Notes to Accounts of EID Parry (India) Ltd.
Mar 31, 2022
The fair value of the Company''s investment properties as at March 31, 2022 and March 31, 2021 have been arrived at on the basis of a valuation carried out by M/s. Value Assessors & Surveyors Private Limited, independent valuers not related to the Company. M/s. Value Assessors & Surveyors Private Limited are registered with the authority which governs the valuers in India, and they have appropriate qualifications and relevant experience in the valuation of properties in the relevant locations. Fair value was derived using the market comparable approach based on recent market/government guideline prices without any significant adjustments being made to the market observable data.
In estimating the fair value of the properties, the highest and best use of the properties is their current use.
For rental income earned and direct operating expenses incurred in connection with investment property refer note 25 and note
37.1 respectively.
(i) Impairment tests for goodwill:
During the year ended March 31, 2021, the Company had assessed the Goodwill for impairment and based on the assessment, Goodwill of '' 1,452 Lakh was impaired. The Goodwill represents goodwill accounted on the date of acquisition of erstwhile subsidiary Parrys Sugar Industries Limited as reflected in the Consolidated Financial Statements of the Company for the year ended March 31, 2015 which was subsequently merged with the Company (which was a common control entity).
The Company has determined each factory location as a cash generating unit (CGU). The entire goodwill is attributable to the Company''s factory at Ramdurg.
(ii) Significant estimate: key assumptions used for value-in-use calculations:
The Company tests whether goodwill has suffered any impairment on an annual basis. For the current and previous financial year, the recoverable amount of the CGUs was determined based on value-in-use calculations which require the use of assumptions. The factory at Ramdurg is operated on a leased property. The lease period expires on September 2032 and the arrangement doesn''t contain a renewal clause. Therefore, cash flow projections based on financial budgets approved by management covering a eleven-year and six months period upto the end of lease term.
The trade receivables of the Company do not contain a significant financing component (also refer note 49.5) and accordingly, the Company has adopted the simplified approach under Ind AS 109 for recognition of impairment losses on trade receivables. Consequently, the disclosure of trade receivables into "Trade receivables which have significant increase in credit risk" and "Trade receivables which are credit impaired" has not been given since it is not relevant to the Company.
The Company uses other publicly available financial information and its own trading records before accepting any customer. The Company''s exposure is continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
The Board of Directors of the Company in their meeting held on February 01, 2019 have approved the sale of property, plant and equipment of the Puducherry factory of the Company in next 12 months. Consequently, the Company has sold the plant and equipment of Puducherry factory and loss of '' 1,373 Lakh on disposal has been disclosed as an exceptional item (refer note 33).
The Board of Directors of the Company in their meeting held on December 31,2020 have approved the sale of property, plant and equipment of the Pettavaithalai factory of the Company in next 12 months. The Company has identified a potential buyer for the sale. Since the carrying value of the assets exceed the fair value less cost to sell, an impairment loss of '' 5,064 Lakh was recognised on reclassification of the assets as held for sale as at March 31, 2021. No impairment loss has been recorded for the year ended March 31, 2022.
16.3 Terms attached to Equity Shares:
The Company has one class of equity share having a par value of '' 1 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the 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.
Share options granted under the Company''s employee share option plan carry no rights to dividends and no voting rights.
16.4 Details of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date
During the year 2017-18, 10,74,861 equity shares of '' 1 each fully paid up were allotted to shareholders of Parrys Sugar Industries Limited (PSIL) other than the Company in the proportion of 2 equity shares of '' 1 each in the Company for every 13 equity shares of '' 10 each held in the PSIL pursuant to the Scheme of Arrangement between PSIL and the Company.
The company declared interim dividend of '' 5.5 per share on November 08, 2021 (total dividend '' 9,751 Lakh) and second interim dividend of '' 5.5 per share on February 28, 2022 (total dividend '' 9,756 Lakh) which were paid in December 2021 and March 2022 to the holders of fully paid equity shares.
16.6 Refer note 50 for the shares reserved for issue under Employee stock option plans.
These amounts represent warrants issued to the Shareholders which remained unpresented as on March 31, 2022 and March 31, 2021 respectively.
During the year, '' Nil (March 31, 2021 - '' Nil) was transferred to the Investor Education and Protection Fund and there are no amounts due to be transferred to Investor Education and Protection Fund.
Represents amounts payable to the bank for payments made by the bank to farmers for cane supplied to the Company.
There are no critical judgements involved in the determination of the amount and timing of revenue. For details of disaggregated revenue refer note 46.
The Company recognises income based on the export obligation fulfilled. For the year ended March 31, 2022, the export obligation is based on the allocation of 8,747 MT made by the Government. For the year ended March 31, 2021, the export obligation is based on the allocation of 74,359 MT made by the Government. The unfulfilled obligation as at March 31, 2021 based on the allocated quantity was 33,322 MT. The obligation has been fulfilled during the current year.
The Code on Social Security, 2020 ("Code") relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
The Company has evaluated the impact of the recent Supreme Court Judgment in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In this regard, appropriate provision has been made in the Financial Statements.
Exceptional item of '' 1,373 Lakh for the year ended March 31, 2022 represents loss on sale of Plant and Equipment of Puducherry factory which was classified as Asset Held for Sale as at March 31, 2021.
Exceptional items for the year ended March 31, 2021 include the following:
a. '' 36,281 Lakh gain on sale of 58,50,000 number of equity shares representing 2% stake in its subsidiary, Coromandel International Limited at '' 629.19 per share aggregating to a value of '' 36,676 Lakh in the quarter ended June 30, 2020.
b. '' 46,444 Lakh gain on sale of 58,50,000 number of equity shares representing 2% stake in its subsidiary, Coromandel International Limited at '' 800.70 per share aggregating to a value of '' 46,841 Lakh in the quarter ended December 31, 2020.
c. The Board at its meeting held on July 29, 2019 had approved the closure of the sugar unit at Pudukkottai due to non-availability of adequate sugarcane. The Board has approved the closure of the sugar unit at Pettavaithalai due to non-availability of adequate sugarcane as the expectation of the revival of cane cultivation in the areas is low due to a variety of factors. The Company proposed to transfer the assets of the units to its other units/dispose off other assets as it deems appropriate. Consequently, the Company has charged '' 9,628 Lakh to the profit and loss account (representing '' 6,857 Lakh of impairment charges and '' 2,771 Lakh towards dismantling/transportation expenses) for the year ended March 31, 2021.
d. The Company has impaired Goodwill of '' 1,452 Lakh relating to Ramdurg factory based on evaluation of the recoverability, being a leased plant.
e. The Company has impaired '' 128 Lakh relating to fixed assets of its Lycopene facility in Pune.
Note 34 - Expenditure incurred for Corporate Social Responsibility
EID Parry has been carrying out CSR activities for a long time through AMM Foundation (AMM) while also extending CSR activities to the local communities in and around its factories located in the States of Tamil Nadu, Andhra Pradesh and Karnataka. EID Parry had identified the following broad program areas with focus on quality service delivery and empowerment: Providing basic health care facilities to economically backward societies across geographical areas, Improving access to education, Provision of Skill Development/Vocational Training, Rural Development, Environmental Sustainability, Promoting Sports, Arts & Culture and Sustainable livelihood.
The spread of COVID 19 has severely impacted businesses around the globe. Due to outbreak of coronavirus global pandemic, Government of India, implemented a Pan India lockdown from March 2020 with certain relaxations and exceptions. The Company''s significant business is sugar and it has been identified as an essential service. The Company''s factory was operating during the lockdown except for few days in the initial lock down period and was able to complete the crushing of sugarcane as per the schedule with slight delay. The Company has made detailed assessment of its liquidity position including the ability of the Company to continue as going concern. The Company has sanctioned credit facilities which can be used as and when necessary and has the ability to repay the debts as and when it falls due.
Management believes that it has taken into account all the possible impact of events arising from COVID 19 pandemic in the preparation of the standalone financial statements for the year ended March 31, 2022, which are not significant.
Consequent to the Company''s decision to move to the new tax regime under section 115BAA of the Income Tax Act, 1961, the Company has remeasured its deferred tax balance and has written off the unutilised Minimum Alternate Tax credit. The charge to the statement of profit and loss and other comprehensive income consequent to moving to a new tax regime for the year ended March 31, 2021 is '' 8,890 Lakh and '' 74 Lakh respectively.
45.3 Income tax directly recognised in equity
No tax has been recognised directly in equity.
Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided, and in respect of the following segments tabulated below. The directors of the Company have chosen to organise the Company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the Company. Specifically the Company''s reportable segments under Ind AS 108 are as follows.
Revenue and expenses directly attributable to segments are reported under each reportable segment. Other expenses and income which are not attributable or allocable to segments have been disclosed as net unallocable expenses/income.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant and equipment that are used interchangeably among segments are not allocated to reportable segments.
Operating segments represent the products also and therefore separate disclosure of revenue from major products is not made.
A. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised '' 613 Lakh (year ended March 31, 2021 - '' 614 Lakh) for Provident Fund contributions, ''297 Lakh (year ended March 31, 2021 - ''292 Lakh) for Superannuation Fund contributions and ''1 Lakh (year ended March 31, 2021 - ''1 Lakh) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
B. Defined benefit plans:
Gratuity -
In respect of Gratuity plan, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as March 31, 2022 by Mr. Khushwant Pahwa, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method. The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the Balance Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC).
The Company is exposed to various risks in providing the above gratuity benefit which are as follows:
Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).
Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.
Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
The Company has invested the plan assets with the insurer managed funds. The insurance company has invested the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds, Money Market Instruments and Time Deposits. The expected rate of return on plan asset is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.
Please note that the sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods of assumptions used in preparing the sensitivity analysis from prior years. Positive represents increase and negative represents decrease in obligation.
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The Insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in an increase in liability without corresponding increase in the asset).
The Company''s best estimate of the contribution expected to be paid to the plan during the next year is ''590 Lakh (2021 - ''903 Lakh).
C. Note on Provident Fund:
With respect to employees,who are covered under Provident Fund Trust adminstered by the Company, the Company shall make good deficiency, if any in the interest rate declared by Trust over statutory lmit. Having regards to the assets of the Fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.
The actuary has assessed the calculations of the Interest Rate Guarantees based on the guidance note issued by the Institute of Actuaries of India.
Note 49 - Financial instruments49.1 Capital management
The Company''s capital management is intended to maximise the return to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance.
The Company determines the amount of capital required on the basis of annual and long-term operating plans and strategic investment plans. The funding requirements are met through equity and long-term/short-term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other reserves attributable to the equity shareholders of the Company. Net debt includes all long and short-term borrowings (including current maturities of long term debt) as reduced by cash and cash equivalents.
49.3 Financial risk management objectives
The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using financial instruments such as foreign currency forward contracts, interest and currency swaps to hedge risk exposures and appropriate risk management policies as detailed below. The use of these financial instruments is governed by the Company''s policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk and the investment of excess liquidity. The Company does not enter into trade financial instruments, including derivative financial instruments, for speculative purposes.
The Company''s financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
⢠Foreign currency risk
⢠Interest rate risk
⢠Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.
49.4.1 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Exports and imports
The Company has a forex policy in place whose objective is to reduce foreign exchange risk by deploying the appropriate hedging strategies (forward covers and options) and also by maintaining reasonable open exposures within approved parameters depending on the future outlook on currencies.
c. Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in US Dollar. The following table details the Company''s sensitivity to a 10% increase and decrease against the US Dollar on the outstanding balance. 10% is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 10% against the US Dollar. For a 10% weakening against the US Dollar, there would be a comparable impact on the profit or equity.
In management''s opinion the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of reporting period does not reflect the exposure during the year.
49.4.2 Interest rate risk management
The Company issues commercial papers, draws working capital demand loans, cash credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
a. Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.
If interest rate were to increase by 50 basis from March 31, 2022, in case of rupee borrowings and all other variables were held constant, additional net annual interest expense on floating rate borrowing would amount to approximately '' 31 Lakh (March 31,2021: '' 40 Lakh).
The Company is exposed to equity price risks arising from equity investments. Certain of the Company''s equity investments are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
a. Equity price sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 1% higher/lower other comprehensive income/equity for the year ended March 31, 2022 would increase/ decrease by '' 277 Lakh ('' 187 Lakh for the year ended March 31, 2021) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counterparties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as primarily it''s a cash and carry business except for institutional customers and government customers and its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets. There is no material expected credit loss based on the past experience. However, the Company assesses the impairment by specific items of trade receivable and has accordingly created loss allowance on trade receivables.
The Company has issued financial guarantee to its wholly owned subsidiary, Parry Sugars Refinery India Private Limited of '' Nil (March 31, 2021: '' 11,000 Lakh). Further the company has issued Letter of Credit to its subsidiaries US Nutraceuticals Inc. & Alimtec S.A. to the tune of '' 7,579 Lakh (March 31, 2021: '' 8,042 Lakh) during the year. Based on the financial performance of subsidiaries, the Company does not expect the guarantee liability to devolve on the Company.
The credit risk on cash and bank balances is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
49.6 Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The Company has access to financing facilities of which '' 1,08,485 Lakh (as at March 31, 2021: '' 71,998 Lakh) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
Some of the Company''s financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
53.1 The Tamilnadu Government declared State Advisory Price (SAP) for the sugar year 2013-14, 2014-15 and 2015-16. The Company has challenged the right of State Government to declare the SAP in the Hon''ble High Court of Madras. The matter is subjudice.
53.2 Future cash outflows in respect of the above referred matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.
53.3 The Income Tax Department/Commercial Tax Department/Central Excise and Service Tax and GST Authority has filed appeal against the favorable order passed by lower forum in favor of the Company in appropriate appellate forum to the extent of '' 1,961 Lakh. It is expected that there will not be any outflow of economic resources embodying economic benefits. Hence, no provision is considered necessary against the same.
53.4 The Income Tax Department has been adjusting the demand orders against other refunds receivable by the company in various assessment years, and accordingly this does not include interest, as applicable.
53.5 Certain Industrial Disputes are pending before Tribunal/High Courts. The liability of the Company in respect of these disputes depends upon the final outcome of such cases and the quantum of which is not currently ascertainable.
54 No proceeding has been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
55 The Company has not been declared wilful defaulter by any bank or financial institution or any other lender.
56 The Company has not had any transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of
Companies Act, 1956.
57 There are no charges or satisfaction pending to be registered with Registrar of Companies beyond the statutory time limit
58 The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013, read with the Companies (Restriction on number of Layers) Rules, 2017.
59 The Company does not have any transaction not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
60 The Company has not traded or invested in Crypto Currency or Virtual Currency during the year.
61 The Company has the following Core Investment Companies in the group:
1. Cholamandalam Financial Holdings Limited
2. Ambadi Investments Limited
62 Subsequent to the balance sheet, the Board of Directors of the Company''s subsidiary, Coromandel International Limited have recommended a final dividend of '' 6 per share (estimated dividend inflow for the Company would be '' 9,927 Lakh), which is subject to the approval by the subsidiary''s shareholders.
(g) Trade payables turnover ratio (times): Total Purchases (Closing Stock of Raw Materials Cost of materials consumed - Opening Stock of Raw Materials Purchases of Stock-in-trade)/Average Trade Payables
(h) Net capital turnover ratio (times): Net Sales/Working Capital
(i) Net profit ratio (%): Profit After Tax (after exceptional items)/Net Sales
(j) Return on Capital employed (%): Earnings (including exceptional item) before interest, tax, impairment, depreciation & amortisation/ Capital Employed (Tangible Net Worth Total Debt Deferred Tax Liability)
(k) Return on investment (%): (Final Value of Investment - Initial Value of Investment Dividend)/Initial Value of Investment
65 Utilisation of borrowed funds and share premium:
The Company has not advanced or loaned or invested funds to any other person/(s) or entity/(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
b. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
The Company has not received any fund from any person/(s) or entity/(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. Provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
66 The figures for the previous year have been reclassified/regrouped wherever necessary for better understanding and comparability.
67 Approval of Ind AS financial statements
The Ind AS financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors in their meeting held on May 17, 2022.
Mar 31, 2018
Corporate Information
E.I.D. Parry is a significant player in sugar with interests in promising areas of Bio Pesticides and Nutraceuticals. The company also has a significant presence in Farm Inputs business through its subsidiary, Coromandel International Limited.
E.I.D Parry together with its subsidiaries has nine sugar factories having a capacity to crush 45,800 Tonnes of Cane per day, generate 160 MW of power and four distilleries having a capacity of 234 KLPD. In the Bio Pesticides business, the Company offers an unique neem extract, Azadirachtin, having a good demand in the bio pesticide markets of developed countries. In the Nutraceuticals business, it holds a strong position in the growing wellness segment mainly catering to the world markets with its organic products.
1.1 Fair value of the Companyâs investment properties
The following table gives details of the fair value of the Companyâs investment properties as at March 31, 2018 and March 31, 2017:
The fair value of the Companyâs investment properties as at March 31, 2018 and March 31, 2017 have been arrived at on the basis of a valuation carried out by M/s.Value Assessors & Surveyors Private Limited, independent valuers not related to the Company. M/s.Value Assessors & Surveyors Private Limited are registered with the authority which governs the valuers in India, and they have appropriate qualifications and relevant experience in the valuation of properties in the relevant locations. Fair value was derived using the market comparable approach based on recent market/government guideline prices without any significant adjustments being made to the market observable data.
In estimating the fair value of the property, the current use is considered as the highest and best use.
NOTE 2A
Goodwill of Rs.1,452 Lakhs represents the goodwill accounted on the date of acquisition of erstwhile Subsidiary Parrys Sugar Industries Limited (Which was a Common control entity) as reflected in the Consolidated Financial Statements of the Company for the year ended March 31, 2015. The company has assessed the goodwill for impairment and based on the assessment no impairment has been considered.
* less than Rs.1 Lakh
3.1. The details of subsidiaries are given in the Note 51 - Related Party.
3.2. During the year, Company has invested in 3,05,24,330 Equity Shares of face value Rs.10 each at a premium of Rs.9 in Parry Sugars Refinery India Private Limited amounting to Rs.5,799 Lakhs.
3.3. During the year, Company has increased itâs stake in US Nutraceuticals LLC from 93.52% to 100% by investing an amount of Rs.750 Lakhs.
The credit period on sales of goods ranges from 10 to 60 days. No interest is charged on trade receivables up to the due date.
The company uses other publicly available financial information and its own trading records before accepting any customer. The companyâs exposure is continuously monitored and the aggregate value of transactions concluded is spread amongst approved counter parties. Refer Note No 51.5 for receivable from related parties
Of the trade receivables balance, customer balances which represent more than 5% of the total balance of trade receivable are given below.
The cost of inventories recognised as an expense during the year in respect of continuing operations was Rs.1,26,903 lakh (March 31, 2017: Rs.1,43,084 lakh).
The cost of inventories recognised as an expense includes Rs.1,152 Lakhs (2016-17: Rs. Nil) in respect of write-downs of inventory to net realisable value, and has been reduced by Nil (2016-17: Rs. Nil) in respect of reversal of such write downs.
Inventories includes Rs.29,160 Lakhs (2016-17: Rs. Nil) carried at fair value less cost to sell. The mode of valuation of inventories has been stated in note 1.15
NOTE 4
CASH AND CASH EQUIVALENTS
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks, cheques and drafts on hand. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the balance sheet as follows:
The Board of Directors of the Company in their meeting held on December 22, 2017 have approved the sale of Bio-pesticides division of the Company and its Investment in Parry America Inc (a wholly owned subsidiary of the Company) , to the companyâs subsidiary, Coromandel International Limited, with effective date as April 01, 2018 for a consideration of Rs.33,801 Lakhs. The shareholders through the postal ballot had approved the same on February 22, 2018. The proceeds of sale substantially exceeds the carrying amount of the related net assets and, accordingly, no impairment losses were recognised on the reclassification of these divisions as held for sale. The major classes of assets and liabilities of the Bio business at the end of the reporting period are as follows.
Analysis of Profit for the year from discontinued operations.
The result of the discontinued operations included in the Profit for the year are set out below. The Comparative profit and cash flows from discontinued operations have been presented as if these operations were discontinued in the prior year as well.
5.1 Terms attached to Equity Shares:
The Company has one class of equity share having a par value of Rs.1 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital on liquidation after meeting external liabilities will be in proportion to the number of equity shares held.
Share options granted under the Companyâs employee share option plan carry no rights to dividends and no voting rights.
5.2 Details of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date.
During the year, 10,74,861 equity shares of Rs.1 each fully paid up were allotted to shareholders of Parrys Sugar Industries Limited ( PSIL) other than the Company in the proportion of 2 equity shares of Rs.1 each in the company for every 13 equity shares of Rs.10 each held in the PSIL pursuant to the Scheme of Amalgamation between PSIL and the Company.
5.3 Dividend
Final dividend of Rs.3 per share is proposed for the year ended March 31, 2018. The dividend proposed by the Board of Directors is subject to the approval from the shareholders in the ensuing Annual General Meeting, upon which the liability will be recorded in the books.
The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gains or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item.
a. Working Capital Demand Loan availed from Indusind Bank of Rs.10,800 Lakhs @ 7.80% for 7 days and Rs.7,500 Lakhs from Kotak Mahindra Bank @ 8.05 % for of 7 days. (2017: Out of Rupee loan of Rs.2,300 Lakhs; Interest for Rs.500 lakhs is 7% and for rest it is 6.8%. Interest for USD denominated FCNR loan of Rs.7,360 Lakhs is 1.2%)
b. Working Capital facilities from State Bank of India are secured by hypothecation of sugar and other stocks, stores, book debts and liquid assets and further secured by a second charge over the immovable properties of the company and carries interest of Base rate/MCLR plus 1.25%
c. Interest for Citi Bank Loan of Rs.10,000 Lakh and Rs.9,800 Lakh is linked with 1 Month T-Bill for 2 months.
d. Net Debt Reconciliation
There are no dues to enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 which is on the basis of such parties having been identified by the management and relied upon by the auditors.
6.1 These amounts represent warrants issued to the Shareholders which remained unpresented as on March 31, 2018 .
6.2 During the year, Rs.22.51 Lakhs was transferred to the Investor Education and Protection Fund and there are no amount due to be transferred to Investor Education and Protection Fund.
Goods and service tax (GST) has been effective from July 1, 2017. Consequently excise duty, Value Added Tax (VAT), service tax. etc has been replaced with GST. Until June 30, 2017, âSale of Productsâ included amount excise duty recovered on sales. With effective from July 1, 2017, âSale of Productsâ excludes the amount of GST recovered. Accordingly revenue from âSale of Productsâ and âRevenue from Operationsâ for the year ended March 31, 2018 are not comparable with those of the previous year.
7.1. The weighted average capitalisation rate on funds borrowed is 7.83 % per annum (2016-17 - 7.86% per annum)
Note : Managerial remuneration above does not include gratuity and leave encashment benefit, since the same is computed actuarially for all the employees and the amount attributable to the managerial person cannot be ascertained separately.
NOTE 8
OPERATING LEASE ARRANGEMENTS
8.1 Company as a Lessee
The company has entered into a non cancellable operating lease agreement with Shri Dhanalaxmi Sahakari Sakkare Karkhane Niyamit,Ramdurg for the lease of sugar factory together with the specified assets on Built,Own,Operate and Transfer basis (BOOT) for a period of 25 years till 2032.
8.2 Payments recognised as expense
8.3 Non-cancellable operating lease commitments
8.4 Company as a Lessor
Payments recognised as Income
Note: The loan is repayable on demand and carries interest @ 9%. This loan has been given for general business purposes
NOTE 9
Exceptional item represents one-time settlement of additional cane price for sugar seasons 2013-14 to 2016-17 which has been agreed with farmers registered with the Company in Tamilnadu.
NOTE 10
DEFERRED TAX BALANCES
The following is the analysis of deferred tax assets/(liabilities) presented in the balance sheet:
The tax rate used for the years 2017-18 and 2016-17 reconciliations above is the corporate tax rate of 34.944% for 17-18 & 34.608% for 16-17 payable by corporate entities in India on taxable profits under the Indian tax law.
10.2 Income tax directly recognised in equity
No tax has been recognised directly in equity.
Note 11
SEGMENT INFORMATION
Information reported to the chief operating decision maker (CODM) for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided, and in respect of the following segments tabulated below. The directors of the Company have chosen to organise the Company around differences in products and services. No operating segments have been aggregated in arriving at the reportable segments of the Company. Specifally the Companyâs reportable segments under Ind AS 108 are as follows.
Revenue and expenses directly attributable to segments are reported under each reportable segment. Other expenses and income which are not attributable or allocable to segments have been disclosed as net unallocable expenses/income.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant and equipment that are used interchangeably among segments are not allocated to reportable segments.
Operating segments represent the products also and therefore separate disclosure of revenue from major products is not made.
Inter segment Transfer Pricing:
Inter Segment prices are normally negotiated amongst the segments with reference to cost, market prices and business risks, within an overall optimisation objective for the enterprise.
Note 12 EMPLOYEE BENEFIT PLANS
A. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.463 Lakh (Year ended March 31, 2017 - Rs.368 Lakh) for Provident Fund contributions, Rs.503 Lakh (Year ended March 31, 2017- Rs.458 Lakh) for Superannuation Fund contributions and Rs.4 Lakh (Year ended March 31, 2017 - Rs.2 Lakh) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The above amounts include contribution of Rs.30 Lakhs for Provident fund, Rs.34 Lakhs for superannuation Rs.3 Lakhs for Employee State Insurance Scheme towards discontinued operations.
B. Defined benefit plans :
Gratuity :
In respect of Gratuity plan, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as March 31, 2018 by Mr.Khushwant Pahwa, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit cost method. The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the Balance Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC).
The Company is exposed to various risks in providing the above gratuity benefit which are as follows:
Interest Rate Risk : The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).
Investment Risk : The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Salary Escalation Risk : The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the planâs liability.
Demographic Risk : The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
The Company has invested the plan assets with the insurer managed funds. The insurance company has invested the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds, Money Market Instruments and Time Deposits. The expected rate of return on plan asset is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:
Please note that the sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods of assumptions used in preparing the sensitivity analysis from prior years. Negative represents increase and positive represents decrease in obligation.
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The Insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset)
The Companyâs best estimate of the contribution expected to be paid to the plan during the next year is Rs.300 lakh (2017: Rs.277 lakh).
C. Note on Provident Fund:
With respect to employees,who are covered under Provident Fund Trust administered by the company,the company shall make good deficiency,if any in the interest rate declared by Trust over statutory limit. Having regards to the assets of the Fund and the return on the investments, the company does not expect any deficiency in the foreseeable future
The actuary has assessed for the calculations of the Interest Rate Guarantees based on the guidance note issued by the Institute of Actuaries of India . The disclosures required under Ind AS 19 is as set out below:
NOTE 13
FINANCIAL INSTRUMENTS
13.1 Capital management
The Companyâs capital management is intended to maximise the return to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance.
The Company determines the amount of capital required on the basis of annual and long-term operating plans and strategic investment plans. The funding requirements are met through equity and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using financial instruments such as foreign currency forward contracts, interest and currency swaps to hedge risk exposures and appropriate risk management policies as detailed below. The use of these financial instruments is governed by the Companyâs policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk and the investment of excess liquidity. The Company does not enter into trade financial instruments, including derivative financial instruments, for speculative purposes.
The Companyâs financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
- Foreign currency risk
- Interest rate risk
- Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Companyâs exposure to market risks or the manner in which these risks are being managed and measured.
13.1.1 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Exports and imports
2. Foreign currency borrowings in the form of Foreign Currency Non-Repatriable (B) loans (FCNRB), packing credit etc. availed for meeting its funding requirements
The Company has a forex policy in place whose objective is to reduce foreign exchange risk by deploying the appropriate hedging strategies (forward covers and options) and also by maintaining reasonable open exposures within approved parameters depending on the future outlook on currencies.
The foreign currency risk on above exposure is mitigated by derivative contracts. The outstanding contracts as at the Balance Sheet date are as follows:
At March 31, 2018, the aggregate amount of gains under forward foreign exchange contracts recognised in other comprehensive income and accumulated in the cash flow hedging reserve net of taxes relating to the exposure on these anticipated future transactions is Rs.10 lakhs (March 31, 2017: Rs.143 lakh). It is anticipated that the sales will take place over the next two year period, at which time the amount deferred in equity will be reclassified to profit or loss.
c. Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in US Dollar. The following table details the Companyâs sensitivity to a 10% increase and decrease against the US Dollar. 10% is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 10% against the US Dollar. For a 10% weakening against the US Dollar, there would be a comparable impact on the profit or equity.
In managementâs opinion the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of reporting period does not reflect the exposure during the year.
13.1.2 Interest rate risk management
The Company issues commercial papers, draws working capital demand Loans, cash credit, foreign currency borrowings, Packing Credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest rate risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in interest rates.
If interest rate were to increase by 50 basis from March 31, 2018, in case of rupee borrowings and all other variables were held constant, additional net annual interest expense on floating rate borrowing would amount to approximately Rs.182 lakhs (March 31, 2017: Rs.225 lakhs).
13.1.3 Other price risks
The Company is exposed to equity price risks arising from equity investments. Certain of the Companyâs equity investments are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
Equity price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 1% higher/lower other comprehensive income/ equity for the year ended March 31, 2018 would increase/ decrease by Rs.146 Lakhs (Rs.69 Lakh for the year ended March 31, 2017) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant
13.2 Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counterparties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets. There is no material expected credit loss based on the past experience. However, the Company assesses the impairment by specific items of trade receivable and has accordingly created loss allowance on trade receivables.
The Company has issued financial guarantee to its wholly owned subsidiary, Parry Sugars Refinery India Private Limited of Rs.30,000 lakh (March 31, 2017: Rs.36,000 lakh). Further the company has issued Letter of Credit to its subsidiaries US Nutraceuticals LLC & Alimtec SA to the tune of Rs.2,215 Lakhs (March 31, 2017: Rs.908 lakh) during the year. Based on the financial performance of subsidiaries, the Company does not expect the guarantee liability to devolve on the Company.
The credit risk on cash and bank balances is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The table below provides details regarding the contractual maturities of non-derivative financial liabilities including estimated interest payments as at March 31, 2018:
The following table details the Companyâs maturity analysis for its derivative financial instruments. The table has been drawn up based on the undiscounted estimated cash flows determined by reference to the projected market rates at the end of the reporting period. A positive amount represents an anticipated cash inflow and a negative amount represents an anticipated cash outflow.
13.3 Financing facilities
The Company has access to financing facilities of which Rs.93,988 Lakhs (as at March 31, 2017: Rs.61,848 Lakhs) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
13.4 Fair value measurements
Some of the Companyâs financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
Notes:
1. There were no transfers between Level 1 and 2 in the period.
2. The Level 1 financial instruments are measured using quotes in active market
3. The following table shows the valuation technique and key input used for Level 2:
1. In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings and other financial assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term maturities of these instruments.
2. The fair values of the financial assets and financial liabilities included above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.
NOTE 14
SHARE BASED PAYMENTS:
14. 1 Employee share option plan of the Company
14.1.1 Details of the employee share option plans of the Company
The Company has share option scheme for executives and senior employees of the Company. As approved by the shareholders at previous annual general meetings, ESOP schemes will be administered by the Nomination and Remuneration committee of the Board of Directors.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The following share-based payment arrangement were in existence during the current and prior years
14.1.2 Fair value of share options granted in a year
A. Grant Registration ID : GT06FEB2018 :-
The weighted average fair value of the share options granted during the financial year is Rs.125.20. Options were priced using Black Scholes model of option pricing. The expected volatility is based on historical volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility . Inputs into the model is as follows
B. Grant Registration ID : GT06FEB2018A :-
The weighted average fair value of the share options granted during the financial year is Rs.119.15. Options were priced using Black Scholes model of option pricing. The expected price volatility is based on historical volatility (based on the remaining life of the options) , adjusted for any expected changes to future volatility. Inputs into the model is as follows
Note 15
Related Party Disclosure for the year ended March 31, 2018
15.1. Subsidiary Companies/ Entities
01. Coromandel International Ltd
02. Parry Chemicals Ltd
03. CFL Mauritius Limited
04. Coromandel Brasil Limitada - LLP,Brazil
05. Liberty Pesticides and Fertilisers Limited
06. Dare Investments Ltd
07. Alimtec S.A
08. Sabero Europe BV ,Netherlands
09. Sabero Australia Pty Ltd
10. Sabero Organics America SA,Brazil
11. Sabero Argentina SA
12. Coromandel Agronegoious De Mexico S. A C. V.
13. Parry America Inc.
14. Parrys Investments Limited
15. Parrys Sugar Limited
16. Parry Infrastructure Company Private Limited
17. US Nutraceuticals LLC
18. Parry Agrochem Exports Limited
19. Parry Sugars Refinery India Private Limited
20. Parry International DMCC
15.2. Investing Party Group
1. Ambadi Investment Limited ( Investing Party)
2. Parry Enterprises India Limited
3. Parry Agro Industries Limited
15.3. Other related parties
1. Parry Group Staff Provident Fund
15.4. Key Management Personnel (KMP)
1. Mr. V Ramesh, Managing Director (upto July 31, 2017)
2. Mr. S Suresh, Managing Director
Note : Related Party Relationships are as identified by the management and relied upon by the auditors.
16.1 The Tamilnadu Government declared State Advisory Price (SAP) for the sugar year 2013-14,2014-15 and 2015-16. The Company has challenged the right of State Government to declare the SAP in the Honâble High Court of Madras. The matter is subjudice.
16.2 Future cash outflows in respect of the above referred matters are determinable only on receipt of judgements / decisions pending at various forums / authorities
16.3 The Income Tax Department/Commercial Tax Department/Central Excise and Service Tax and GST Authority has filed appeal against the favorable order passed by lower forum in favor of the Company in appropriate appellate forum to the extent of Rs.2,165 lakh. It is expected that there will not be any outflow of economic resources embodying economic benefits. Hence, no provision is considered necessary against the same.
17 The figures for the previous year have been reclassified / regrouped wherever necessary for better understanding and comparability
18 Approval of financial statements
The financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors in their meeting held on May 09, 2018
Mar 31, 2017
NOTE 1A
Goodwi1l of Rs, 1,452 Lakh represents the goodwill accounted on the date of acquisition of erstwhile Subsidiary Parrys Sugar Industries Limited (Which was a Common control entity) as reflected in the Consolidated Financial Statements of the Company for the year ended March 31, 2015.
* less than Rs, 1 Lakh
1. The details of material subsidiaries are given in the Note 52 - Related Party.
2. During the year ended March 2017, the Company has converted 10% 1,13,00,000 preference shares of Rs, 100/- each and 8% 28,00,000 preference shares of Rs, 100/- each respectively of Parry Sugars Refinery India Private Limited aggregating to Rs, 14,100 Lakh in to 10,44,44,445 equity shares of Rs, 10 each of Parry Sugars Refinery India Private Limited.
3. During the year, Company has invested in 9,00,000 Equity Shares of Rs, 10 each in Parrys Investments Limited amounting to Rs, 90 Lakh.
The credit period on sales of goods ranges from 10 to 120 days. No interest is charged on trade receivables up to the due date.
The company uses other publicly available financial information and its own trading records before accepting any customer. The companyâs exposure is continuously monitored and the aggregate value of transactions concluded is spread amongst approved counter parties.
Trade receivable includes an amount of Rs, 388 Lakh relating to buffer stock subsidy receivable from Government of India. South India Sugar Mills Association (SISMA) Tamilnadu has filed a case with the Honourable Madras High Court on behalf of the sugar mills for recovery of the subsidy, to which the Company is a party. Also considering the other follow up actions taken, the Company believes that the said amount, which is net of irrecoverable portions written off by the Company in earlier years, and due from Government of India is fully recoverable and accordingly no loss allowance has been considered for the same.
The cost of inventories recognized as an expense during the year was Rs, 1,41,509 lakh (March 31, 2016: Rs, 1,55,083 lakh).
The cost of inventories recognized as an expense includes Nil (2015-16: Rs, 79 lakh) in respect of write-downs of inventory to net realizable value, and has been reduced by Rs, 79 lakh (2015-16: Nil) in respect of reversal of such write downs.
Finished goods includes inventories worth Nil (2015-16: Rs, 5,526 lakh) carried at fair value less cost to sell. The mode of valuation of inventories has been stated in note 1.16.
4 Terms attached to Equity Shares:
The Company has one class of equity share having a par value of '' 1 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the 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.
Share options granted under the Companyâs employee share option plan carry no rights to dividends and no voting rights.
5 Details of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date During the year ended March 31, 2013 18,38,578 equity shares of Rs, 1 each fully paid up were allotted to shareholders of Parrys Sugar Industries Limited ( PSIL) other than the Company in the proportion of 5 equity shares of Rs, 1 each in the company for every 19 equity shares of Rs, 10 each held in the PSIL pursuant to the Scheme of Arrangement between PSIL and the Company .
The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gains or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognized and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item.
The amount that can be distributed by the Company as dividends to its equity shareholders is determined based on the separate financial statements of the Company and also considering the requirements of the Companies Act, 2013. Thus, the amounts reported above are not distributable in entirety.
a. Packing credit facility availed in '' has been totally repaid in current year ( 2016 - 8.90%; 2015 - 9.75%).
b. Commercial papers carry an average coupon discount rate of 6.55% (2016: 7.8% and 2015: 8.73%). Maximum amount outstanding at any time during the year was Rs, 35,000 lakh (2016: Rs, 85,000 lakh and 2015: Rs, 79,000 lakh).
c. Working Capital facilities from State Bank of India are secured by hypothecation of sugar and other stocks, stores, book debts and liquid assets and further secured by a second charge over the immovable properties of the company (other than Pugalur unit) and a third charge on the movable and immovable properties of the Pugalur sugar unit and carries interest of Base rate/MCLR plus 1.25%.
d. Out of Rupee Loan of Rs, 2,300 lakh ; Interest for Rs, 500 Lakh is 7% and for rest it is 6.8%.Both are repayable at the end of one year from the date of disbursement. Interest for USD Denominated FCNR loan of Rs, 7,360 lakh is 1.20% and repayable at the end of the one year from date of disbursement. The entire FCNR loan and its interest has been fully hedged. These loan are backed by Indusind Bank Letter of Credit (SBLC).
There are no dues to enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 which is on the basis of such parties having been identified by the management and relied upon by the auditors.
* Includes Retention money and Investment money deposits.
6 These amounts represent warrants issued to the Shareholders which remained un-presented as on March 31,2017
7 During the year, Rs, 107 lakh was transferred to the Investor Education and Protection Fund and there are no amount due to be transferred to Investor Education and Protection Fund.
Note : The loan is repayable on demand and carries interest.
NOTE 2
AMALGAMATION OF PARRYS SUGAR INDUSTRIES LIMITED WITH THE COMPANY
i. Pursuant to the scheme of amalgamation of Parrys Sugar Industries Limited- a subsidiary (transferor company) with the Company, as sanctioned by the National Company Law Tribunal vide their order dated April 21, 2017, the assets and liabilities of the transferor company were transferred to and vested with the Company with effect from the appointed date, April 1, 2016. The effective date of amalgamation is April 25, 2017 on which date, the copy of the order of the court sanctioning the scheme has been filed with the Registrar of Companies.
ii. The transferor company is engaged in the business of manufacture and sale of Sugar products and power.
iii. The amalgamation being a common control transaction has been accounted for under the âPooling of interestâ method as prescribed by Ind AS 103 on Business Combinations. Accordingly, the scheme amalgamation has been given effect to retrospectively from April 1,2015.
iv. Consequent to the scheme of amalgamation, the authorized equity share capital of the Company stands increased from 2,12,50,00,000 equity shares of Rs, 1/- each, aggregating to Rs, 21,250 Lakh to 2,34,40,00,000 equity shares of Rs, 1/- each aggregating to Rs, 23,440 Lakh and the authorized preference share capital of the Company stands increased from 50,00,000 preference shares of Rs, 100/- each aggregating to Rs, 5,000 lakh to 2,03,10,000 preference shares of Rs, 100/- each aggregating to Rs, 20,310 lakh.
The tax rate used for the financial years 2016-17 and 2015-16 reconciliations above, is the corporate tax rate of 34.608% payable by corporate entities in India on taxable profits under the Indian tax law.
8 Income tax directly recognized in equity On transition to Ind AS, the Company has recognized deferred tax liability of Rs, 1,906 lakh in equity arising from fair value gain of Rs, 9,250 lakh in unlisted equity investments through Other comprehensive income
Revenue and expenses directly attributable to segments are reported under each reportable segment. Other expenses and income which are not attributable or allocable to segments have been disclosed as net un-allocable expenses/income.
Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as un-allocable. Property, plant and equipment that are used interchangeably among segments are not allocated to reportable segments.
Operating segments represent also and therefore, separate disclosure of revenue from major products is not made.
Inter segment Transfer Pricing:
Inter Segment prices are normally negotiated amongst the segments with reference to cost, market prices and business risks, within an overall optimisation objective for the enterprise.
* Non-current assets exclude those relating to Investments, Deferred tax assets and Non-current financial assets.
NOTE 3
A. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs, 368 Lakh (Year ended March 31, 2016 - Rs, 359 Lakh) for Provident Fund contributions, Rs, 458 Lakh (Year ended March 31, 2016- Rs, 443 Lakh) for Superannuation Fund contributions and Rs, 2 Lakh (Year ended March 31, 2016 -Rs, 2 Lakh) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
B. Defined benefit plans :
Gratuity -
In respect of Gratuity plan, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as March 31, 2017 by Mr.Khushwant Pahwa, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit cost method. The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the Balance Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC).
The Company is exposed to various risks in providing the above gratuity benefit which are as follows:
Interest Rate risk : The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).
Investment Risk : The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Salary Escalation Risk : The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the planâs liability.
Demographic Risk : The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
The Company has invested the plan assets with the insurer managed funds. The insurance company has invested the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds, Money Market Instruments and Time Deposits. The expected rate of return on plan asset is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation.
Sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.
There was no change in the methods of assumptions used in preparing the sensitivity analysis from prior years.
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset)
The Companyâs best estimate of the contribution expected to be paid to the plan during the next year is Rs, 277 lakh (2016: Rs, 718 lakh).
C. Note on Provident Fund:
With respect to employees, who are covered under Provident Fund Trust administered by the company, the company shall make good deficiency, if any in the interest rate declared by Trust over statutory Limit. Having regards to the assets of the Fund and the return on the investments, the company does not expect any deficiency in the foreseeable future
9 Capital management
The Companyâs capital management is intended to maximize the return to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance.
The Company determines the amount of capital required on the basis of annual and long-term operating plans and strategic investment plans. The funding requirements are met through equity and long-term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
The following table summarizes the capital of the Company:
10 Financial risk management objectives
The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimize the effects of these risks by using financial instruments such as foreign currency forward contracts, interest and currency swaps to hedge risk exposures and appropriate risk management policies as detailed below. The use of these financial instruments is governed by the Companyâs policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk and the investment of excess liquidity. The Company does not enter into trade financial instruments, including derivative financial instruments, for speculative purposes.
11 Market risk
The Companyâs financial instruments are exposed to market rate changes. The Company is exposed to the following significant market risks:
- Foreign currency risk
- Interest rate risk
- Other price risk
Market risk exposures are measured using sensitivity analysis. There has been no change to the Companyâs exposure to market risks or the manner in which these risks are being managed and measured.
12 Foreign currency risk management
The Company is exposed to foreign exchange risk on account of following:
1. Exports and imports
2. Foreign currency borrowings in the form of Foreign Currency Non-Reparable (B) loans (FCNRB), packing credit etc. availed for meeting its funding requirements
The Company has a forex policy in place whose objective is to reduce foreign exchange risk by deploying the appropriate hedging strategies (forward covers and options) and also by maintaining reasonable open exposures within approved parameters depending on the future outlook on currencies.
The Company had entered into the swap contracts to hedge the interest and currency risks on the external commercial borrowings. There are no long-term borrowings outstanding as on 31 March 2017.
The forward contracts have been entered into to hedge highly probable forecast sale transactions and trade receivables. The swap contracts have been entered into to hedge the currency and interest rate risks on the external commercial borrowings of the Company.
At March 31, 2017, the aggregate amount of gains under forward foreign exchange contracts recognized in other comprehensive income and accumulated in the cash flow hedging reserve relating to the exposure on these anticipated future transactions is Rs, 143 lakh (March 31, 2016: losses Rs, 19 lakh and April 01, 2015: losses of Rs, 146 lakh). It is anticipated that the sales will take place over the next two year period, at which time the amount deferred in equity will be reclassified to profit or loss.
c. Foreign currency sensitivity analysis
The Company is mainly exposed to fluctuations in US Dollar. The following table details the Companyâs sensitivity to a 10% increase and decrease against the US Dollar. 10% is the sensitivity used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only net outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit or equity where the Rupee strengthens by 10% against the US Dollar. For a 10% weakening against the US Dollar, there would be a comparable impact on the profit or equity.
In managementâs opinion the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of reporting period does not reflect the exposure during the year.
13 Interest rate risk management
The Company issues commercial papers, draws working capital demand Loans, cash credit, foreign currency borrowings, Packing Credit etc. for meeting its funding requirements.
Interest rates on these borrowings are exposed to change in respective benchmark rates. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of the borrowings.
a. Interest rate swap contract
The Company had entered into the swap contracts to hedge the interest rate risks on the external commercial borrowings. Using interest rate swap, Company agrees to exchange floating interest rate in USD to INR fixed rate on agreed notional principal amounts. Such contracts enable the company to mitigate the interest rate risk. Refer details of the principal and interest rate swaps under Note 50.4.1(b). There are no outstanding external commercial borrowing as on March 31, 2017
b. Interest rate sensitivity analysis
The sensitivity analysis below has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis points increase or decrease in case of rupee borrowings is used when reporting interest rate risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in interest rates.
If interest rate were to increase by 50 basis from March 31, 2017, in case of rupee borrowings and all other variables were held constant, additional net annual interest expense on floating rate borrowing would amount to approximately Rs, 225 lakh (31 March 2016: Rs, 248 lakh).
14 Other price risks
The Company is exposed to equity price risks arising from equity investments. Certain equity investments of the Companyâs are held for strategic rather than trading purposes. The Company also holds certain other equity investments for trading purposes.
a. Equity price sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.
If equity prices had been 1% higher/lower other comprehensive income/ equity for the year ended 31 March 2017 would increase/ decrease by Rs, 69 Lakh (''? 95 Lakh for the year ended 31 March 2016) as a result of the changes in fair value of equity investments measured at FVTOCI. The impact of change in equity price on profit or loss is not significant
15 Credit risk management
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding receivables and the credit worthiness of its counter parties are periodically monitored and taken up on case to case basis. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets. There is no material expected credit loss based on the past experience. However, the Company assesses the impairment of trade receivable on case to case basis and has accordingly created loss allowance on trade receivables.
The Company has issued financial guarantee to its wholly owned subsidiary, Parry Sugars Refinery India Private Limited (PSRIPL) of Rs, 36,000 lakh (March 31, 2016: Rs, 1,34,950 lakh). Based on the financial performance of PSRIPL, the Company does not expect the guarantee liability to devolve on the Company.
The credit risk on cash and bank balances is limited because the counter parties are banks with high credit ratings assigned by international credit rating agencies.
16 Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The table below provides details regarding the contractual maturities of financial liabilities including estimated interest payments as at 31 March 2017: j. ¦ , ..
17 Financing facilities
The Company has access to financing facilities of which Rs, 61,848 Lakh (as at 31 March 2016: Rs, 87,820 Lakh; as at 1 April 2015: Rs, 53,598 Lakh) were unused at the end of the reporting period. The Company expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets.
50.8 Fair value measurements
Some of the Companyâs financial assets and financial liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation techniques and inputs used):
*positive value denotes financial asset and negative value denotes financial liability Notes:
1. There were no transfers between Level 1 and 2 in the period.
2. The Level 1 financial instruments are measured using quotes in active market
3. The following table shows the valuation technique and key input used for Level 2:
NOTE 7
SHARE BASED PAYMENTS
18 Employee share option plan of the Company
19 Details of the employee share option plans of the Company
The Company has share option scheme for senior employees of the Company. As approved by the shareholders, ESOP schemes are being administered by the Nomination and Remuneration committee of the Board of Directors.
Each employee share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The following share-based payment arrangement were in existence during the current and prior years
NOTE 9
Related Party Disclosure for the year ended March 31, 2017
20. Subsidiary Companies/ Entities
01. Coromandel International Ltd
02. Parry Chemicals Ltd
03. CFL Mauritius Limited
04. Coromandel Brasil Limitada - LLP,Brazil
05. Liberty Pesticides and Fertilisers Limited
06. Dare Investments Ltd
07. Alimtec S.A
08. Sabero Europe BV ,Netherlands
09. Sabero Australia Pty.Ltd
10. Sabero Organics America SA,Brazil
11. Sabero Argentina SA
12. Coromandel Agronegoious De Mexico S.A C.V.
13. Parry America Inc.,
14. Parrys Investments Limited
15. Parrys Sugar Limited
16. Parry Infrastructure Company Private Limited
17. US Nutraceuticals LLC
18. Parry Agrochem Exports Limited
19. La Belle Botanics LLC
20. Parry Sugar Refinery India Private Limited
Investing Party Group
1. Murugappa Holdings Limited (Investing Party)
2. Parry Enterprises India Limited
3. Parry Agro Industries Limited
4. Parry Group Staff Provident Fund
5. Parry Group Gratuity Fund
6. EID Parry Executive Staff Pension & Assurance Scheme
52.2 Key Management Personnel (KMP)
1. Mr. V Ramesh, Managing Director
2. Mr. Suresh S, Deputy Managing Director(With effect from 1st July, 2016)
Note : Related Party Relationships are as identified by the management and relied upon by the auditors.
21 The Tamilnadu Government declared State Advisory Price (SAP) for the sugar year 2013-14, 2014-15 and 2015-16. The Company has challenged the right of State Government to declare the SAP in the Honourable High Court of Madras. The matter is subjudice.
22 Future cash outflows in respect of the above referred matters are determinable only on receipt of judgments / decisions pending at various forums / authorities
23 The Income Tax Department/Commercial Tax Department/Central Excise and Service Tax Authority has filed appeal against the favorable order passed by lower forum in favor of the Company in appropriate appellate forum to the extent of Rs, 1,954 lakh. It is expected that there will not be any outflow of economic resources embodying economic benefits. Hence, no provision is considered necessary against the same.
24 NOTES TO THE RECONCILIATIONS
a. Amalgamation of Parry Phytoremedies Private Limited
Parry Phytoremedies Private Limited, a wholly owned subsidiary of the Company was amalgamated with the Company with the appointed date of April 01, 2014, the effect of which was given in the previous GAAP in financial year 2015-16. This amalgamation would get covered as part of the common control transactions as provided in Ind AS 103 - Business Combinations. Ind AS 103 requires that the amalgamation should be accounted as if it was there on the earliest period reported being April 01, 2015. The effect of this change is an decrease in total equity as at April 01, 2015 of Rs, 1,322 lakh and but does not affect profit before tax and total profit for the year ended March 31, 2016.
b. Amalgamation of Parrys Sugar Industries Limited
Parrys Sugar Industries Limited, a subsidiary of the Company was amalgamated with the Company with the appointed date of April 01, 2016. This amalgamation would get covered as part of the common control transactions as provided in Ind AS 103 - Business Combinations. Ind AS 103 requires that the amalgamation should be accounted as if it was there on the earliest period reported being April 01, 2015. The effect of this change is an decrease in total equity as at April 01, 2015 of Rs, 5,710 lakh and March 31, 2016 of Rs, 8,333 lakh and decrease in profit before tax and total profit of Rs, 2,613 lakh for the year ended March 31, 2016.
c. Proposed Dividend
Under previous GAAP dividend on equity shares recommended by the board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under Ind AS, such dividends are recognized when declared by the members in a general meeting. The effect of this change is an increase in total equity as at April 01, 2015 of Rs, 1,758 lakh, but does not affect profit before tax and total profit of Financial year 2015-16.
d. Actuarial gains and losses
Under previous GAAP actuarial gains and loss were recognized in profit or loss. Under Ind AS, the actuarial gains and losses form part of re-measurement of the net defined benefit liability/asset is recognized in other comprehensive income. Consequently, the tax effect of the same has also been recognized in the other comprehensive income under Ind AS instead of profit or loss. The actuarial loss for the year ended March 31, 2016 were Rs, 32 lakh and the tax effect thereon Rs, 10 lakh. This change does not affect total equity, but there is a increase in profit before tax of Rs, 32 lakh, and in total profit of Rs, 22 lakh for the year ended March 31, 2016.
e. Long term investments as FVTOCI
Under previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, these financial assets have been classified as FVTOCI. On the date of transition to Ind AS, these financial assets have been measured at their fair value which is higher than the cost as per previous GAAP resulting in an increase in carrying amount by Rs, 9,412 lakh as at March 31, 2016 and Rs, 9,464 lakh as at April 01, 2015. The corresponding deferred taxes amounting to Rs, 1,906 Lakh have also been recognized as at March 31, 2016 and April 01, 2015. These changes do not affect profit before tax or total profit for the year ended March 31, 2016 because the investments have been classified as FVTOCI.
f. Share based payments in Fair value
Under previous GAAP the cost of equity settled employee share-based payments was recognized using the intrinsic value method. This did not result in recognising any expense in profit or loss in respect of these share-based payments because the fair value of the shares on the grant date equaled the exercise price. Under Ind AS, the cost of equity-settled employee share-based payments is recognized based on the fair value of the options as on the grant date. The change does not affect total equity, but there is a decrease in profit before tax as well as total profit of Rs, 1 lakh.
g. Other comprehensive income
Under previous GAAP there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains or losses are required to be presented in other comprehensive income.
h. Upfront fee in Borrowings
Under Ind AS, Borrowings under amortised cost are to be accounted under effective interest rate method under Ind AS 109. Accordingly, the processing fee and other upfront fees paid for obtaining loans should be considered for effective interest calculation and not to be charged to Profit and loss account. The consequence tax effect has also been accounted. Accordingly, unamortised portion of the upfront fee of Rs, 38 lakh has been reduced from the Borrowings for March 31, 2016. This net effect of this change is increase in total equity by Rs, 25 lakh as March 31,2016 net of deferred tax of Rs, 13 lakh.
i. Deferred Taxes
Under previous GAAP deferred taxes were to be accounted on timing differences arising between the accounting profit and tax profit. However, such method has been replaced with balance sheet approach in Ind AS, wherein deferred taxes are to be accounted for the differences arising between the accounting balance sheet and tax balance sheet. Accordingly, deferred taxes has been accounted for such temporary differences.
25 Approval of financial statements
The financial statements were approved for issue by the Board of Directors on May 18, 2017.
Mar 31, 2014
Corporate information
E.I.D. Parry is a significant player in Sugar with interests in
promising areas of Bio Pesticides and Nutraceuticals. The company also
has a significant presence in Farm Inputs business through its
subsidiary, Coromandel International Limited.
EID Parry together with its subsidiaries has nine sugar factories
having a capacity to crush 37,550 Tonnes of Cane per day, generate 153
MW of power and four distilleries having a capacity of 230 KLPD. In the
Bio Pesticides business, the Company offers a unique neem extract,
Azadirachtin, having a good demand in the developed countries'' bio
pesticide markets. In the Nutraceuticals business, it holds a strong
position in the growing wellness segment mainly catering to the world
markets with its organic products.
1.1 The above equity share capital is net off 62,69,402 Equity Shares
of Rs. 1 each, bought back by the company during the year 2008-09.
1.2 Under the Employee Stock Option Plan  ESOP 2007, options not
exceeding 89,24,850 have been reserved to be issued to the eligible
employees, with each option conferring a right upon the employee to
apply for one equity share. The options granted under the Scheme would
vest not less than one year and not more than five years from the date
of grant of the options. The options granted to the employees would be
capable of being exercised within a period of three years from the date
of vesting.
Total options outstanding as at March 31, 2014 - 3,48,096 (March 2013-
6,40,342) equity shares of Rs. 1 each. Refer Note No. 43 for other
details about the scheme.
1.3 Terms attached to Equity shares
The Company has only one class of Equity share having a par value of Rs.
1 per share. Each holder of equity share is entitled to one vote per
share. The dividend when proposed by the Board of Directors is subject
to the 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.
2.1 During the year, 19,132 equity shares (2013: 2,65,810 equity
shares) of Rs. 1/- each were issued to the employees as exercise of
employees stock option for an aggregate premium of Rs. 17 lakh (2013: Rs.
188 lakh)
2.2 Deduction during the year represents Rs. 16 Lakh (2013 - Rs. 14 Lakh)
transferred to Statement of Profit and Loss.
3.1 1000 - 10.25% Secured Redeemable Non-convertible Debentures of Rs.10
Lakh each aggregating to Rs.10,000 Lakh are secured by a pari passu first
charge by way of a registered mortgage deed on the Company''s immovable
properties/fixed assets both present and future situated at Pugalur and
Nellikuppam. Debentures are redeemable in full at par on 6th January
2017.
3.2 2000 - 8.97% Secured Redeemable Non-convertible Debentures of Rs.10
Lakh each aggregating to Rs.20,000 Lakh are secured by a pari passu first
charge by way of a registered mortgage deed on the Company''s immovable
properties/fixed assets both present and future situated at Pugalur.
Debentures are redeemable in full at par on 3rd May 2016.
3.3 1,000 - 9.25% Secured Redeemable Non-convertible Debentures of Rs.10
Lakh each aggregating to Rs.10,000 Lakh to be secured by a pari passu
first charge by way of a registered mortgage deed on the Company''s
specific immovable properties. Debentures are redeemable in full at par
on 18th March 2016.
3.4 600 - 9.15% Secured Redeemable Non-convertible Debentures of Rs.10
Lakh each aggregating to Rs.6,000 Lakh are secured by a pari passu first
charge by way of a registered mortgage deed on the Company''s immovable
properties situated at Pugalur. Debentures are redeemable in full at
par on 23rd October 2015.
3.5 600 - 10.40% Secured Redeemable Non-convertible Debentures of Rs.10
Lakh each aggregating to Rs.6,000 Lakh are secured by a pari passu first
charge by way of a registered mortgage deed on the Company''s immovable
properties/fixed assets both present and future situated at
Pettavaithalai and Pugalur and further secured by a pari passu first
charge on the immovable properties situated at Nellikuppam, Pugalur,
Pudukottai and Thyagavalli. Debentures are redeemable in full at par on
4th January 2015.
3.6 400 - 10.25% Secured Redeemable Non-convertible Debentures of Rs.10
Lakh each aggregating to Rs.4,000 Lakh are secured by a pari passu first
charge by way of a registered mortgage deed on the Company''s immovable
properties/fixed assets both present and future situated at
Pettavaithalai and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai and
Thyagavalli. Debentures are redeemable in full at par on 12th July
2014.
3.7 400 - 9.40% Secured Redeemable Non-convertible Debentures of Rs.10
Lakh each aggregating to Rs.4,000 Lakh are secured by a pari passu first
charge by way of a registered mortgage deed on the Company''s immovable
properties/fixed assets both present and future situated at
Pettavaithalai and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai and
Thyagavalli. The Debentures have been redeemed at full on the due date
i.e 25th January, 2014.
3.8.1 The Rupee term loans from State Bank of India amounting to Rs. 10
Lakh are secured by a pari passu first charge by way of hypothecation
of all the movable plant and machinery and other movable assets both
present and future situated at Nellikuppam, Pugalur, Pettavaithalai,
Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu
first charge on the immovable properties situated at these places
except Ariyur and a second charge on current assets.
3.8.2 The Rupee term loans from State Bank of India amounting to Rs.
1,195 Lakh are secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur,
Pettavaithalai, Pudukottai, Thyagavalli and Ariyur and further secured
by a pari passu first charge on the immovable properties situated at
these places except Ariyur and a second charge on current assets.
3.8.3 The External Commercial Borrowings (ECB) Loan from HSBC Bank
(Mauritius) Ltd., Mauritius amounting to Rs. 2,197 Lakh (Current
outstanding) secured by a pari passu first charge on the immovable
properties situated at Nellikuppam, Pugalur, Pudukottai, and
Thyagavalli and to be further secured by a pari passu first charge by
way of hypothecation of all the movable plant and machinery and other
movable assets both present and future situated at Nellikuppam,
Pugalur, Pettavaithalai, Pudukottai, Thyagavalli and Ariyur.
3.8.4.1 Rupee term loans from Axis Bank Limited are secured by pari
passu first charge on fixed assets of Sankili and Haliyal plants.
3.8.4.2 Rupee term loans from ICICI Bank Limited were secured by pari
passu first charge on fixed assets of Sankili and Haliyal Plants.
3.8.4.3 Rupee term loans from State Bank of India are secured by pari
passu first charge on fixed assets of Sankili and Haliyal plants.
3.8.4.4 The Financial Assistance loan from State Bank of India
amounting to Rs. 10,000 Lakh is secured by a pari passu first charge on
fixed assets (both present and future) of the Company and second charge
on the Company''s current assets . As per terms of this loan, interest
@12% per annum will be directly paid by the Government to the Bank.
3.8.4.5 Term Loans extended by State Bank of India & State Bank of
Mysore are primarily secured by pari passu first charge on the Plant &
Machinery of the company and pari passu first charge by way of
equitable mortgage of Land and Factory buildings of the Bagalkot Plant
and collaterally secured by pari passu charge on the fixed assets of
the Bagalkot Plant.
3.9.1The loans are secured by way of a Bank Guarantee from State Bank
of India. It carries interest rate of 4% and repayable over 7 to 10
years.
3.9.2The loans are secured by way of pari passu first charge on fixed
assets of Haliyal and Sankili respectively. It carries interest rate of
4% and repayable over 7 to 14 years.
3.9.3The loans are secured by way of Bank Guartantee. It carries
interest rate of 6.75% and repayable over 6 to 7 years.
3.10 The Interest free loan is repayable after 11 years.
3.11There is no default in repayment of the loans and interest thereon.
4.1 Working Capital facilities from State Bank of India of Rs. 38,887
lakh are secured by hypothecation of sugar and other stocks, stores,
book debts and liquid assets and further secured by a second charge
over the immovable properties of the company (other than Pugalur unit)
and a third charge on the movable and immovable properties of the
Pugalur sugar unit.
4.2 Working Capital facility from State Bank of Mysore of Rs. 4 lakh is
secured by way of first charge on current assets of the company and
collaterally secured by pari passu charge on the fixed assets of the
Bagalkot sugar unit.
4.3. Packing credit facility is covered by letter of credit or
confirmed and irrevocable order for the export of goods / services.
4.4. Maximum amount outstanding at any time during the year was Rs.70,000
lakh (2013: Rs.50,000 lakh)
5.1 There are no dues to enterprises as defined under Micro, Small and
Medium Enterprises Development Act, 2006, as at March 31, 2014 which is
on the basis of such parties having been identified by the management
and relied upon by the auditors.
6.1 These amounts represent warrants issued to the Shareholders which
remained unpresented as on March 31, 2014.
6.2 There are no amounts due to be credited to Investor Education and
Protection Fund as on March 31, 2014.
6.3 Other Miscellaneous Liabilities includes liability towards Capital
goods, Collections payable to bank etc.,
7.A Till last year the company has been charging depreciation on
certain plant and machineries at rates higher than those specified in
Schedule XIV of the Companies Act, 1956. During the year the Company
carried out technical assessment of the useful lives of these assets
and based on such assessment, the depreciation rates have been brought
down to those as specified in Schedule XIV of the Companies Act, 1956.
Consequent to the said revision in depreciation rate, the depreciation
charge for the year is lower by Rs. 2,917 lakh.
8.1. During the previous year Coromandel International Ltd, a
subsidiary company, has issued 17,71,55,580 Numbers of 9% Redeemable
Bonus Debentures of Rs. 15 each aggregating to Rs. 26,574 Lakh to the
company. This has been recognised as dividend income and disclosed as
an exceptional item in the previous year. These Debentures have been
fully redeemed during the year.
8.2. During the year, Company has invested in 11,00,000 fully paid
Redeemable Cumulative Preference shares of Rs. 100/ - each of Silkroad
Sugar Private Limited, aggregating to Rs. 1,100 Lakh.
8.3. During the year, Company has converted loans to Parrys Sugar
Industries Limited amounting to Rs. 2,500 lakh into 25,00,000 fully paid
Redeemable Cumulative Preference shares of Rs. 100 each and further
invested in 5,00,000 fully paid Redeemable Cumulative Preference shares
of Rs. 100 each of Parrys Sugar Industries Limited aggregating to Rs. 500
Lakh.
8.4. During the year, Company has converted loans to Parry
Phytoremedies Private Limited amounting to Rs. 394 lakh into 3,94,000
fully paid Equity shares of Rs. 100 each and further invested in
13,06,000 fully paid Equity shares of Rs. 100/- each of Parry
Phytoremedies Private Limited aggregating to Rs. 1,306 Lakh.
8.5 Fifteen Shares in Kulittalai Cane Farms Private Limited and One
hundred and twenty five shares in Hawker Siddley Group Limited are in
the process of being transferred in the name of the Company.
9.1 Of the above, the balances that meet the definition of Cash and
cash equivalents as per AS 3 Cash Flow Statements is Rs. 3,919 Lakh (2013
- Rs. 1,144 Lakh)
9.2 Balances with banks include deposits amounting to Rs. 108 Lakh (2013
- Rs. 67 Lakh) which have an original maturity of more than 12 months.
10. Other monies for which the Company is contingently liable
Rs. in Lakh
2013-14 2012-13
(a) Letters of Credit and Bank Guarantees
established for Purchases of Raw Materials,
Spares and 15,128 9,638
Capital Goods
(b) Letter of comfort given to ICICI Bank
in connection with the rupee
term loan granted by them - 3,263
to Parrys Sugar Industries Limited, a
subsidiary company.
(c) Disputed Income Tax demands which are
under various stages of appeal (out of
which Rs.1,578 2,056 2,232
lakh (2013 - Rs.1,578 lakh) have
been paid under protest).
(d) Disputed Sales Tax , Excise Duty ,
Service Tax and Customs Duty
demands (out of which Rs. 253 6,338 5,978
lakh (2013 - Rs. 157 lakh) have
been deposited under protest).
(e) Other claims against the Company not
acknowledged as debts - 173
(f) Cane price (Refer note 28.1) 5,948 -
(g) Certain Industrial Disputes are pending
before Tribunal / High
Courts. The liability of the Company in respect
of these disputes depends upon the final
outcome of such cases and the quantum of which
is not currently ascertainable.
11.1 The Sugar Cane Control Board formed by the Government of Karnataka
under the Karnataka Sugar Cane (Regulation of Purchase and Supply) Act
, 2013, had declared a cane procurement price of Rs.2500/MT for the sugar
season 13-14. This has been challenged by South India Sugar Mills
Association - Karnataka (SISMA-K) before the Hon''ble High Court of
Karnataka and the matter is subjudice.
12. (b) As on March 31, 2014, the Company has foreign currency
borrowings of USD 3.67 million (PY USD 5 Million). The Company has
marked to market the foreign currency borrowings and the exchange
difference arising thereon have been recognised in the Statement of
Profit and Loss.
13. DERIVATIVE TRANSACTIONS
The Company uses forward exchange contracts, interest rate swap,
currency swap and currency options to hedge its exposure in foreign
currency. The information on derivative instruments is as follows:
(a) Derivative Instruments outstanding as at March 31, 2014
(b) All the foreign exchange forward contracts are designated as cash
flow hedges
(c) Foreign exchange currency exposures not covered by derivative
instruments as at March 31, 2014 - Nil (March 2013 - Nil)
14. Amalgamation of Sadashiva Sugars Limited with the Company.
i . Pursuant to the scheme of amalgamation of Sadashiva Sugars Limited-
a wholly owned subsidiary ("Transferor Company") with the Company, as
sanctioned by the Honourable High Court of Karnataka vide their order
dated April 4, 2014 , the assets and liabilities of the Transferor
Company were transferred to and vested with the Company with effect
from the appointed date, April 1, 2013. The effective date of
amalgamation is May 8, 2014, on which date all the relevant
requirements under the Companies Act., 1956 have been complied with.
ii. The Transferor Company is engaged in the business of manufacture
and sale of Sugar and generation and sale of electricity.
iii. The amalgamation has been accounted for under the ''Pooling of
interest'' method as prescribed by Accounting Standard 14 "Accounting
for Amalgamations" notified under the Companies (Accounting Standards)
Rules,2006 (as amended). Accordingly the assets and liabilities of the
transferor company as at April 1, 2013, have been taken over at their
book values.
iv. Consequent to the scheme of amalgamation, the authorized equity
share capital of the Company stands increased from 51,50,00,000 equity
shares of Rs.1/- each, aggregating to Rs. 5,150 Lakh to 1,62,50,00,000
equity shares of Rs. 1/- each aggregating to Rs. 16,250 Lakh.
15. EMPLOYEE BENEFIT PLANS
A. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and Employee
State Insurance Scheme contributions which are defined contribution
plans, for qualifying employees. Under the Schemes, the Company is
required to contribute a specified percentage of the payroll costs to
fund the benefits. The Company recognised Rs. 375 Lakh (Year ended March
31, 2013 - Rs. 321 Lakh) for Provident Fund contributions, Rs. 339 Lakh
(Year ended March 31, 2013 - Rs. 308 Lakh) for Superannuation Fund
contributions and Rs. 2 Lakh (Year ended March 31, 2013 - Rs. 2 Lakh) for
Employee State Insurance Scheme contributions in the Statement of
Profit and Loss. The contributions payable to these plans by the
Company are at rates specified in the rules of the schemes.
B. Defined benefit plans :
Gratuity
The following table sets forth the status of the Gratuity Plan of the
Company and the amount recognized in the Balance Sheet and Statement of
Profit and Loss. The Company provides the gratuity benefit through
annual contributions to a fund managed by the Life Insurance
Corporation of India (LIC).
The Company has invested the plan assets with the insurer managed
funds. The insurance company has invested the plan assets in Government
Securities, Debt Funds, Equity shares, Mutual Funds, Money Market
Instruments and Time Deposits. The expected rate of return on plan asset
is based on expectation of the average long term rate of return
expected on investments of the fund during the estimated term of the
obligation. Expected contribution to the fund during the year ending
March 31, 2015 is Rs.50 lakh (2013: Nil).
C. Note on Provident Fund:
With respect to the Provident Fund Trust administered by the company,
the company shall make good deficiency, if any, in the interest rate
declared by Trust over statutory limit. Having regard to the assets of
the Fund and the return on the investments, the Company does not expect
any deficiency in the foreseeable future.
16. EMPLOYEE STOCK OPTION PLAN Â ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on July 26, 2007, the Company has established an ''Employee Stock Option
Scheme 2007'' (''ESOP 2007'' or ''the Scheme'') to be administered by the
Compensation and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 89,24,850 have been reserved
to be issued to the eligible employees, with each option conferring a
right upon the employee to apply for one equity share. The options
granted under the Scheme would vest not less than one year and not more
than five years from the date of grant of the options. The options
granted to the employees would be capable of being exercised within a
period of three years from the date of vesting.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Compensation and Nomination Committee resolution approving the grant.
d) Pursuant to the above mentioned scheme, on the recommendation of the
Compensation and Nomination Committee the Company has, upto March 31,
2014, granted 40,34,000 options vesting over a period of four years
commencing from the respective dates of grant. The exercise price being
equal to the closing market price prevailing on the date prior to the
date of grant, there is no deferred compensation cost to be amortised
in this regard. The company has not granted any stock options during
the year 2013-14.
17. RELATED PARTY DISCLOSURE FOR THE YEAR ENDED MARCH 31, 2014 A
Subsidiary Companies/ Entities
1. Coromandel International Limited
2. Parry Chemicals Limited
3. CFL Mauritius Limited
4. Coromandel Brasil Limitada  Partnership.
5. Liberty Phosphate Limited (Upto March 31, 2013)
6. Liberty Urvarak Limited ((Upto March 31, 2013)
7. Liberty Pesticides and Fertilisers Limited
8. Dare Investments Limited
9. Sabero Organics Gujarat Limited
10. Sabero Europe BV
11. Sabero Australia Pty. Limited
12. Sabero Organics America Ltda
13. Sabero Argentina SA
14. Sabero Organics Mexico S.A De C.V.
15. Parrys Sugar Industries Limited
16. Alagawadi Bireshwar Sugars Private Limited
17. Sadashiva Sugars Limited (Upto March 31, 2013)
18. Parry America Inc.,
19. Parrys Investments Limited
20. Parrys Sugar Limited
21. Parry Infrastructure Company Private Limited
22. Parry Phytoremedies Private Limited
23. US Nutraceuticals LLC
24. Parry Agrochem Exports Limited
25. Valensa Europe AG (Upto May 31, 2013)
26. La Belle Botanics LLC
27. Silkroad Sugar Private Limited (From December 12, 2012)
Joint Venture Company
1. Silkroad Sugar Private Limited (Upto December 11, 2012)
Investing Party
1. Murugappa Holdings Limited
B. Key Management Personnel (KMP)
Mr.Ravindra S Singhvi, Managing Director (upto April 10, 2013)
Mr.V Ramesh, Managing Director, (from January 30, 2014)
Note : Related Party Relationships are as identified by the management
and relied upon by the auditors.
18. As part of the growth strategy for the Nutraceuticals Business,
E.I.D.-Parry (India) Limited., has acquired 100% stake in Alimtec S.A.,
Chile, part of the Bayer Group. The acquisition is by way of purchase
of the stake from Bayer Finance and Portfolio Management S.A., and
Nunhems Chile S.A., subsidiaries of Bayer AG. on 25th April 2014.
19. Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s classification /
disclosure. The financial statements for the current year include the
figures relating to Sadashiva Sugars Limited whose assets and
liabilities have been transferred to and vested with the Company with
effect from April 1, 2013 pursuant to the Scheme of Amalgamation (Refer
Note 31). Hence the current year figures are not comparable with that
of the previous year.
Mar 31, 2013
Corporate information
E.I.D. Parry is a significant player in Sugar with interests in
promising areas of Bio Pesticides and Nutraceuticals. The company also
has a significant presence in Farm Inputs business through its
subsidiary, Coromandel International Limited.
EID Parry together with its subsidiaries has nine sugar factories
having a capacity to crush 34,750 Tonnes of Cane per day, generate 146
MW of power and four distilleries having a capacity of 230 KLPD. In the
Bio Pesticides business, the Company offers a unique neem extract,
Azadirachtin, having a good demand in the developed countries'' bio
pesticide markets. In the Nutraceuticals business, it holds a strong
position in the growing wellness segment mainly catering to the world
markets with its organic products.
1.1 The above equity share capital is net off 62,69,402 Equity Shares
of Rs. 1/- each, bought back by the company during the year 2008-09.
1.2 Under the Employee Stock Option Plan - ESOP 2007, options not
exceeding 89,24,850 have been reserved to be issued to the eligible
employees, with each option conferring a right upon the employee to
apply for one equity share. The options granted under the Scheme would
vest not less than one year and not more than five years from the date
of grant of the options. The options granted to the employees would be
capable of being exercised within a period of three years from the date
of vesting.
Total options outstanding as at March 2013 - 6,40,342 (March 2012-
11,53,654) equity shares ofRs. 1/- each. Refer note 42 for other
details about the scheme.
1.3 Terms attached to Equity shares
The Company has only one class of Equity share having a par value of
Rs. 1/- per share. Each holder of equity share is entitled to one vote
per share. The dividend proposed by the Board of Directors is subject
to the 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.
During the year ended 31st March 2013, the amount of interim dividend
recognized as distributions to equity shareholders is Rs. 6/- per share
(2012- Rs. 4/- per share).
2.1 1,000 - 9.25% Secured Redeemable Non-convertible Debentures ofRs.
10 Lakh each aggregating to Rs. 10,000 Lakh to be secured by a pari
passu first charge by way of a registered mortgage deed on the
Company''s specific immovable properties. Debentures are redeemable in
full at par on 18th March 2016.
2.2 600 - 9.15% Secured Redeemable Non-convertible Debentures ofRs. 10
Lakh each aggregating to Rs. 6,000 Lakh are secured by a pari passu
first charge by way of a registered mortgage deed on the Company''s
immovable properties situated at Pugalur. Debentures are redeemable in
full at par on 23rd October 2015.
2.3 600 - 10.40% Secured Redeemable Non-convertible Debentures ofRs. 10
Lakh each aggregating to Rs. 6,000 Lakh are secured by a pari passu
first charge by way of a registered mortgage deed on the Company''s
immovable properties / fixed assets both present and future situated at
Pettavaithalai and Pugalur and further secured by a pari passu first
charge on the immovable properties situated at Nellikuppam, Pugalur,
Pudukottai and Thyagavalli. Debentures are redeemable in full at par on
3rd January, 2015.
2.4 400 - 10.25% Secured Redeemable Non-Convertible Debentures ofRs. 10
Lakh each aggregating to Rs. 4,000 Lakh are secured by a pari passu
first charge by way of a registered mortgage deed on the Company''s
immovable properties/fixed assets both present and future situated at
Pettavaithalai and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai and
Thyagavalli. Debentures are redeemable in full at par on 11th July,
2014.
2.5 400 - 9.40% Secured Redeemable Non-Convertible Debentures of Rs. 10
Lakh each aggregating to Rs. 4,000 Lakh are secured by a pari passu
first charge by way of a registered mortgage deed on the Company''s
immovable properties/fixed assets both present and future situated at
Pettavaithalai and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai and
Thyagavalli. Debentures are redeemable in full at par on 27th January,
2014.
2.6 500 - 8.65% Secured Redeemable Non-Convertible Debentures of Rs. 10
Lakh each aggregating to Rs. 5,000 Lakh are secured by a pari passu
first charge by way of a registered mortgage deed on the Company''s
immovable properties / fixed assets both present and future situated at
Pugalur and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai and
Thyagavalli. Debentures are redeemed in full at par on 4th September,
2012.
2.7.1 The Rupee term loans from State Bank of India amounting to Rs. 20
Lakh are secured by a pari passu first charge by way of hypothecation
of all the movable plant and machinery and other movable assets both
present and future situated at Nellikuppam, Pugalur, Pettavaithalai,
Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu
first charge on the immovable properties situated at these places
except Ariyur and a second charge on current assets.
2.7.2 The Rupee term loans from State Bank of India amounting to Rs.
2,173 Lakh are secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur,
Pettavaithalai, Pudukottai, Thyagavalli and Ariyur and further secured
by a pari passu first charge on the immovable properties situated at
these places except Ariyur and a second charge on current assets.
2.7.3 The External Commercial Borrowings (ECB) Loan from HSBC Bank
(Mauritius) Ltd., Mauritius amounting to Rs. 2,741 Lakh (US$ 5 Million)
is secured by a pari passu first charge on the immovable properties
situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli and
further secured by a pari passu first charge by way of hypothecation of
all the movable plant and machinery and other movable assets both
present and future situated at Nellikuppam, Pugalur, Pettavaitalai,
Pudukottai, Thyagavalli and Ariyur.
2.7.4.1Rupee term loans from Axis Bank Limited are secured by pari
passu first charge on fixed assets of Sankili and Haliyal plants.
2.7.4.2Rupee term loans from ICICI Bank Limited are secured by pari
passu first charge on fixed assets of Sankili and Haliyal Plants.
2.7.4.3Rupee term loans from State Bank of India are secured by pari
passu first charge on fixed assets of Sankili and Haliyal plants.
2.8.1 The loans are secured by way of a Bank Guarantee from State Bank
of India. It carries interest rate of 4% and repayable over 7 to 14
years.
2.8.2 The loans are secured byway of pari passu first charge on fixed
assets of Haliyal and Sankili respectively. It carries interest rate of
4% and repayable over 7 to 14 years.
2.9 The Interest free loan is repayable after 12 years.
2.10 There is no default in repayment of the loans and interest
thereon.
3.1 Working Capital facilities from State Bank of India are secured by
hypothecation of sugar and other stocks, stores, book debts and liquid
assets and further secured by a second charge over the immovable
properties of the company (other than Pugalur unit).
3.2. Packing credit facility is covered by letter of credit or
confirmed and irrevocable order for the export of goods / services.
4.1 There are no dues to enterprises as defined under Micro, Small and
Medium Enterprises Development Act, 2006, as at March 31, 2013 which is
on the basis of such parties having been identified by the management
and relied upon by the auditors.
5.1 These amounts represent warrants issued to the Shareholders which
remained unpresented as on March 31, 2013.
5.2 There are no amounts due to be credited to Investor Education and
Protection Fund as on March 31, 2013.
5.3 Other Miscellaneous Liabilities includes liability towards Cane
Differential price, capital goods etc.,
6.1. Coromandel International Ltd, a subsidiary company, has issued
17,71,55,580 Numbers of 9% Redeemable Bonus Debentures of Rs. 15/- each
aggregating to Rs. 26,574 Lakh to the company. This has been recognised
as dividend income and disclosed as an exceptional item. The Debentures
are redeemable in 3 equal annual installments of Rs. 8,858 Lakh from
2014-15.
6.2 During the year, a portion of unsecured loans given to Sadashiva
Sugars Ltd has been converted into 5,00,00,000 Equity shares of Rs.
10/- each.
6.3 During the year, the Company has increased its stake in Silkroad
Sugar Private limited, from 50% to 99% by buying out the entire stake
of its foreign Joint Venture partner- Cargill Asia Pacific Holdings Pte
Limited for a consideration ofRs. 3,557 Lakh. Consequent to this
acquisition, Silkroad Sugar Private Limited has become a subsidiary of
the Company, with effect from 12th December, 2012.
6.4. During the year, a portion of unsecured loan given to Parrys
Sugar Industries Ltd has been converted into 1,50,00,000 Nos. of 8%
Redeemable Preference Share Capital ofRs. 10/- each.
6.5 15 Shares in Kulittalai Cane Farms Private Limited and 125 shares
in Hawker Siddley Group Limited are in the process of being transferred
in the name of the Company.
6.6 Refer note 1.10 for valuation of investments.
7.1 Of the above, the balances that meet the definition of Cash and
cash equivalents as per AS 3 Cash Flow Statements is Rs. 1,146 Lakh
(2012 - Rs. 2,810 Lakh)
7.2 Balances with banks include deposits amounting to Rs. 67 Lakh
(2012 - Rs. 15 Lakh) which have an original maturity of more than 12
months.
8.1 Other borrowing costs include interest and finance charges
relating to working capital loan, commercial papers, commitment
charges, loan processing charges, loan facilitation charges, discounts
/premiums on borrowings and other ancillary costs.
9.1 Total Excise Duty on Sales for the year has been disclosed as
reduction from the turnover. Excise duty related to the difference
between the closing stock and opening stock amounting to Rs. 1,688 Lakh
(2012 - Rs. 250 Lakh ) has been included in Rates and Taxes.
NOTE 10 (B)
As on March 31, 2013, the Company has foreign currency borrowings of
US$ 5 million (2012 - US$ 4 Million). The Company has marked to market
the foreign currency borrowings and the exchange difference arising
thereon have been recognised in the Statement of Profit and Loss.
NOTE 11
Derivative transactions
The Company uses forward exchange contracts, interest rate swap,
currency swap and currency options to hedge its exposure in foreign
currency.The information on derivative instruments is as follows:
NOTE 12
SCHEME OF ARRANGEMENT
Pursuant to the Scheme of Arrangement (Demerger), herein after referred
to as "the Scheme", between subsidiary company Parrys Sugar Industries
Limited (Demerged Company), and the Company, as sanctioned by the
Hon''ble High Court of Judicature at Madras, vide their order dated
February 18,2013, the entire assets and liabilities and duties and
obligations of manufacturing facilities at Haliyal and Sankili
(Demerged Undertaking) pertaining to the Demerged Company , was
transferred to and vested in the Company with effect from April 1,
,2012 (Appointed Date). The scheme became effective on March 18, 2013
and accordingly has been given effect to in these financial statements.
12.1) The Company has issued 18,38,578 equity shares of Rs. 1/- each
aggregating to Rs. 18.38 Lakh to the shareholders of the demerged
company other than the company, on March 28, 2013, in the ratio of five
equity shares ofRs. 1/- each credited as fully paid up, for every
nineteen equity shares ofRs. 10/-each held in the Demerged Company.
12.2) The cost of the investments held in the Parrys Sugar Industries
Ltd as appearing in the Company''s books has been reduced in the
proportion of the Net Book value of the assets of the Demerged
Undertaking bears to the Net worth of the Demerged Company immediately
before the appointed date. The said reduction in cost of investments
amounted to Rs. 6,806 Lakh.
12.3) (a) The entire 10,00,00,000-8% Redeemable Cumulative Preference
Shares ofRs. 10/- each held by the Company in the Demerged Company has
been cancelled.
(b) The 1,05,05,460 8% Redeemable Cumulative Preference Shares ofRs.
11/- each held by the Company in the Demerged Company has been
cancelled. The reduction in cost of investments on account of this
cancellation isRs. 1,156 Lakh.
12.4) The excess of liabilities over book value of assets after making
adjustments for 2 to 4 above amounting to Rs. 12,542 Lakh has been
debited to Goodwill account. Such goodwill to the extent of Rs. 1,348
lakh has been adjusted against Capital Reserve Account and the balance
amount ofRs. 11,194 Lakh has been adjusted against the General Reserve.
12.5) The results for the year ended March 31, 2013 also include the
results of Haliyal and Sankili units of Demerged Company.
NOTE 13
EMPLOYEE BENEFIT PLANS
A. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and Employee
State Insurance Scheme contributions which are defined contribution
plans, for qualifying employees. Linder the Schemes, the Company is
required to contribute a specified percentage of the payroll costs to
fund the benefits. The Company recognised Rs. 321 lakh (Year ended
March 31, 2012 -Rs. 277 Lakh) for Provident Fund contributions, Rs. 308
Lakh (Year ended March 31, 2012- Rs. 271 Lakh) for Superannuation Fund
contributions and Rs. 2 Lakh (Year ended March 31, 2012 - Rs. 1 Lakh)
for Employee State Insurance Scheme contributions in the Statement of
Profit and Loss. The contributions payable to these plans by the
Company are at rates specified in the rules of the schemes.
B. Defined benefit plans :
Gratuity -
The following table sets forth the status of the Gratuity Plan of the
Company and the amount recognized in the Balance Sheet and Statement of
Profit and Loss.
14. Employee Stock Option Plan - ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on July 26, 2007, the Company has established an ''Employee Stock Option
Scheme 2007'' (''ESOP 2007'' or ''the Scheme'') to be administered by the
Compensation and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 89,24,850 have been reserved
to be issued to the eligible employees, with each option conferring a
right upon the employee to apply for one equity share. The options
granted under the Scheme would vest not less than one year and not more
than five years from the date of grant of the options. The options
granted to the employees would be capable of being exercised within a
period of three years from the date of vesting.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Compensation and Nomination Committee resolution approving the grant.
d) Pursuant to the above mentioned scheme, on the recommendation of the
Compensation and Nomination Committee the Company has, upto 31st March
2013, granted 40,34,000 options vesting over a period of four years
commencing from the respective dates of grant. The exercise price being
equal to the closing market price prevailing on the date prior to the
date of grant, there is no deferred compensation cost to be amortised
in this regard. The company has not granted any stock options during
the year 2012-13.
15. Related Party Disclosure for the year ended March 31, 2013
15.1. Subsidiary Company/ Entities
1. Coromandel International Ltd
2. Parry Chemicals Ltd
3. CFL Mauritius Limited
4. Coromandel Brasil Limitada - Partnership.
5. Liberty Phosphate Ltd
6. Liberty Urvarak Limited
7. Liberty Pesticides and Fertilisers Limited
8. Dare Investments Ltd
9. Sabero Organics Gujarat Limited
10. Sabero Europe BV
11. Sabero Australia Pty.Ltd
12. Sabero Organics America Ltda
13. Sabero Argentina SA
14. Parrys Sugar Industries Ltd
15. Alagawadi Bireshwar Sugars Private Limited
16. Sadashiva Sugars Ltd
17. Parry America Inc.,
18. Parrys Investments Limited
19. Parrys Sugar Limited
20. Parry Infrastructure Company Private Limited
21. Parry Phytoremedies Private Limited
22. US Nutraceuticals LLC
23. Parry Agrochem Exports Limited
24. Valensa Europe AG
25. La Belle Botanies LLC
26. Silkroad Sugar Private Limited (From December 12, 2012)
Joint Venture Company
1. Silkroad Sugar Private Limited (Upto December 11, 2012)
Associate Company (Investing Party)
1. Murugappa Holdings Limited
15.2 Key Management Personnel (KMP)
Mr. Ravindra S Singhvi, Managing Director
Note : Related Party Relationships are as identified by the management
and relied upon by the auditors.
Transactions with Parrys Sugar Industries Limited represents those with
Ramdurg unit only, (pursuant to a scheme of arrangement (demerger)-
(Refer note 30), Sankili and Haliyal units of Parrys Sugar Industries
Limited have merged with the Company.
15.3.1 During the year Rs. 5,000 Lakh has been converted into Equity
shares out of the loans given to Sadashiva Sugars Limited.
15.3.2 During the year Rs. 1,500 Lakh has been converted into
Preference shares out of the loans given to Parrys Sugar Industries
Limited.
16. Mr. Ravindra S Singhvi, Managing Director resigned from the
Company on April 10, 2013 and Mr. P. Gopalakrishnan has been appointed
as the Manager by the Board of Directors, subject to the approval of
the Shareholders.
17. The financial statements for the current year include the figures
relating to Haliyal & Sankili units of Parrys Sugar Industries Limited
whose assets and liabilities have been transferred to and vested with
the Company with effect from April 1, 2012 pursuant to a scheme of
arrangement (demerger)- (Refer note 30). Hence the current year figures
are not comparable with that of the previous year.
18. Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
Mar 31, 2012
Corporate information
E.I.D. Parry is a significant player in Sugar with interests in
promising areas of Bio Pesticides and Nutraceuticals. The company also
has a significant presence in Farm Inputs business through its
subsidiary, Coromandel International Limited.
EID Parry together with its subsidiaries has nine sugar factories
having a capacity to crush 34,750 Tonnes of Cane per day, generate 146
MW of power and four distilleries having a capacity of 230 KLPD. In the
Bio Pesticides business, the Company offers a unique neem extract,
Azadirachtin, having a good demand in the developed countries' bio
pesticide markets. In the Nutraceuticals business, it holds a strong
position in the growing wellness segment mainly catering to the world
markets with its organic products.
1.1 The above equity share capital is net off 6,269,402 Equity Shares
of Re.1 each, bought back by the company during the year 2008-09.
1.2 Under the Employee Stock Option Plan - ESOP 2007, options not
exceeding 8,924,850 have been reserved to be issued to the eligible
employees, with each option conferring a right upon the employee to
apply for one equity share. The options granted under the Scheme would
vest not less than one year and not more than five years from the date
of grant of the options. The options granted to the employees would be
capable of being exercised within a period of three years from the date
of vesting.
Total options outstanding as at March 2012 - 1,153,654 (March 2011-
1,733,120) equity shares of Re.1 each. Refer Note No. 41 for other
details about the scheme.
1.3 Terms attached to Equity shares
The Company has only one class of equity share having a par value of
Re.1 per share. Each holder of equity share is entitled to one vote per
share. The dividend when proposed by the Board of Directors is subject
to the 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.
During the year ended 31st March 2012, the amount of dividend
recognized as distributions to equity shareholders is Rs. 4 per share
(2011- Rs. 2 per share).
Note
2.1 During the year 464,276 equity shares of Re.1 each were issued to
the employees on exercise of Employees Stock Option for an aggregate
premium of Rs. 360 Lakhs (2011 : Rs. 365 Lakhs)
2.2 Debenture Redemption Reserve account has been created for Rs.1,583
Lakhs (2011 - Rs. 750 Lakhs) by transfer from statement of profit and
loss for Non-convertible Debentures of Rs. 19,000 Lakhs (2011 - 9,000
Lakhs).
2.3 Deduction during the year represents Rs. 14 Lakhs (2011 - Rs. 14
Lakhs) transferred to Statement of profit and loss.
3.1 600 - 10.40% Secured Redeemable Non-convertible Debentures of Rs.10
Lakhs each aggregating to Rs.6,000 Lakhs are secured by a pari passu
first charge by way of a registered mortgage deed on the Company's
immovable properties/fixed assets both present and future situated at
Pettavaithalai and Pugalur and further secured by a pari passu first
charge on the immovable properties situated at Nellikuppam, Pugalur,
Pudukottai, and Thyagavalli. Debentures are redeemable in full at par
on 4th January 2015.
3.2 400 - 10.25% Secured Redeemable Non-convertible Debentures of Rs.10
Lakhs each aggregating to Rs.4,000 Lakhs are secured by a pari passu
first charge by way of a registered mortgage deed on the Company's
immovable properties/fixed assets both present and future situated at
Pettavaithalai and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and
Thyagavalli. Debentures are redeemable in full at par on 12th July
2014.
3.3 400 - 9.40% Secured Redeemable Non-convertible Debentures of Rs.10
Lakhs each aggregating to Rs.4,000 Lakhs are secured by a pari passu
first charge by way of a registered mortgage deed on the Company's
immovable properties/fixed assets both present and future situated at
Pettavaithalai and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and
Thyagavalli. Debentures are redeemable in full at par on 27th January
2014.
3.4 500 - 8.65% Secured Redeemable Non-convertible Debentures of Rs.10
Lakhs each aggregating to Rs.5,000 Lakhs are secured by a pari passu
first charge by way of a registered mortgage deed on the Company's
immovable properties/ fixed assets both present and future situated at
Pugalur and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and
Thyagavalli. Debentures are redeemable in full at par on 4th September
2012.
3.5.1 The Rupee term loan from HDFC Bank Limited amounting to Rs. 13
Lakhs is secured by a pari passu first charge by way of hypothecation
of all the movable plant and machinery and other movable assets both
present and future situated at Pugalur and Pudukottai and further
secured by a pari passu first charge on the immovable properties both
present and future situated at Pugalur and Pudukottai.
3.5.2 The Rupee term loans from State Bank of India amounting to Rs.
1,200 Lakhs are secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur,
Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured
by a pari passu first charge on the immovable properties situated at
these places except Ariyur and a second charge on current assets.
3.5.3 The Rupee term loan from Canara Bank amounting to Rs. 1,250 Lakhs
is secured by a pari passu first charge by way of hypothecation of all
the movable plant and machinery and other movable assets both present
and future situated at Nellikuppam, Pugalur, Pettavaittalai,
Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu
first charge on the immovable properties situated at these places
except Ariyur.
3.5.4 The Rupee term loans from State Bank of India amounting to Rs.
3,151 Lakhs are secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur,
Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured
by a pari passu first charge on the immovable properties situated at
these places except Ariyur and a second charge on current assets.
3.5.5 The Rupee term loan from IndusInd Bank Limited amounting to Rs.
5,000 Lakhs is secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur,
Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured
by a pari passu first charge on the immovable properties situated at
these places except Ariyur.
3.5.6 The External Commercial Borrowings (ECB) Loan from HSBC Bank
(Mauritius) Ltd. Mauritius amounting to Rs. 1,989 Lakhs (USD 4 Million)
is secured by a pari passu first charge on the immovable properties
situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli and to be
further secured by a pari passu first charge by way of hypothecation of
all the movable plant and machinery and other movable assets both
present and future situated at Nellikuppam, Pugalur, Pettavaitalai,
Pudukottai, Thyagavalli and Ariyur. The company has entered into
currency swap arrangement for hedging principal and interest
payments.These arrangements have been recognized and the amount of
borrowings has been stated in the books in Rupee values as per the said
arrangement.
3.6 Loan from Sugar Development Fund (Government of India) for
modernisation/expansion/ cogeneration amounting to Rs. 8,775 Lakhs is
secured by way of a Bank Guarantee from State Bank of India. It carries
interest rate of 4% and repayable over 7 to 14 years.
3.7 The Interest free loan is repayable after 13 years.
3.8 There is no default in repayment of the loans and interest thereon.
4.1 Working Capital facilities from State Bank of India are secured by
hypothecation of sugar and other stocks, stores, book debts and liquid
assets and further secured by a second charge over the immovable
properties of the company (other than Pugalur unit) and a third charge
on the movable and immovable properties of the Pugalur sugar unit.
4.2. Packing credit facility on the basis of letter of credit or
confirmed and irrevocable order for the export of goods / services.
5.1 There are no dues to enterprises as defined under Micro, Small and
Medium Enterprises Development Act, 2006, as at March 31, 2012 which is
on the basis of such parties having been identified by the management.
6.1. Amortization of Leasehold land for the year is Rs.0.08 Lakhs
(2011 - 0.08 Lakhs).
6.2 Includes cost of Rs.31 Lakhs ( 2011 - Rs.31 Lakhs) for which title
deeds are yet to be received from the Registrar.
6.3 Includes Building on Leasehold land : Cost: Rs. 884.41 Lakhs (2011
- Rs. 884.41 Lakhs) and Accumulated Depreciation : Rs.229.27 Lakhs
(2011 - Rs. 214.54 Lakhs).
6.4 Additions for the year 2012 includes Rs. 14.87 Lakhs (2011 - Rs.
28 Lakhs) of Fixed Assets additions made in the Approved In-house R & D
Centres.
7.1 1 Shares in Kulittalai Cane Farms Private Limited and 125 shares
in Hawker Siddley Group Limited are in the process of being transferred
in the name of the Company.
7.2 The company has acquired additional stake of 42.52% in US
Nutraceuticals LLC, for a consideration of Rs. 2,230 Lakhs during
October 2011. The company has thereby obtained 100% voting rights in
that company.
7.3 Refer note 1.10 for valuation of investments.
7.4 The Joint Venture company Silkroad Sugar Private Limited had set
up a sugar refinery and a power plant (project) in a Special Economic
Zone at Kakinada, Andhra Pradesh. The Joint Venture Company commenced
commercial production from October 1, 2010.The project envisaged that
the gas for operations will be available in adequate quantities for its
operations and would give good returns on capital employed. The
operations were commenced with the partial availability of gas with an
expectation that there will be an increased availability. However due
to inadequate supply of gas, the operations had to be discontinued from
2nd November 2011. In order to meet minimum fixed expense and to
service working capital loans, the Joint Venture partner Cargill Asia
Pacific Holdings Pte Limited and the company have made further
investments aggregating to Rs.22,500 Lakhs in equity shares of Joint
Venture Company during the year . Considering the uncertainty in
availability of gas as a fuel, coal is being considered as an
alternative fuel. The Joint Venture company has initiated appropriate
steps for procurement / installation of coal fired boiler and the
operations are expected to be re-commenced by the end of 2013.
-Further the Joint Venture Company has submitted proposals to its
lenders for restructuring of the loan facilities which is under active
consideration of respective lenders.
In view of the Joint Venture Company's efforts to revive its operation,
the erosion in Net Worth of the company which is at 60% as at March 31,
2012 is considered by the management not other than of temporary in
nature and accordingly no provision is considered necessary for the
diminution in the value of investment.
7.5 The company has increased its stake in Sadashiva Sugars Limited
(SSL), subsidiary company from 76% to 100% by acquiring 1,44,66,600
equity shares of Rs. 10 each for Rs. 1,834 Lakhs during September 2011.
7.6 The Board of Directors approved a Scheme of Arrangement (Demerger)
pursuant to which some of the undertakings of Parrys Sugar Industries
Limited (PSIL), a Subsidiary of E.I.D.-Parry (India) Limited, will be
merged with the company effective 1st April 2012. This is subject to
various statutory and regulatory approvals.
8.1 Includes Interest on loan receivable from related parties : Short
Term Rs. 1,977 Lakhs (2011 - Rs. 551 Lakhs)
8.1 Mode of valuation of Inventories - Refer Note No 1.3
8.2 Refer Note 35 for details of work-in-process, finished goods and
stock-in-trade.
9.1 The above amount includes due from related parties - Rs.2,038
Lakhs (2011 - Rs.1,350 Lakhs)
9.2 The above amount includes Insurance claim receivable : Rs. 472
Lakhs ( 2011 - NIL)
10.1 Of the above, the balances that meet the definition of Cash and
cash equivalents as per AS 3 Cash Flow Statements is Rs. 2,810 Lakhs
(2011 - Rs. 310 Lakhs)
11.1 Balances with banks include deposits amounting to Rs. 15 Lakhs
(2011 - 2,118 Lakhs) which have an original maturity of more than 12
months.
12.1 The above raw material consumption includes Rates and Taxes of Rs.
2,851 Lakhs (2011 - Rs. 1,760 Lakhs).
12.2 Includes liability relating to earlier years Rs. 826 lakhs (2011 -
Nil)
13.1 Other borrowing costs include interest and finance charges
relating to working capital loan, commercial papers, commitment
charges, loan processing charges, loan facilitation charges, discounts
/premiums on borrowings and other ancillary costs.
14.1 Total Excise Duty on Sales for the year has been disclosed as
reduction from the turnover. Excise duty related to the difference
between the closing stock and opening stock has been included in other
expenses.
(iii) Derivative transactions
The Company uses forward exchange contracts, interest rate swap,
currency swap and currency options to hedge its exposure in foreign
currency. The information on derivative instruments is as follows:
(b) All the foreign exchange forward contracts are designated as cash
flow hedges.
(c) Foreign exchange currency exposures not covered by derivative
instruments as at March 31, 2012 - Nil (March 2011 - Nil)
In the absence of detailed information regarding Plan assets which is
funded with Life Insurance Corporation of India, the composition of
each major category of plan assets, the percentage or amount for each
category to the fair value of plan assets has not been disclosed. The
details of experience adjustments arising on account of plan assets and
liabilities as required by paragraph 120(n)(ii) of AS 15 (Revised) on
"Employee Benefits" are not readily available in the valuation report
and hence, are not furnished.
Note on Provident Fund
With respect to the Provident Fund Trust administered by the company,
the company shall make good deficiency, if any, in the interest rate
declared by Trust over statutory limit. Having regard to the assets of
the Fund and the return on the investments, the Company does not expect
any deficiency in the foreseeable future.
15. Employee Stock Option Plan - ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on July 26, 2007, the Company has established an 'Employee Stock Option
Scheme 2007' ('ESOP 2007' or 'the Scheme') to be administered by the
Compensation and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 8,924,850 have been reserved
to be issued to the eligible employees, with each option conferring a
right upon the employee to apply for one equity share. The options
granted under the Scheme would vest not less than one year and not more
than five years from the date of grant of the options. The options
granted to the employees would be capable of being exercised within a
period of three years from the date of vesting.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Compensation and Nomination Committee resolution approving the grant.
d) Pursuant to the above mentioned scheme, on the recommendation of the
Compensation and Nomination Committee, the Company has, up to 31st March
2012, granted 4,034,000 options vesting over a period of four years
commencing from the respective dates of grant. The exercise price being
equal to the closing market price prevailing on the date prior to the
date of grant, there is no deferred compensation cost to be amortized
in this regard. The company has granted 285,900 stock options during
the year 2011-12.
Inter segment Transfer Pricing:
Inter Segment prices are normally negotiated amongst the segments with
reference to cost, market prices and business risks, within an overall
optimisation objective for the enterprise.
16. Related Party Disclosure for the year ended 31st March 2012
16.1. Subsidiary Companies/ Entities
1. Coromandel International Ltd.,
2. Parry Chemicals Ltd.,
3. CFL Mauritius Limited
4. Coromandel Brasil Limitada - Partnership.
5. Sabero Organics Gujarat Limited
6. Sabero Europe BV
7. Sabero Australia Pty.Ltd.,
8. Sabero Organics America SA
9. Sabero Argentina SA
10. Parrys Sugar Industries Ltd.,
11. Alagwadi Bireshwar Sugars Private Limited
12. Sadashiva Sugars Ltd.,
13. Parry America Inc.,
14. Parrys Investments Limited
15. Parrys Sugar Limited
16. Parry Infrastructure Company Private Limited
17. Parry Phytoremedies Private Limited
18. US Nutraceuticals LLC.,
19. Parry Agrochem Exports Limited
20. Valensa Europe AG
21. La Belle Botanics LLC.,
Joint Venture Company
1. Silkroad Sugar Private Limited
Associate Company (Investing Party)
1. Murugappa Holdings Limited (Previously known as Parry Agro
Industries Limited)
16.2 Key Management Personnel (KMP)
Mr. Ravindra S Singhvi, Managing Director
Note : Related Party Relationships are as identified by the management
and relied upon by the auditors.
16.2.1 - During the year Rs.10,000 Lakhs has been converted into
Preference shares out of the loans given to Parrys Sugar Industries
Limited
16.2.2 - During the year, dividend paid to Murugappa Holdings Limited
(Investing Party) amounts to Rs. 2,349.41 Lakhs (2011 - Rs. 1,174.70 Lakhs)
17. The Revised Schedule VI has become effective from 1st April, 2011
for the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year's figures have been regrouped/reclassified
wherever necessary to correspond with the current year's classification
/ disclo- sure.
Mar 31, 2011
1. SECURED LOANS
i) (a) Loan from Sugar Development Fund (Government of India) for
modernisation/ expansion/ co-generation amounting to Rs. 9,608 Lakhs is
secured by way of a Bank Guarantee from State Bank of India.
i) (b) Working Capital facilities from State Bank of India and
guarantee given by it in respect of the Sugar Development Fund Loan
amounting to Rs. 35 Lakhs from Government of India are secured by
hypothecation of sugar and other stocks, stores, book debts and liquid
assets and further secured by a second charge over the immovable
properties of the company (other than Pugalur unit) and a third charge
on the movable and immovable properties of the Pugalur sugar unit.
ii) (a) The Rupee term loan from HDFC Bank Limited amounting to Rs. 37
Lakhs is secured by a pari passu first charge by way of hypothecation
of all the movable plant and machinery and other movable assets both
present and future situated at Pugalur and Pudukottai and further
secured by a pari passu first charge on the immovable properties both
present and future situated at Pugalur and Pudukottai.
(ii) (b) The Rupee term loans from State Bank of India amounting to Rs.
2,400 Lakhs are
secured by a pari passu first charge by way of hypothecation of all the
movable plant and machinery and other movable assets both present and
future situated at Nellikuppam, Pugalur, Pettavaittalai, Pudukottai,
Thyagavalli and Ariyur and further secured by a pari passu first charge
on the immovable properties situated at these places except Ariyur and
a second charge on current assets.
(ii) (c) The Rupee term loan from State Bank of India amounting to Rs.
2,250 Lakhs is secured by a second charge on the residual value of the
Companys fixed assets by way of hypothecation of all the movable plant
and machinery and other movable assets both present and future situated
at Nellikuppam, Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and
further secured by a second charge on the immovable properties situated
at these places except Ariyur and by a third charge on Pugalur fixed
assets.
(ii) (d) The Rupee term loan from Canara Bank amounting to Rs. 2,500
Lakhs is secured by a pari passu first charge by way of hypothecation
of all the movable plant and machinery and other movable assets both
present and future situated at Nellikuppam, Pugalur, Pettavaittalai,
Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu
first charge on the immovable properties situated at these places
except Ariyur.
(ii) (e) The Rupee term loans from State Bank of India amounting to Rs.
4,129 Lakhs are secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur,
Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured
by a pari passu first charge on the immovable properties situated at
these places except Ariyur and a second charge on current assets.
(ii) (f) The Rupee term loan from IndusInd Bank Limited amounting to
Rs. 5,000 Lakhs is secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated
at Nellikuppam, Pugalur, Pettavaittalai, Pudukottai, Thyagavalli and
Ariyur and to be further secured by a pari passu first charge on the
immovable properties situated at these places.
(iii) 500 - 8.65% Secured Redeemable Non- convertible Debentures
aggregating to Rs. 5,000 Lakhs are secured by a pari passu first charge
by way of a registered mortgage deed on the Companys immovable
properties/ fixed assets both present and future situated at Pugalur
and further secured by a pari passu first charge on the immovable
properties situated at Nellikuppam, Pugalur, Pudukottai, and
Thyagavalli. Debentures are redeemable in full at par, in 2013.
(iv) 400 - 9.40% Secured Redeemable Non- convertible Debentures
aggregating to Rs. 4,000 Lakhs are secured/to be secured by a pari
passu first charge by way of a registered mortgage deed on the
Companys immovable properties/fixed assets both present and future
situated at Pettavaithalai and to be further secured by a pari passu
first charge on the immovable properties situated at Nellikuppam,
Pugalur, Pudukottai and Thyagavalli. Debentures are redeemable in full
at par, in 2014.
2 (a) The company has entered into a Share Purchase agreement with GMR
Holdings Private Limited for acquisition of shares upto 65% in GMR
Industries Limited (currently known as Parrys Sugar Industries
Limited), Karnataka.
Accordingly, the company has made an open offer to the Shareholders of
Parrys Sugar Industries Limited under SEBI (Substantial Acquistion of
Shares and Takeovers) Regulations, 1997 and acquired 1,29,75,110 equity
shares of Rs. 10/ each representing 65% of the Paid-up Share Capital of
Parrys Sugar Industries Limited for Rs. 8475 Lakhs. Consequently,
Parrys Sugar Industries Limited (PSIL) became a subsidiary of the
company effective from 27th August, 2010.
The company has also acquired 1,28,31,880, 8% Non-cumulative Redeemable
Preference Shares of Rs. 11 each of GMR Industries Limited (currently
known as Parrys Sugar Industries Limited) for Rs. 1,412 Lakhs.
(b) Coromandel Bathware Limited, a subsidiary company, has been
dissolved on 29th January, 2011 under Section 560 of the Companies Act
under Easy Exit Scheme, 2011. The provision for diminution of
investments made in the earlier year has been fully written off during
the year.
2010-11 2009-10
Rs. Lakhs Rs. Lakhs
3. Other monies for which the Company is
contingently liable:
(a) Letters of Credit and Bank Guarantees
established for Purchases of 5741 28674
Raw Materials, Spares and Capital Goods
(b) Income Tax demands contested for which
no Provision has been made 3404 3326
(c) Claims against the Company for Sales Tax,
Excise Duty and others 6073 1378
including Industrial Disputes not acknowledged
as Debt and not provided for.
(d) Certain Industrial Disputes are pending before
Tribunal / High Courts. The liability of the
Company in respect of these disputes depends
upon the final outcome of such cases and the
quantum of which is not currently ascertainable.
(e) The Statutory Minimum Price of sugar cane for
the sugar year 826 826
2002-03 notified on December 12, 2002 at Rs.
645/MT was increased to Rs. 695/MT on January
9, 2003. Since the increase was arbitrary the
same was legally challenged by the South Indian
Sugar Mills Association (of which the company is
a member) and the matter is pending before the
Honble Supreme Court of India. Based on legal
advice, pending disposal of cases, no provision
has been considered in the Accounts.
(f) The company had an opening export obligation of
22,641 MT arising out of raw sugar imported against
Advance licences in earlier years. The company has
fulfilled the export obligation of 22,641 MT during
the year 2010-11. There is no balance export
obligations as on March 31, 2011.
4. There are no dues to enterprises as defined under Micro, Small and
Medium Enterprises Development Act, 2006, which are outstanding for
more than 45 days as at March 31, 2011 which is on the basis of such
parties having been identified by the management.
5. Provision others includes amount in respect of contractual
obligations relating to certain business divested by the company.
6. Particulars
(iii) Derivative transactions
(b) All the foreign exchange forward contracts are designated as cash
flow hedges.
(c) Foreign exchange currency exposures not covered by derivative
instruments as at March 31, 2011 - Nil
7. (a) The following table sets forth the status of the Gratuity Plan
of the Company and the amount recognised in the Balance Sheet and
Profit and Loss Account.
In the absence of detailed information regarding Plan assets which is
funded with Life Insurance Corporation of India, the composition of
each major category of plan assets, the percentage or amount for each
category to the fair value of plan assets has not been disclosed. The
details of experience adjustments arising on account of plan assets and
liabilities as required by paragraph 120(n)(ii) of AS 15 (Revised) on
ÃEmployee Benefitsà are not readily available in the valuation report
and hence, are not furnished.
Note on Provident Fund:
With respect to the Provident Fund Trust administered by the company,
the company shall make good deficiency, if any, in the interest rate
declared by Trust over statutory limit. Having regard to the assets of
the Fund and the return on the investments, the Company does not expect
any deficiency in the foreseeable future.
8. (a) Total Excise Duty on Sales for the year has been disclosed as
reduction from the turnover. Excise duty related to the difference
between the closing stock and opening stock has been included in
Schedule 16 ÃOther CostsÃ.
9. Employee stock option Plan à ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on July 26, 2007, the Company has established an Employee Stock Option
Scheme 2007 (ESOP 2007 or the Scheme) to be administered by the
Compensation and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 89,24,850 (consequent to
Sub-division of equity shares with effect from 24th December, 2010)
(Prior to Sub-division - 44,62,425) have been reserved to be issued to
the eligible employees, with each option conferring a right upon the
employee to apply for one equity share. The options granted under the
Scheme would vest not less than one year and not more than five years
from the date of grant of the options. The options granted to the
employees would be capable of being exercised within a period of three
years from the date of vesting.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Compensation and Nomination Committee resolution approving the grant.
d) Pursuant to the above mentioned scheme, on the recommendation of the
Compensation and Nomination Committee the Company has, upto 31st March
2011, granted 37,48,100 options (face value of Re. 1 each) normally
vesting over a period of four years commencing from the respective
dates of grant. The exercise price being equal to the closing market
price prevailing on the date prior to the date of grant, there is no
deferred compensation cost to be amortised in this regard. The company
has granted 3,66,300 stock options during the year 2010-11.
e) Effective from 24th December 2010, the company has subdivided the
nominal value of equity shares from Rs. 2 per share to Re. 1 per share.
Consequently, the previous years options granted have been restated for
disclosure.
Inter segment Transfer Pricing:
Inter Segment prices are normally negotiated amongst the segments with
reference to cost, market prices and business risks, within an overall
optimisation objective for the enterprise.
10. Earnings Per share:
Effective from 24th December 2010, the company has subdivided the
nominal value of equity shares from Rs. 2 per share to Re.1 per share.
Effect of this has been given in the Earnings Per Share computation.
11. Related Party Disclosure for the year ended 31st march, 2011
11.1.subsidiary company/Entities
1. Coromandel International Ltd.
2. Parry Chemicals Ltd.
3. CFL Mauritius Limited
4. Coromandel Brasil Limitada à Partnership
5. Parrys Sugar Industries Ltd. (Formerly known as GMR Industries
Ltd.)
6. Alagawadi Bireshwar Sugars Private Limited
7. Sadashiva Sugars Ltd.
8. Parry America Inc.,
9. Parrys Investments Limited
10. Parrys Sugar Limited
11. Parry Infrastructure Company Private Limited
12. Parry Phytoremedies Private Limited
13. US Nutraceuticals LLC
14. Parry Agrochem Exports Limited Joint Venture company
1. Silkroad Sugar Private Limited
11.2. Key management Personnel (KMP)
Mr. K. Raghunandan, Managing Director (upto 28th January, 2011)
Mr. Ravindra S. Singhvi, Managing Director (From 29th January, 2011)
Note : Related Party Relationships are as identified by the management
and relied upon by the auditors.
12. Previous years figures have been regrouped/reclassified to conform
to Current years classification.
Mar 31, 2010
1. SECURED LOANS
i) Loan from Sugar Development Fund (Government of India) for
modernisation/ expansion / cogeneration amounting to Rs. 8,374 Lakhs is
secured by way of a Bank Guarantee from State Bank of India.
ii) Working Capital facilities from State Bank of India and guarantee
given by it in respect of the Sugar Development Fund Loan amounting to
Rs. 67 Lakhs from Government of India are secured by hypothecation of
sugar and other stocks, stores, book debts and liquid assets and
further secured by a second charge over the immovable properties of the
company (other than Pugalur unit) and a third charge on the movable and
immovable properties of the Pugalur sugar unit.
iii) The Rupee term loan from HDFC Bank Limited amounting to Rs. 400
Lakhs is secured by a pari passu first charge by way of hypothecation
of all the movable plant and machinery and other movable assets both
present and future situated at Pugalur and Pudukottai and further
secured by a pari passu first charge on the immovable properties both
present and future situated at Pugalur and Pudukottai
iv) The corporate / term loan from State Bank of India amounting to Rs.
10,000 Lakhs is secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur and
Pudukottai and further secured by a pari passu first charge on the
immovable properties situated at Nellikuppam, Pugalur and Pudukottai.
v) The Rupee term loans from State Bank of India amounting to Rs. 3,600
Lakhs are secured by a pari passu first charge by way
of hypothecation of all the movable plant and machinery and other
movable assets both present and future situated at Nellikuppam,
Pugalur, Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further
secured/to be secured by a pari passu first charge on the immovable
properties situated at these places and a second charge on current
assets.
vi) The Rupee term loan from State Bank of India amounting to Rs. 4,950
Lakhs is secured by a second charge on the residual value of the
Companys fixed assets by way of hypothecation of all the movable plant
and machinery and other movable assets both present and future situated
at Nellikuppam, Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and
further secured/ to be secured by a second charge on the immovable
properties situated at these places and by a third charge on Pugalur
fixed assets.
vii) The Rupee term loan from Canara Bank amounting to Rs. 3,750 Lakhs
is secured by a pari passu first charge by way of hypothecation of all
the movable plant and machinery and other movable assets both present
and future situated at Nellikuppam, Pugalur, Pettavaittalai,
Pudukottai,
Thyagavalli and Ariyur and further secured/ to be secured by a pari
passu first charge on the immovable properties situated at these
places.
viii) The Rupee term loans from State Bank of India amounting to Rs.
4,941 Lakhs are secured by a pari passu first charge by way of
hypothecation of all the movable plant and machinery and other movable
assets both present and future situated at Nellikuppam, Pugalur,
Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further
secured/to be secured by a pari passu first charge on the immovable
properties situated at these places and a second charge on current
assets.
ix) 500 - 8.65% Secured Redeemable Non- convertible Debentures
aggregating to Rs.5,000 Lakhs are secured by a pari passu first charge
by way of a registered mortgage deed on the Companys immovable
properties/fixed assets both present and future situated at Pugalur and
further secured by a pari passu first charge on the immovable
properties situated at Nellikuppam, Pugalur, Pudukottai, and
Thyagavalli. Debentures are redeemable in full at par in 2013.
2. Total Excise Duty on Sales for the year has been disclosed as
reduction from the turnover. Excise duty related to the difference
between the closing stock and opening stock has been included in
Schedule 17 "Other Costs". General Manufacturing, Selling and
Administration Expenses included under Other Cost in Schedule 17,
includes Cane Development Expenditure of Rs. 2702 Lakhs (PY : 728
Lakhs).
3. Employee Stock Option Plan à ESOP 2007
a) Pursuant to the decision of the shareholders, at their meeting held
on July 26, 2007, the Company has established an Employee Stock Option
Scheme 2007 (ESOP 2007 or the Scheme) to be administered by the
Compensation and Nomination Committee of the Board of Directors.
b) Under the Scheme, options not exceeding 44,62,425 have been reserved
to be issued to the eligible employees, with each option conferring a
right upon the employee to apply for one equity share. The options
granted under the Scheme would vest not less than one year and not more
than five years from the date of grant of the options. The options granted
to the employees would be capable of being exercised within a period of
three years from the date of vesting.
c) The exercise price of the option is equal to the latest available
closing market price of the shares on the stock exchange where there is
highest trading volume as on the date prior to the date of the
Compensation and Nomination Committee resolution approving the grant.
d) Pursuant to the above mentioned scheme, On the recommendation of the
Compensation and Nomination Committee the Company has, upto 31st March
2009, granted 16,90,900 options vesting over a period of four years
commencing from the respective dates of grant. The exercise price being
equal to the closing market price prevailing on the date prior to the
date of grant, there is no deferred compensation cost to be amortised
in this regard. The company has not granted any options during the year
2009-10.
3. Previous yearÃs figures have been regrouped/reclassified to
conform to Current yearÃs accounts.
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