has been found by the management to suggest that the recoverable amount of Asset is less then the carrying amount. Hence no impairment loss on asset has been recoenized.

1.10 The Micro and Small Enterprises to whom amount is outstanding as at the year end and requiring disclosure under the Micro Small and Medium Enterprises Development Act, 2006 are as follows:

Chemicals & Chemicals, Raj Lime Industries, Allied Alloys Product, Gita Flow Pumps Pvt. Ltd. and Nikhil Techno Chem(P) Ltd.

The above information has been compiled in respect of suppliers to the extent to which they could be identified as micro or small enterprises on the basis of intimation received from the "suppliers" regarding their status under the Micro Small and Medium Enterprises Development Act, 2006.

1.11 Expenditure on employees:

There was no employee employed for full or part of the year who was getting remuneration in excess of the limits specified in Section 217 (2A) of the Companies Act, 1956

Break up of expenditure incurred on employees in receipt of remuneration aggregating to Rs. 60,00,000/- per annum or Rs. 5,00,000/- or more per month

1.12 No amount has been transferred to Capital Redemption Reserve as the company has incurred losses during the year.

1.13 The company has given guarantees against crop loans ofRs. 4651.79 lacs (previous yearRs. 4069.64 lacs) availed by the farmers. The loan given by the company to the farmers is included in Advances recoverable in cash or in kind or for value to be received.

1.14 The company has made provision for Purchase tax on sugar cane amounting to Rs. 315.00 lacs (Previous year Rs. 554.56 lacs). However, the same has not been paid as the matter is under appeal with the Hon'ble Supreme Court.

1.15 During the year dividend amounting to Rs. 14.21 lacs, which have remained unclaimed for a period of seven years have been transferred to Investor Education & Protection Fund.

1.16 Previous year figures have been recasted/regrouped/rearranged wherever necessary to make them comparable with that of current year.


Mar 31, 2010

1. Contingent Liabilities:

a) Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessments will be accounted for in the year in which the assessments are completed.

i) Income Tax assessments have been completed up to the assessment year 2007-08.

ii) Sales Tax assessments have been completed up to assessment year 2004-05 for Punjab units & 2007-08 for Uttar Pradesh units. There is no demand pending in respect of the completed assessments.

b) The Company has deposited Rs. 3.78 Lacs (Previous Year 3.78 Lacs) under protest in respect of Entry Tax on Sugar which has not been provided for.

c) Bank Guarantees/LCs issued to PEC Limited, MMTC Limited & other companies amounting to Rs. 4419.85 lacs (previous year Rs. 491.90 lacs) are secured by pledge of FDRs of Rs.646.16 lacs (previous year Rs. 131.65 lacs ) and lien with current account of Rs.40 lacs & counter guarantees given by the Company.

d) The estimated amount of contracts remaining to be executed on capital account is Rs. 118.90 Lacs (Previous Year: - 1430.07 Lacs).

e) The company has debited Cenvat Receivable on account of excise duty under protest on Bagasse amounting to Rs. 21.36 Lacs (Previous year Nil).

f) The company has given guarantees against crop loans of Rs. 4047.36 lacs (previous year 4371.46 lacs) availed by the farmers. The loan given by the company to the farmers is included in crop & other advances.

2. Balances of Debtors, Creditors, Advances and Cane growers are subject to their respective confirmation and reconciliation.

3. In the opinion of the Board of Directors, all the Current Assets, Loans and Advances, if realised in the ordinary course of business, have a value at least equal to the amount at which these are stated in the Balance Sheet.

4. As required by Accounting Standard 2 " Valuation of Inventories" issued by The Institute of Chartered Accountants of India (ICAI) read with Accounting Standard Interpretation 14, the Excise duty amounted to Rs. 1139.13 Lacs (Previous year Rs. 639.83 Lacs) has been added in the closing stock and the same has been shown as excise duty payable. However this has no effect on the Profit/Loss for the period.

5. As required by Accounting Standard (AS) 15 "Employee Benefits" issued by ICAI, the Company has taken the policy for gratuity with LICs Group Gratuity Scheme and paid annual premium of Rs. 21.74 Lacs as determined by the LIC for the period ended 31 March 2010. The following are the actuarial assumptions taken based on which the premium has been determined:

Discounting factor 8.00%

Salary Increase 7.00%

As required by Accounting Standard (AS) 15 "Employee Benefits" issued by ICAI, the Company has made provision for leave encashment as per the Actuarial valuation certificate.

6. As required by AS-16 "Borrowing Costs" issued by ICAI, the Borrowing Cost capitalized in the current year is Rs. Nil (Previous Year Rs.1633.74 Lacs).

7. Segment Reporting Primary Segment

Based on the guiding principles given in the Accounting Standard 17 "Segment Reporting" issued by ICAI, the Companys segments are White Crystal Sugar, Power Generation and Distillery. Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the respective segment. a) Segment Identification - Business segments have been identified on the basis of the nature of products/services, the risk return profile of individual businesses, the organizational structure and the internal reporting system of the company.

8. Related Party Disclosures :

Disclosures as required by the Accounting Standard -18 "Related Party Disclosures" issued by the ICAI are given below:

A. Relationship

a) Associate Companies

1. Rana Polycot Limited. 2. RSL Distilleries Pvt Ltd. 3. Rana Informatics Pvt. Ltd. 4. Rana Leathers Pvt. Ltd. 5. R.G.S.Traders Pvt. Ltd. 6. Rana Infrastructures Pvt. Limited 7. Rana Power Ltd.

b) Key Management Personnel

1. Rana Ranjit Singh Chairman 2. Rana Inder Partap Singh Managing Director 3. Rana Veer Partap Singh Director 4. Rana Karan Partap Singh Director

c) Relatives of Key Management Personnel

1. Rana Gurjeet Singh 2. Mrs. Rajbans Kaur 3. Rana Preet Inder Singh 4. Mrs. Sukhjinder Kaur

9. Impairment of Assets

As per Accounting Standard -28 "Impairment of Assets" issued by ICAI, the management has reviewed its cash generating units as on 31.03.2010. No indication has been found by the management to suggest that the recoverable amount of Asset is less than the carrying amount. Hence no impairment loss on asset has been recognized.

10. There are no Micro and Small Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31 March, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

11. Expenditure on employees

There was no employee employed for full or part of the year who was getting remuneration in excess of the limits specified in Section 217 (2A) of the Companies Act, 1956.

12. In Preference to the companies Act, 1956 the company has not provided for Dividend on non- comulative Preference shares in lieu of the Stipulation imposed in the Capital Debt Restructuring Package.

13. The company has entered into contracts for import of 85000 MT of raw sugar at an average price of US$ 538.53. The company is of the opinion that there will be no loss on processing the same.

14. Value of Imports

Capital goods imported NIL (Previous year 211 7.62 Lacs)

Raw material imported CIF value Rs. 8734.34 Lacs (Previous year NIL)

15. Bank balances include an amount of Rs.14.23 Lacs (Previous Year 14.25 Lacs) for unclaimed dividend for financial year 2004-05.

16. During the period, Carbon Credit Income amounting to be Rs. 1023.15 lacs has been booked on accrual basis.

17. In case of Profit & Loss Account, the figures for the current period are not comparable with the figures of the previous year, as the current period figures are for 18 months while the previous year figures were for 12 months.

18. Previous year figures have been recasted / regrouped / rearranged wherever necessary to make them comparable with that of current year.

 
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