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Notes to Accounts of Thiru Arooran Sugars Ltd.

Mar 31, 2015

1. Terms attached to Shares:

Equity Shares

The Equity Shares have a par value of Rs.10/-each. Each holder of the Equity Share is entitled to one vote per share.

The dividend, when proposed by the Board of Directors, is subject to approval of the Shareholders in the ensuing Annual General Meeting. Repayment of capital on liquidation will be in proportion to the number of Equity Shares held.

2. Secured Loans from banks of Rs.8424.59 lakhs as detailed below are secured on a pari-passu first charges basis on company's Fixed Assets including Land and Building, Plant and Machinery and other immovables and movable Fixed Assets both present and furture and second charge on pari-passu basis on Current Assets of the Company.

3. Obligations under Finance Lease is secured by the respective assest purchased under Finance Lease. The loan carries interest at the rate of 15% p.a. and is repayable in 60 instalements from the date of disbursement.

4. Trade Deposit from the Subsidiary company carries interest at 16% p.a. and is repayable over a period of Five Years.

5. Secured Loans to the extent of Rs.1,687.50 lakhs as detailed below are additionally secured by Corporate Guarantee of the Subsidiary Company Terra Energy Ltd.

UCO Bank 1,687.50 lakhs

6. Secured Loans to the extent of Rs.7,112.09 lakhs are also guranteed by the Chairman and Managing Director.

Forming part of the Financial Statements

7. Cash Credit and other Loans and Advances are secured by way of charge on current assets viz., stocks of raw material, semi-finished and finished goods, consumable stores and spares and charge on book debts and second charge on immovable assets of the Company.The above loan to the extent of Rs.17127.19/- lakhs are also secured by the Corporate guarantee of subsidiary company Terra Energy Ltd. Cash credit is renewable every 12 months.

In respect of loans granted by Banks to Shree Ambika Sugars Limited, a company under the same management, the Company has given an undertaking not to dispose off its equity shareholdings in Shree Ambika Sugars Limited as long as the loans sanctioned to Shree Ambika Sugars Limited are outstanding.

8. Bank balance include deposit of Rs. Nil ( P.Y. Rs.0.46 lakhs) which have maturity of more than 12 months. 16. 2 Bank balance include deposit of Rs. 82.37 Lakhs ( P.Y. Rs.86.92 Lakhs) as margin money to banks for various facilities granted to the Company.

9. a) During the year the Company has changed the Accounting policy of providing for depreciation on Buildings, Furniture & Fittings, Vehicles and Other Machinery to SLM method as against WDV method followed up to 31.03.2014, Consequent to the change in the Accounting Policy, the depreciation has been reworked from the date of asset being put to use and the excess depreciation amounting to Rs.1177.20 lakhs has been credited to the Profit & Loss Account.

b) Consequent to the notification of schedule II of the Companies Act, 2013 the Company based on the technical evaluation, determined the useful life of the fixed assets and the unamortized value of the fixed assets as at 01.04.2014 has been depreciated over the remaining useful life. In case of assets whose life has expired by 31.03.2014, the unamortized value has been reduced from the surplus balance as at 01.04.2014. Had depreciation been provided as per schedule XIV of the Companies Act, 1956 and the accounting policy up to 31.03.2014, the charge on account of depreciation would have been higher by Rs.805.89 lakhs.

Forming part of the Financial Statements

(Rs. in lakhs)

Year ended Year ended Particulars March 31,2015 March 31,2014

10. CONTINGENT LIABILITIES IN RESPECT OF

Guarantees issued by bankers - 383.98

Other Commitments - Purchase order issued for items such as Raw materials, Services etc. 80.14 13.03

Disputed Income Tax demand/liabilities not provided for 647.35 391.15

Claims against the Company for Excise Duty and others including

Industrial disputes not acknowledged as debt and not provided for 3,913.01 3,613.66

Disputed Purchase Tax & Sales Tax liabilities not provided for 1,547.50 1,547.50

11. The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure regarding

(i) Amount due and outstanding to suppliers as at the end of the accounting year,

(ii) Interest paid during the year,

(iii) Interest payable at the end of the accounting year and

(iv) Interest accrued and unpaid at the end of the accounting year, have not been provided.

12. FINANCE LEASE

a) The Company has acquired mechanical Harvestors on lease, the fair value of which aggregates to Rs.1903.90 lakhs. As per Accounting Standard-19 the Company has capitalised the said Harvestors at its fair value as the leases are in the nature of finance lease as defined in Accounting Standard-19. Lease Payments are appor- tioned between finance charges and outstanding liabilities.

13. The Company has given Corporate Guarantee of Rs. 78509.00 lakhs (P.Y. Rs. 81,009.00 lakhs) to Banks / Financial Institutions for the Term Loans and Working Capital facilities sanctioned to its Subsidiary and Associate Companies.

The total amount outstanding in respect of such loans as on March 31, 2015 is Rs.58,387.96 lakhs.

(P.Y. Rs.53,198.69 lakhs).

14. Pending Litigations

a) The Claim Petition filed by the Company against Railways for wrongful delivery of Sugar has been decided by the Railway Claims Tribunal in favour of the Company. Railways have filed appeal before the High Court of Judicature at Madras and the same is pending disposal.

b) In addition, the Company is subject to legal proceedings and claims which have arisen in the ordinary course of business. The Management does not expect that these legal proceedings and claims when disposed, will have any material and adverse impact on the Company's financial position.

f) In the absence of detailed information regarding Plan assets which is funded with SBI Life Insurance Co Ltd, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of the plan assets has not been disclosed.

g) The Company expects to contribute Rs.60.00 lakhs to Gratuity Fund in 2015-16.

h) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

15. RELATED PARTY DISCLOSURES

a) Names of the Related Parties

1. Subsidiary Company : Terra Energy Ltd

2. Associate Company : Shree Ambika Sugars Ltd

b) Key Managerial Personnel : R.V Tyagarajan, Chairman and Managing Director

Note: Related party relationships are as identified by Management and relied upon by the Auditors








Mar 31, 2014

1. SHARE CAPITAl

Terms attached to Shares:

Equity Shares

The Equity Shares have a par value of Rs.10/-each. Each holder of the Equity Share is entitled to one vote per share.

The dividend, when proposed by the Board of Directors, is subject to approval of the Shareholders in the ensuing Annual General Meeting. Repayment of capital on liquidation will be in proportion to the number of Equity Shares held.

2. LONG TERM BORROWINGS

Secured Loans from banks of Rs.6,568.84 lakhs as detailed below are secured on a pari-passu first charge basis on company''s Fixed Assets including Land and Building, Plant and Machinery and other immovables and movable Fixed Assets, both present and furture and second charge on pari-passu basis on Current Assets of the Company.

3. SHORT TERM BORROWINGS

Cash Credit facilities from Banks are secured by way of hypothecation of Current Assets viz., stocks of raw material, semi-finished and finished goods, consumable stores and spares and charge on book debts and second charge on immovable assets of the Company.The above loan to the extent of Rs.17,194.24 lakhs are also secured by the Corporate Guarantee of subsidiary company Terra Energy Ltd. Cash credit is renewable every 12 months.

4. NON CURRENT INVESTMENTS

Note :

In respect of loans granted by Banks to Shree Ambika Sugars Limited, a company under the same management, the Company has given an undertaking not to dispose off its equity shareholdings in Shree Ambika Sugars Limited as long as the loans sanctioned to Shree Ambika Sugars Limited are outstanding.

(Rs. in lakhs)

For the For the Particulars year ended year ended March 31, 2014 March 31, 2013

5. CONTINGENT LIABILITIES IN RESPECT OF

Guarantees issued by bankers 383.98 36.70

Estimated amount of Contracts to be executed on Capital Account and not provided for (Net of advance paid) - 23.18

Other Commitments - Purchase order issued for items such as Raw materials, Services etc. 13.03 44.29

Disputed Income Tax demand/liabilities not provided for 391.15 391.15

Claims against the Company for Excise Duty and others including Industrial disputes not acknowledged as debt and not provided for 3,613.66 4,295.38 Disputed Purchase Tax & Sales Tax liabilities not provided for 1,547.50 1,547.50

6. The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure regarding

(i) Amount due and outstanding to suppliers as at the end of the accounting year,

(ii) Interest paid during the year,

(iii) Interest payable at the end of the accounting year and

(iv) Interest accrued and unpaid at the end of the accounting year, have not been provided.

7. FINANCE LEASE

The Company has acquired mechanical Harvestors on lease, the fair value of which aggregates to Rs.1,903.90 lakhs. As per Accounting Standard-19 the Company has capitalised the said Harvestors at its fair value as the leases are in the nature of finance lease as defined in Accounting Standard-19. Lease Payments are apportioned between finance charges and outstanding liabilities.

8. The Company has given Corporate Guarantee of Rs.81,009.00 lakhs (P.Y.: Rs 61,974.00 lakhs) to Banks / Financial Institutions for the Term Loans and Working Capital facilities sanctioned to its Subsidiary and Associate Companies. The total amount outstanding in respect of such loans as on March 31, 2014 is Rs. 53,198.69 lakhs. ( P.Y.: Rs.39,547.74 lakhs).

9. Defined Contribution Plans

Contribution of Rs.116.40 lakhs to defined contribution plans is recognized as expense and included in the employees cost in the Statement of Profit and Loss.

9. Segment Reporting

i. The Company''s operations relate to manufacture of Sugar and Alcohol.

ii. The Company is exporting sugar apart from sale in the domestic market. The analysis of geographical segment is demarcated into local and exports.

iii. Inter Segment Transfer Pricing Policy: Molasses supplied to Alcohol segment is based on market price.

10. RELATED PARTY DISCLOSURES

a) Names of the Related Parties

1. Subsidiary Company : Terra Energy Ltd

2. Associate Company : Shree Ambika Sugars Ltd

b) Key Managerial Personnel : R.V. Tyagarajan, Chairman and Managing Director

Note: Related party relationships are as identified by Management and relied upon by the Auditors

c) Transactions with Subsidiary and Associate Companies

Note : The Chairman & Managing Director has not been paid any remuneration. As per the terms of arrangement between Thiru Arooran sugars Ltd and Terra Energy Ltd., 173,093 Mts (P.Y.: 351,386 Mts) of Bagasse has been Supplied by Thiru Arooran Sugars Ltd., in exchange for 321,585 Mts (P.Y.: 550,547 Mts) of steam and 21,438,994 Units (P.Y.: 35,383,754 Units) of Power from Terra Energy Ltd.


Mar 31, 2013

($ in lakhs) For the 15 Months

Particulars year ended ended March 31, 2013 March 31, 2012

1. CONTINGENT LIABILITIES IN RESPECT OF

Guarantees issued by Bankers 36.70 47.69

Estimated amount of Contracts to be executed on Capital Account and not provided for (Net of advance paid) 23.18 845.94

Other commitments - Purchase order issued for items such as Raw

Materials, Services etc. 44.29 210.14

Disputed Income Tax demand/liabilities not provided for 391.15 1677.39

Claims against the Company for Excise Duty and others including

Industrial disputes not acknowledged as debt and not provided for 4,295.38 3,756.71

Disputed Purchase Tax & Sales Tax liabilities not provided for 1,547.50 1,547.50

2. The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure regarding (i)Amount due and outstanding to suppliers as at the end of the accounting year, (ii) Interest paid during the year, (iii)Interest payable at the end of the accounting year and (iv) Interest accrued and unpaid at the end of the accounting year, have not been provided.

3. FINANCE LEASE

a) The Company has acquired mechanical Harvestors on lease, the fair value of which aggregates to Rs. 1903.90 lakhs. As per Accounting Standard-19 the Company has capitalised the said Harvestors at its fair value as the leases are in the nature of finance lease as defined in Accounting Standard -19. Lease payments are apportioned between finance charges and outstanding liabilities.

b) The minimum lease rentals as at March 31, 2013 and the present value as at March 31, 2013 of minimum lease payments in respect of assets acquired under finance lease are as follows.

c) Contingent rent recognised in the Statement of Profit and Loss in respect of Finance Lease : Rs. Nil (P.Y. : Nil).

4. The Company has given Corporate Guarantee of Rs.61,974 lakhs (P.Y.: Rs.65,732 lakhs) to Banks / Financial Institutions for the Term Loans and Working Capital facilities sanctioned to its Subsidiary and Associate Companies. The total amount outstanding in respect of such loans as on March 31, 2013 is Rs.39,547.74 lakhs (P.Y.: Rs.39,775.40 lakhs).

5. RELATED PARTY DISCLOSURES

a) Names of the Related Parties

1. Subsidiary Company : Terra Energy Ltd

2. Associate Company : Shree Ambika Sugars Ltd

b) Key Managerial Personnel : R.V. Tyagarajan, Chairman and Managing Director

Note: Related party relationships are as identified by Management and relied upon by the Auditors

c) Transactions with Subsidiary and Associate Companies

6. Previous year figures have been regrouped wherever necessary to conform to current year''s classification.

7. The figures for the current accounting year relate to 12 months and to that extent are not comparable with the figures of the previous year of 15 months.


Mar 31, 2012

1. Ffifteen months Year ended ended Mar. 31,2012 Dec. 31, 2010

1. Contingent liabilities in respect of

Guarantees issued by Bankers 4,768,620 348,620

Contracts to be executed on capital account and not provided for 84,593,957 107,896,458 (Net of advance paid)

Disputed Income tax demand/ liabilities not provided for 167,739,191 106,611,673

Claims against the Company for Excise Duty and others including

Industrial disputes not acknowledged as debt and not provided for 378,271,780 160,400,807

Disputed Purchase tax & Sales tax liabilities not provided for 154,750,009 154,750,009

2. Managerial Remuneration under section 198 of the Companies Act, 1956

Sitting fees to Directors 350,000 450,000 (Managing Director has not been paid any sitting fees or remuneration)

3. The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure regarding (i) Amount due and outstanding to suppliers as at the end of the accounting year, (ii) Interest paid during the year, (iii) Interest payable at the end of the accounting year and

(iv) Interest accrued and unpaid at the end of the accounting year, have not been provided.

4. The Company has given Corporate Guarantee of Rs. 6573.20 million to Banks/Financial Institutions for the Term Loans and Working Capital facilities sanctioned to its Subsidiary and Associate companies. The total amount outstanding in respect of such loans as on March 31, 2012 is Rs. 3977.54 million.

5. Finance Lease

a) The Company has acquired mechanical Harvestors on lease, the fair value of which aggregates to Rs. 190.39 Million. As per Accounting Standard -19 the Company has capitalised the said Harvestors at its fair value as the lease is in the nature of Finance Lease as defined in the Accounting Standard -19. Lease payments are apportioned between finance charges and outstanding liabilities.

c) Contingent rent recognised in the Profit and Loss Account in respect of Finance Lease : Rs. Nil (Previous Year : Nil).

6. Deferred Tax

In accordance with Accounting Standard - 22, Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the rates and the laws that have been enacted or subsequently enacted as of the Balance Sheet date.

Deferred tax assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realised in future as evidenced by the consistent past performance rendered by all the plants of the Company and the likelihood of such plants performing to their potential in future.

7. Previous year figures have been regrouped wherever necessary to confirm to current year's classification.

8. The figures for the reported accounting year relate to 15 months and to that extent are not comparable with the figures of the previous year.

9. Since the current Financial year commenced on 1st January 2011, the provisions of the revised Schedule VI of the Companies Act, 1956 are not applicable. Hence the accounts have been presented in accordance with old Schedule VI.

10. Disclosure as per Accounting Standard -15 (Revised) - Employee Benefits.


Dec 31, 2010

Year Fififteen months ended ended Dec. 31, 2010 Dec. 31, 2009

1. Contingent liabilities in respect of

Guarantees issued by bankers 348,620 648,620

Contracts to be executed on capital account and not provided for 107,896,458 21,619,485 (Net of advance paid)

Disputed Income tax demand/liabilities not provided for 106,611,673 33,291

Claims against the Company for Excise Duty and others including Industrial disputes not acknowledged as debt and not provided for 160,400,807 214,531,083

Disputed Purchase tax 6k Sales tax liabilities not provided for 154,750,009 157,122,791

2. Managerial Remuneration under section 198 of the Companies Act, 1956 Sitting fees to Directors 450,000 370,000

(Managing Director has not been paid any sitting fees or remuneration)

3. Cane Development expenses include cane price of Rs. 394.38 million (Previous year Rs.557.12 million) paid over and above Fair and Remunerative Price.

4. The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure regarding :

a. Amount due and outstanding to suppliers as at the end of the accounting year,

b. Interest paid during the year,

c. Interest payable at the end of the accounting year and

d. Interest accrued and unpaid at the end of the accounting year, have not been provided.

5. The Company has given Corporate Guarantee of Rs. 7251.30 million to Banks/Financial Institutions for the Term Loans and Working Capital facilities sanctioned to its subsidiary and associate companies. The total amount outstanding in respect of such loans as on December 31, 2010 is Rs. 3632.27 million.

6. Finance Lease

a) Tire Company has acquired mechanical Harvestors on lease, the fair value of which aggregates to Rs. 60.40 Million. As per Accounting Standard -19 the Company has capitalised the said Harvestors at their fair value as the leases are in the nature of finance lease as defined in Accounting Standard -19. Lease Payments are apportioned between finance charges and outstanding liabilities.

7. Deferred Tax

In accordance with Accounting Standard - 22, Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the rates and the laws that have been enacted or subsequently enacted as of the Balance Sheet date. Deferred tax assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realised in future as evidenced by the consistent past performance rendered by all the plants of the Company and the likelihood of such plants performing to their potential in future.

8. Previous year figures have been regrouped wherever necessary to confirm to current years classification.

9. The figures for the reported accounting year relate to 12 months and to that extent are not comparable with the figures of the previous accounting period which is of 15 months.

11. Disclosure as per Accouting Standard -15 (Revised) - Employee Benefits.

1. Defined Contribution Plans

Contribution of Rs.l 1.57 million to defined contribution plans is recognized as expense and included in the employees cost in the Profit and Loss Account.

I 3. Related Party disclosures

a) Names of the Related Parties

1. Subsidiary Company Terra Energy Ltd.,

2. Associate Company Shree Ambika Sugars Ltd.,

b) Key Managerial Personnel R.V. Tyagarajan, Chairman and Managing Director

Note: Related party relationships are as identified by management and relied upon by the auditors


Dec 31, 2009

Fifteen months Year ended ended Dec. 31,2009 Sept. 30, 2008

1.Contingent Liabilities in respect of Guarantees issued by bankers 648,620 348,620

Contracts to be executed on capital account and not provided for (Net of advance paid) 21,619,485 60,953,245

Disputed Income tax demand/liabil ities not provided for 33,291 33,291 Claims against the Company for Excise Duty and others including

Industrial disputes not acknowledged as debt and not provided for 214,531,083 265,262,683

Disputed Purchase tax & Sales tax liabilities not provided for 157,122,791 157,122,791

2. Cane Development expenses include cane price of Rs. 557.12 million paid over and above Statutory Minimum Price/Fair and Remunerative Price.

3. The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure regarding a) Amount due and Outstanding to suppliers as at the end of the accounting year, b) Interest paid during the year, c) Interest payable at the end of the accounting year and d) Interest accrued and unpaid at the end of the accounting year, have not been provided.

4. The Company has given Corporate Guarantee of Rs. 6351.30 million to Banks/Financial Institutions for the Term Loans and Working Capital facilities sanctioned to its subsidiary and associate companies. The total amount outstanding in respect of such loans as on December 31, 2009 is Rs. 3749.83 million.

5. Deferred Tax

In accordance with Accounting Standard - 22, Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the rates and the laws that have been enacted or subsequently enacted as of the Balance Sheet date.

Deferred tax assets arising from temporary timing differences are recognized to the extent there is virtual certainty that the assets can be realised in future as evidenced by the consistent past performance rendered by all the plants of the Company and the likelihood of such plants performing to their potential in future.

6. Previous year figures have been regrouped wherever necessary to confirm to current years classification.

7. The figures for the current accounting period relate to 15 months and to the extent are not comparable with the figures of the previous year.

8. Disclosure as per Accounting Standard - 15 (Revised) - Employee Benefits

1. Defined Contribution plans

Contribution of Rs. 12.64 million to defined contribution plans is recognized as expense and included in the emloyee cost in the Profit and Loss Account.

Segment Reporting

1. The Companys operations telate to manufacture of sugat and alcohol.

2. The Company is expotting sugat apatt from sale in the domestic market. The analysis of geographical segment is demarcated into local and expotts.

3. Intet segment Ttansfet Pricing Policy: Molasses supplied to Alcohol segment is based on matket ptice.

9. Related Party disclosures

a) Names of the Related Parties

1. Subsidiary Company Terra Energy Ltd.,

2. Associate Company Shree Ambika Sugars Ltd.,

b) Key Managerial Personnel R.V. Tyagaraj an, Chairman and Managing Director

Note: Related party relationships are as identified by management and relied upon by the auditors

 
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