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Notes to Accounts of Sakuma Exports Ltd.

Mar 31, 2023

a) Terms / rights attached to equity shares

(i) The Company has one class of equity shares having par value of ''1 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting except in case of Interim Dividend.

(ii) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(i) The Company has transferred amount from Statement of profit or loss to capital redemption reserve on redemption of preference shares issued by the company.

(ii) Securities premium is created on the premium on issue of shares. This same will be utilised in accordance with the provisions of the Companies Act 2013.

(iii) Retained earnings represents profits that the Company has earned till March 31, 2023, less any transfers to general reserve, dividends or other distributions paid to shareholders.

Nature of Security

i) The Company has entered into the banking arrangement for credit facilities with multiple banks, i.e. Bank of Maharashtra, Indusind Bank, SVC Co-operative Bank Limited, Deustsche Bank and ICICI Bank.

a) Bank of Maharashtra: The credit facilities comprises of Cash Credit and Packing credit which is secured against Hypothecation of Inventory, Book debts and Current Assets of the company along with the collateral security against Fixed Assets (other than vehicles and Leasehold Land).

Credit Facilities for Bank of Maharashtra is repayable on demand and carries interest of 10.30% p.a. i.e. one year Maximum Cost of Lending Rate (MCLR) of the bank 2.50% BSS 0.5%.

b) Indusind Bank: The credit facilities comprises of Cash Credit and Packing credit which is secured against Hypothecation of Inventory, Books debts and Current Assets of the company in paripassu with other banks along with the collateral security against .Credit Facilities from Indusind Bank is repayable on demand and carries interest of 9.25 p.a. i.e. one year Maximum Cost of Lending Rate (MCLR) of the bank i.e. 8.45% 0.80% .

c) SVC Cooperative Bank Ltd: The credit facilities comprises of Cash Credit and Packing credit which is secured against Hypothecation of Inventory, Books debts and Current Assets of the company in paripassu with other banks along with the collateral security against Fixed Assets (other than vehicles and Leasehold Land) .Credit Facilities from SVC Cooperative Bank Ltd is repayable on demand and carries interest of 11.65 p.a. i.e. (PLR) of the bank i.e. 8.55% 3.10% .

d) Deutsche Bank:- The credit facilities comprises of Cash Credit and Packing credit which is secured against Hypothecation of Inventory, Books debts and Current Assets of the company in paripassu with other banks along with the collateral security against Fixed Assets (other than vehicles and Leasehold Land) .Credit Facilities from Deutsche Bank is repayable on demand and carries interest of MBOR 4.73% per annum.

e) ICICI Bank Ltd: The credit facilities comprises of Overdraft facility against Fixed Deposit. Credit Facilities from ICICI Bank Ltd is repayable on demand and carries interest of 4% p.a..

(ii) Unsecured Short Term Borrowings of the company are repayable on demand and carrying interest rate @ 10% p.a.

‘* Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.

(ii) Trade payables are non-interest bearing and normally settled within 120 days.

i) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

ii) The Company has opted for reduced tax rate as per Section 115BAA of the Income Tax Act, 1961 (introduced by the Taxation Laws (Amended) Ordinance, 2019) for the current financial year. Accordingly the Group has recognised Provision for Income Tax for the year and re-measured its Deferred tax Liability basis at the rate prescribed in the said section.

Note No. 37: Operating Leases

i) The Company’s lease asset primarily consist of leases for land and buildings for offices. Effective April 1, 2019, the Company adopted Ind AS 116 “Leases” and applied the standard to all lease contracts existing on April 1, 2019 using the modified retrospective method. Consequently, the Company recorded the lease liability at the present value of the remaining lease payments discounted at the incremental borrowing rate as on the date of transition and has measured right of use asset at an amount equal to lease liability adjusted for any related prepaid and accrued lease payments previously recognised.

(ii) The following is the summary of practical expedients elected on initial application:

(a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date

(b) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application

(c) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application

(d) Applied the practical expedient by not reassessing whether a contract is, or contains, a lease at the date of initial application. Instead applied the standards only to contracts that were previously identified as leases under Ind AS 17.

(e) Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease

(ii) Following is carrying value of right of use assets recognised on date of transition and the movements thereof during the year ended March 31, 2022

Note 40 Segment Reporting

The company and its Chief Operating Decision Maker (CODM) reviews agro business as the only segment and takes decision based on the demand and supply in agro business. Thus, as per Ind AS 108, the business activities falls within a single primary segment i.e. trading in Agri Products and accordingly segment reporting is not applicable.

(ii) Defined benefit plans

The group offers the following employee benefit schemes to its employees:

Gratuity

The group has a defined benefit gratuity plan which is funded with an Insurance group in the form of qualifying Insurance policy. The group’s defined benefit gratuity plan is a salary plan for employees which requires contributions to be made to a separate administrative fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five years of service gets a gratuity on separation @ 15 days of last drawn salary for each completed year of service rounded to nearest integer. The scheme is funded with an insurance group in the form of qualifying insurance policy.

The Management have appointed PNB MetLife to manage its funds. The management aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

In case of death, while in service, the gratuity is payable irrespective of vesting. The group makes annual contribution to the group gratuity scheme administered by PNB MetLife through its gratuity funds.

(h) The principal assumptions used in determining gratuity and leave encashment for the group’s plan are shown below: Description of Risk Exposures -

Valuations are performed on certain basic set of predetermined assumptions and other regulatory frame work which may vary overtime. Thus, the group is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate risk

The plan exposes the group to the risk of all 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).

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.

Regulatory Risk

Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g Increase in the maximum limit on gratuity of '' 20 lakhs).

The group has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance group carries out a fund valuation based on the latest employee data provided by the group. Any deficit in the assets arising as a result of such valuation is funded by the group.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free. The company has not recorded any impairment of receivables relating to the amounts owned by the related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which related party exists.

The remuneration to the key managerial personnel does not include the provisions made for gratuity as they are determined on an actuarial basis for the Company as a whole.

Managerial remuneration is computed as per the provisions of section 197 of the Companies Act, 2013.

43 Hedging Activities and Derivatives

Derivatives designated as hedging instruments

The Group uses derivative financial instruments such as foreign currency forward contracts to hedge foreign currency risk arising from future transactions in respect of which firm commitments are made or which are highly probable forecast transactions. All these instruments are designated as hedging instruments and the necessary documentation for the same is made as per Ind AS 109.

Cash flow hedges - Foreign currency Risk

Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow hedges of recognized purchase payables, committed future purchases, recognized sales receivables, forecast sales in US dollar. The forecast sales transactions are highly probable.

During the reporting period ended March 31, 2023 and March 31, 2022, there have been no transfers between Level 1 and Level 2 fair value measurements.

The management assessed that fair values of cash and cash equivalents, trade receivables, trade payables less than 1 year, bank overdrafts and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

45 Capital Risk Management

For the purpose of the Company capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2023 and March 31, 2022.

46 Financial Risk Management

Risk Management Framework

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, cash and cash equivalents that derive directly from its operations. The Company also enters into derivative transactions.

The Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors through its risk management committee reviews and agrees policies for managing each of these risks, which are summarised below

The Company’s has exposure to the following risks arising from financial instruments:

(i) Market Risk

(ii) Commodity Price Risk

(iii) Credit Risk

(iv) Liquidity Risk

(v) Excessive risk Concentration (i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2023.

The following assumptions have been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022 including the effect of hedge accounting.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a short term working capital loans which are reviewed on yearly basis. The following table provides a break-up of Company’s fixed and floating rate borrowing:

Note: The above analysis is prepared for floating rate liabilities assuming the amount of the Liability outstanding at the end of the reporting Period was outstanding for the whole year.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years

Derivatives designated as hedging instruments

The Company uses derivative financial instruments such as foreign currency forward contracts to hedge foreign currency risk arising from future transactions in respect of which firm commitments are made or which are highly probable forecast transactions. All these instruments are designated as hedging instruments and the necessary documentation for the same is made as per Ind AS 109.

Cash flow hedges - Foreign currency Risk

Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow hedges of recognized purchase payables, committed future purchases, recognized sales receivables, forecast sales in US dollar. The forecast sales transactions are highly probable.

(ii) Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of oil and other traded commodities. Due to the significantly increased volatility of the prices of the commodities, the Company also entered into various derivative contracts.

The Company’s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

(iii) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. 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.

Trade receivables

Customer credit risk is managed by the management subject to the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing. Generally the company operates on advance against delivery order principle except for merchant trade transactions wherein the sales is executed on credit terms up to six months. Also, Export customers are secured against Letter of Credit, bank guarantees and payments against documents. Credit risk on receivables is also mitigated by securing the same against security deposit, letter of credit and advance payment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

Other financial assets and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval as per the Investment policy. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

(iv) Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. The Company prepares cash flow on a daily basis to monitor liquidity. Any shortfall is funded out of short term loans. Any surplus is invested in liquid mutual funds and short term bank deposits. The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

(v) Excessive risk Concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Group’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Group to manage risk concentrations at both the relationship and industry levels.

Note-47 Other Accompanying Notes

1. Recent Pronouncements:

The Ministry of Corporate Affairs has vide notification dated 31st March 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 which amends certain accounting standards, and are effective 1st April 2023.

Ind AS 1 - Presentation of Financial Statements

This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies. from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023.

Ind AS 12 - Income Taxes

This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after 1st April, 2023.

The Company has evaluated the amendments and there is no significant impact of the above on its standalone financial statement.

2. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Holding Company or its Subsidiary Company incorporated in India to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Holding Company or its Subsidiary Company incorporated in India (Ultimate Beneficiaries). The Holding Company or its Subsidiary Company incorporated in India has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

3. Details of Benami property: No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

4. Transactions with Struck off Companies: No transactions have been carried out during the financial year 2021-22 with Struck off Companies under section 248 of the Companies Act, 2013 by MCA.

5. Compliance with number of layers of companies: The Company has complied with the number of layers prescribed clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.

6. Details of crypto currency or virtual currency: The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

7. Undisclosed income: There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

8. The Figures have been rounded off to the nearest lakhs of Rupees upto two decimal Places.

9. Previous Years Figures have been regrouped / rearranged where ever necessary to make them Comparable with the Current year Figures as per revised Schedule III requirements


Mar 31, 2018

1 Corporate information

Sakuma Exports Limited (“The Company”), a Government of India recognised Star Trading House, is a public limited company domiciled in India and incorporated on August 31, 2005, CIN - L51909MH2005PLC155765. The registered office of the company is located at 301-A, Aurus Chambers, SS Amrutwar Lane, Near Mahindra Tower, Worli, Mumbai - 400013. The shares of the company are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The company is engaged in trading of Agro Commodities and caters to both domestic as well as international markets.

Authorisation of Financial Statements: The financial statements were authorised for issue in accordance with a resolution of the directors on May 28, 2018.

Note:

(i) Leasing Arrangements Operating Lease:

The Company has entered a lease agreement, resulting in a non-cancellable operating lease. There is no restriction placed upon the Company by entering these leases. The lease term is of five years.

Lease rental on the said lease of Rs. 65.36 Lacs (March 31, 2017 ''72.37 Lacs) has been charged to Statement of Profit and Loss. Future minimum rentals payable under non-cancellable operating leases as at March 31, 2018 are, as follows:

Notes:

(i) These debts are secured to the extent of Letter of Credits obtained from the customers.

(ii) Trade receivables are non interest bearing in nature. The company maintains the policy of dispatches against payments except in case of merchant trade transactions, wherein the terms of payment is six months.

(iii) The above Trade Receivables are hypothecated to banks against Cash Credit and Packing Credit facilities. (Refer note no. 17)

Notes:

(i) During the year, the company has made preferential allotment of 49,00,000 shares (face value of Rs. 10 per share) at a premium of Rs. 97 per share as per the special resolution passed by the members at the Extra Ordinary General Meeting dated September 26, 2017.

(ii) Terms/Rights attached to Equity Shares

(iia) The Company has one class of equity shares having par value of ''10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting except in case of Interim Dividend.

(iib) In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iv) As per records of the company, including register of shareholders and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(v) The company has not issued any equity shares as bonus for consideration other than cash and has not bought back any shares during the period of five years immediately preceding March 31, 2018.

(iii) The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting except in case of Interim Dividend and are not recognised as a liability (including dividend distribution tax thereon) in the year in which it is proposed.

Note:

The Company has entered into a consortium comprising of various banks lead by the Corporation Bank. The other members of the consortium comprises of Axis Bank, Union Bank of India and Indian Overseas .

Cash Credit and Packing Credit are secured against Hypothecation of Inventory, Book debts and Current assets of the company alongwith the collateral security against Fixed assets (other than vehicles and Leasehold land), Lien on Term Deposits and pledge of shares of promoters of the company on pari passu basis amongst all the consortium members.

(i) Cash Credit facility for Corporation Bank is repayable on demand and carries interest at Maximum Cost of Lending Rate (MCLR) of the bank 5.50 %p.a. Packing credit Loan is repayable within a maximum period upto 270 days and carries interest rate Maximum Cost of Lending Rate (MCLR) of the bank 0.60% p.a upto the period of Credit.

(ii) Cash Credit for Axis Bank is repayable on demand and carries interest as Axis Bank Base Rate 2% p.a. Packing credit Loan is repayable within period up to 120 days and carries interest rate prevailing on the date of withdrawals.

(iii) Packing Credit facility from Indian Overseas Bank are repayable within period up to 120 days and carries interest rate as per the circular in force on the date of withdrawals.

(iv) Packing Credit from Union Bank of India are repayable depending upon the contract and carries interest rate prevailing on the date of withdrawals. Cash Credit carries interest at Maximum Cost of Lending Rate (MCLR) of the bank 3.40% p.a.

(v) The company has availed packing credit rupee loan against enhanced limit at rate of interest as per the rates prevailing on date of withdrawals for the RBL Bank.

(vi) Unsecured Short Term Borrowings of the company are repayable on demand and carrying interest rate @ 10% p.a.

(i) The above information has been provided as available with the company to the extent such parties could be identified on the basis of the information available with the Company regarding the status of the suppliers under the MSMED Act.

(ii) Trade payables are non-interest bearing and normally settled within 120 days.

Note 2 Segment Reporting

The company and its Chief Operating Decision Maker (CODM) reviews agro business as the only segment and takes decision based on the demand and supply in agro business. Thus, as per IND AS 108, the business activities falls within a single primary segment i.e. trading in Agri Products and accordingly segment reporting is not applicable.

Note 3 Related party Disclosures

The related parties as per the terms of IND AS - 24, “Related Party Disclosures”. Specified under section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2015) are disclosed below -

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free. The company has not recorded any impairment of receivables relating to the amounts owned by the related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which related party exists.

The remuneration to the key management personnel does not include the provisions made for gratuity as they are determined on an actuarial basis for the Company as a whole.

Managerial remuneration is computed as per the provisions of section 197 of the Companies Act, 2013.

Note 4 Post-retirements benefit plan

(i) Defined contribution plans

The Company has recognised and included in Note 26 “Contribution to Provident and other funds” expenses towards the defined contribution plan as under:

(ii) Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

Gratuity

The Company has a defined benefit gratuity plan which is funded with an Insurance Company in the form of qualifying Insurance policy. The Company’s defined benefit gratuity plan is a salary plan for employees which requires contributions to be made to a separate administrative fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five years of service gets a gratuity on separation @ 15 days of last drawn salary for each completed year of service rounded to nearest integer. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The Management have appointed PNB MetLife to manage its funds. The management aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

In case of death, while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the Company gratuity scheme administered by PNB MetLife through its gratuity funds.

The disclosure in respect of the defined Gratuity plan are given below:

(h) The principal assumptions used in determining gratuity and leave encashment for the Company’s plan are shown below: Description of Risk Exposures

Valuations are performed on certain basic set of predetermined assumptions and other regulatory frame work which may vary overtime. Thus, 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 all 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).

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.

Regulatory Risk

Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of Rs. 10 lacs).

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

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance Company carries out a fund valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

The following payments are expected contributions to the defined benefit plan in future years: Expected(Undiscounted) Benefit Payments in Future Years

(Projections are for current members and their currently accumulated benefits)

5 Hedging Activities and Derivatives Derivatives designated as hedging instruments

The Group uses derivative financial instruments such as foreign currency forward contracts to hedge foreign currency risk arising from future transactions in respect of which firm commitments are made or which are highly probable forecast transactions. All these instruments are designated as hedging instruments and the necessary documentation for the same is made as per IND AS 109.

Cash flow hedges - Foreign currency Risk

Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow hedges of recognised purchase payables, committed future purchases, recognized sales receivables, forecast sales in US dollar. The forecast sales transactions are highly probable, and comprise about 25% of the Group’s total expected sales in US dollar. The foreign exchange forward contract balances vary with the level of expected foreign currency sales and purchases and changes in foreign exchange forward rates.

6 Fair Value Measurements

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not valued at fair value if the carrying amount is a reasonable approximation of the fair value.

During the reporting period ended March 31, 2018 and March 31, 2017, there have been no transfers between Level 1 and Level 2 fair value measurements.

The management assessed that fair values of cash and cash equivalents, trade receivables, trade payables less than 1 year, bank overdrafts and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments

7. Financial Risk Management

Risk Management Framework

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, cash and cash equivalents that derive directly from its operations. The Company also enters into derivative transactions.

The Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. The Board of Directors through its risk management committee reviews and agrees policies for managing each of these risks, which are summarised below.

The Company’s has exposure to the following risks arising from financial instruments:

(i) Market Risk

(ii) Commodity Price Risk

(iii) Credit Risk

(iv) Liquidity Risk

(v) Excessive risk Concentration

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017.

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2018.

The following assumptions have been made in calculating the sensitivity analysis:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2018 and March 31, 2017 including the effect of hedge accounting.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a short term working capital loans which are reviewed on yearly basis. The following table provides a break-up of Company’s fixed and floating rate borrowing:

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

Note: The above analysis is prepared for floating rate liabilities assuming the amount of the Liability outstanding at the end of the reporting Period was outstanding for the whole year.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years

Derivatives designated as hedging instruments

The Company uses derivative financial instruments such as foreign currency forward contracts to hedge foreign currency risk arising from future transactions in respect of which firm commitments are made or which are highly probable forecast transactions. All these instruments are designated as hedging instruments and the necessary documentation for the same is made as per IND AS 109.

Cash flow hedges - Foreign currency Risk

Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow hedges of recognized purchase payables, committed future purchases, recognized sales receivables, forecast sales in US dollar. The forecast sales transactions are highly probable, and comprise about 25% of the Company’s total expected sales in US dollar.

The foreign exchange forward contract balances vary with the level of expected foreign currency sales and purchases and changes in foreign exchange forward rates.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

(ii) Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of oil and other traded commodities. Due to the significantly increased volatility of the prices of the commodities, the Company also entered into various derivative contracts.

The Company’s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

(iii) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. 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.

Trade receivables

Customer credit risk is managed by the management subject to the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing. Generally the company operates on advance against delivery order principle except for merchant trade transactions wherein the sales is executed on credit terms up to six months. Also, Export customers are secured against Letter of Credit, bank guarantees and payments against documents. Credit risk on receivables is also mitigated by securing the same against security deposit, letter of credit and advance payment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

Other financial assets and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval as per the Investment policy. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

(iv) Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. The Company prepares cash flow on a daily basis to monitor liquidity. Any shortfall is funded out of short term loans. Any surplus is invested in liquid mutual funds and short term bank deposits. The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

(v) Excessive risk Concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the company’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the company to manage risk concentrations at both the relationship and industry levels.

8. Capital Risk Management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

9. First Time Adoption of IND AS

The Company had prepared its financial statements in accordance with the Accounting Standards (AS) notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) for and including the year ended March 31, 2018. The Company has prepared its first IND AS (Indian Accounting Standards) compliant Financial Statements for the year ended March 31, 2018 with restated comparative figures for the year ended March 31, 2017 in compliance with IND AS. Accordingly, the Opening Balance Sheet, in line with IND AS transitional provisions, has been prepared as at April 1, 2016, the date of Company’s transition to IND AS. The principal adjustments made by the Company in restating its Indian GAAP financial statements for the financial year ending March 31, 2017 and the Balance Sheet as at April 1, 2016 are as mentioned below:

Notes to first time adoption

Note 1: Remeasurements of post employment benefit obligations

Under the previous GAAP, cost relating to post employment benefit obligations including actuarial gain/loss were recognised in Profit & Loss. Under IND AS, actuarial gain/loss on the net defined benefit liability are recognised in other comprehensive income instead of profit & loss.

Note 2: Security deposit

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of lease term) are recorded at transaction price. Under IND AS all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued the security deposits and the difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent.

Note 3: Other Comprehensive Income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per IND AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per IND AS.

Note 4: Statement of cash flows

The transition from Indian GAAP to IND AS has not had a material impact on the statement of cash flows.

Exemptions applied -

IND AS 101 on First Time Adoption of IND AS allows first-time adopters certain exemptions from the retrospective application of certain requirements under IND AS. The Company has applied the following exemptions:

- Deemed Cost

There is no change in the functional currency of the Company and accordingly, it has elected to continue with the carrying values for all of its property, plant and equipment as recognised in its Indian GAAP financial statements as the deemed cost at the transition date. Accumulated depreciation was calculated on that amount as at the date of transition to IND AS on the basis of the current estimate of the useful life of the asset using the depreciation policy adopted by the Company in accordance with Indian GAAP i.e. useful life of assets remains same as per schedule II of the Companies Act, 2013.

The Company has elected to use the previous GAAP carrying values as deemed cost at the transition date for all its intangible assets.

In accordance with the exemption given in IND AS 101, the Company has recorded its investment in subsidiaries at deemed cost as on the transition date to IND AS instead of fair value.

- Leases

Appendix C to IND AS 17 requires the Company to assess whether a contract or arrangement contains a lease. In accordance with IND AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used IND AS 101 exemption and assessed all relevant arrangements for leases based on conditions in place as at the date of transition.

- Hedge Accounting

The company uses derivative financial instruments to hedge its commodity and foreign currency risks. Under Indian GAAP, there is no mandatory standard that deals comprehensively with hedge accounting, which has resulted in the adoption of varying practices. The company has designated various economic hedges and applied economic hedge accounting principles to avoid profit or loss mismatch. All the hedges designated under Indian GAAP are of types which qualify for hedge accounting in accordance with IND AS 109 also. Moreover, the company, before the date of transition to IND AS, has designated a transaction as hedge and also meets all the conditions for hedge accounting in IND AS 109. Consequently, the company continues to apply hedge accounting after the date of transition to IND AS.

INDAS Mandatory Exceptions applied

IND AS 101 specifies mandatory exceptions from retrospective application of certain requirements under IND AS for firsttime adopters. Following exceptions are applicable to the Company:

(i) Use of Estimates

The estimates at April 1, 2016 and March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Impairment of financial assets based on Expected Credit Loss (ECL) model

The estimates used by the Company to present these amounts in accordance with IND AS reflect conditions at April 1, 2016, the date of transition to IND AS and as of March 31, 2017.

(ii) Impairment of financial assets

The Company has applied the exception related impairment of financial assets given in IND AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognised and compared that to the credit risk as at April 1, 2016.

(iii) Derecognition of financial assets and financial liabilities

The Company has elected to apply the derecognition requirements for financial assets and financial liabilities in IND AS 109 prospectively for transactions occurring on or after the transition to IND AS.

(iv) Classification and measurement of financial assets

The Company has classified the financial assets in accordance to IND AS 109 on the basis of the facts and circumstances that exist on the date of transition to IND AS.

10 Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

Amendments to IND AS 115 Revenue from Contracts with Customers

IND AS 115 was issued on March 28, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under IND AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under IND AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after April 01, 2018. On transition, the effect of this changes is not expected to be material for the Company.

Amendments to IND AS 12 Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the changes in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after April 01, 2018. The Company will adopt the new standard on the required effective date. On transition, the effect of this changes is not expected to be material for the Company.

Appendix B to IND AS 21 Foreign Currency Transactions and Advance Consideration

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

(i) The beginning of the reporting period in which the entity first applies the Appendix, or

(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The Appendix is effective for annual periods beginning on or after April 01, 2018. However, since the Company’s current practice is in line with the Interpretation, the Company does not expect any effect on its financial statements.


Mar 31, 2016

Terms/Rights attached to Equity Shares

The Company has one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting except in case of Interim Dividend.

During the year ended 31 March 2016, the amount of per share recognized as distributions to equity shareholders was Rs. 1 per share (31st March 2015 Rs.1 per share).

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note-: As per records of the company, including register of shareholders and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Note:-Tax on Interim Dividend

During the relevant financial year, the company has received dividend from its foreign subsidiary, GKM General Trading LLC, of Rs.1,45,79,476/- on which the company is liable to pay Rs.21,86,921/- as divided tax u/s 115 BBD of the Income Tax Act.

As the company has received dividend from the foreign subsidiary the tax paid or payable on the dividend received from foreign subsidiary is eligible for set-off against liability of dividend distribution tax payable u/s 115-O of the Act, hence forth after netting of balance amount of dividend paid of Rs. 18,46,467/- is liable for dividend distribution tax that amounts to Rs. 3,76,250/- for which separate provision for dividend distribution tax has been made under the head Other Current Liabilities.

Note 1 Short-term borrowings:

i) Cash Credit and Packing Credit from Corporation Bank are secured against Hypothecation of Inventory, Book debts, Current assets, Fixed assets other than vehicles and Leasehold land, Lien on Term Deposits and pledge of shares of promoters of the company. Cash Credit is repayable on demand and carries interest @13.85% p.a . Packing credit Loan is repayable within 90 days and carries interest rate @ 10.75% p.a up to the period of Credit.

ii) Cash Credit and Packing Credit from Axis Bank are secured against charge on the entire current assets, Hypothecation of Fixed assets other than vehicles and Leasehold land, Lien on Term Deposits, personal guarantees of Directors and pledge of shares of promoters of the company. Cash Credit is repayable on demand and carries interest @12.50% p.a . Packing credit Loan is repayable within period up to 120 days and carries interest rate prevailing on the date of withdrawals.

iii) Cash Credit and Packing Credit from Indian Overseas Bank are secured against Hypothecation of Inventory, Book debts, Lien on Term Deposits, personal guarantees of Directors and pledge of shares of promoters of the company. Packing credit Loan is repayable within period up to 120 days and carries interest rate as per the circular in force on the date of withdrawals.

iv) Cash Credit and Packing Credit from Union Bank of India are secured against Hypothecation of Inventory, Book debts, Fixed assets other than vehicles and Leasehold land, Lien on Term Deposits, personal guarantees of Directors and pledge of shares of promoters of the company. Packing credit Loan is repayable depending upon the contract and carries interest rate prevailing on the date of withdrawals.

v) Secured Short Term Borrowings Limit of the company has been increased by Rs.45 Crores during the year. Short Term Borrowings amounting Rs.35 Crore from Rabobank are secured pari passu with existing banker against stocks, receivables, other current assets, collateral property and collateral security as fixed Deposit i.e. 15% of Total Facility Limit. Further Short Term Borrowing of Rs. 10 Crore from RBL Bank Limited are secured paripassu with existing bankers against Current Assets , Stocks, Book Debts and Hypothecation of Fixed assets of the company excluding Vehicles and Windmill landed property Lien on Term Deposits and personal guarantees of Directors . During the year company has availed packing credit rupee loan against enhanced limit at rate of interest as prevailing on date of withdrawals.

vi) Unsecured Short Term Borrowings of the company are repayable on demand and carrier interest rate @ 10% p.a.

2 Details on derivatives instruments and unhedged foreign currency exposures

The following derivative positions are open as at 31 March, 2016. These transactions have been undertaken to act as economic hedges for the Company’s exposures to various risks in foreign exchange markets and may/may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Notes 2.17, 2.18 and 2.19.

(a) Forward exchange contracts which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date for receivables.

(i) Outstanding forward exchange contracts entered into by the Company as on 31 March, 2016

3 The Balance of Sundry Debtors , Sundry Creditors , Loans and Advances have been taken as per books awaiting respective confirmation and reconciliation.

4 The Company has not received any Memorandum (As required to be filled by the Supplier with the notified authority under the Micro Small and Medium Enterprises Development Act 2006) claiming their status as Micro Small and Medium Enterprises. Accordingly the amount paid/ payable together with the interest if any have not been given.

Note 5 Disclosures under Accounting Standards

Employee benefit plans

6 Defined contribution plans

The Company makes Provident Fund contributions to 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. 4,51,726/- (Year ended 31 March, 2015 Rs.4,39,683) for Provident Fund 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.

7 Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

In Compliance with the Accounting Standard 22 “Accounting for Taxes on Income “issued by ICAI which has become mandatory. The Company has reversed Deferred Tax Liability(Net) amounting to Rs.10,14,335/- for the Current year (Previous year reversal of Deferred Tax Liability (Net) amounting to Rs.12,87,703/-) and the same has been transferred to Statement of Profit and Loss.

Note 8 Previous year’s figures

Previous year’s figures have been regrouped /reclassified wherever necessary to correspond with the current year’s classification or disclosure.


Mar 31, 2015

1 Corporate information

Sakuma Exports Limited(Government of India recognised Star Trading House) is a public limited company domiciled in India and incorporated under the provisions of Companies Act 1956. Its shares are listed on Bombay Stock Exchange(BSE) and National Stock Exchnage (NSE). The company is engaged in exports of commodities like Sugar, Rice,Maize.Sesame Seeds. Ground Nuts,Pulses,Oil Meal, Raw Cotton etc. and Import of commodities like Sugar, Coal and Oil .The company caters to both domestic and international markets.

2.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting standards as prescribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guide lines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared on accrual basis under the historical cost convention on the accrual basis of accounting, unless stated otherwise. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for depreciation and amortization as described in the accounting policy on depreciation and amortization.

2.2 Contingent liabilities and commitments (to the extent not provided for)

As at As at Particulars 31 March, 2015 31 March, 2014

(A) Contingent liabilities

(a) Claims against the Company not acknowledged as debt with respect to

(i) Sugar Import Consignment pertaining to year 2009-10 USD 11,23,425 & USD 11,23,425 &

Rs.60,43,987/- and Rs.60,43,987/and

Interest @8% Interest @8%

(ii) Quality issue of Goods Supplied 15,87,450 15,87,450

(iii) Disputed Income tax demands for AY 2009-10 14,60,411 14,60,411

(B) Commitments

(a) Uncalled liability

(i) Share Subscription Money payable for GKM General Trading LLC AED 117,600 AED 117,600

(ii) Share Subscription Money payable for Sakuma Exim DMCC AED 55 AED 55

(b) Other commitments

(i) Outstanding Currency Forward Contracts (Sale USD 27,850,691.02 USD 17,682,508

(ii) Outstanding Currency Forward Contracts (Buy) USD 4,194,000 USD 2,683,000

2.3 Details on derivatives instruments and unhedged foreign currency exposures

The following derivative positions are open as at 31 March, 2015. These transactions have been undertaken to act as economic hedges for the Company's exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Notes 2.8, 2.18 and 2.19.

(a) Forward exchange contracts which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date for receivables.

(i) Outstanding forward exchange contracts entered into by the Company as on 31 March, 2015

2.4 Corporate Social Responsibilty Expenditure:

Company has set apart an amount of Rs17,79,866 to be spent as Corporate Social Responsibilty expenditure, however, as 31st March, 2015 the said amount is unspent.

Note 3 Disclosures under Accounting Standards:

3 Employee benefit plans:

3.1 Defined contribution plans:

The Company makes Provident Fund contributions to 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 Rs4,39,683/- Year ended 31 March, 2014 Rs.3,01,702) for Provident Fund 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.

3.2 Defined benefit plans:

The Company offers the following employee benefit schemes to its employees:

(i) Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

Note 4 Disclosures under Accounting Standards:

Note Particulars

4.1 Related Party transactions Details of related parties:

Description of relationship Names of related parties

Holding Company Sakuma Exports Limited

Subsidiaries Sakuma Exim DMCC (UAE)

GKM General Trading LLC (UAE)

Sakuma Exports Pte Ltd (Singapore)

Sakuma Exports (Ghana) Ltd (Subsidiary of Sakuma Pte Ltd)

Sakuma Exports (Tanzania) Private Ltd (Subsidiary of Sakuma Pte Ltd)

Key Management Personnel (KMP) Mr.Chander Mohan

Mr. Saurabh Malhotra

Relatives of KMP Mrs.Shipra Medirrata

Mrs Kusum Malhotra

Company in which KMP / Relatives of KMP Sakuma Finvest Private Limited can exercise significant influence

GMK System and Logistics Pvt Ltd

Sakuma Infrastructure and Realty Private Limited

C.K.K Exports pvt Ltd


Mar 31, 2014

1.1 Contingent liabilities and commitments (to the extent not provided for)

Particulars As at As at 31 March,2014 31 March,2013

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt with respect to

i) Sugar Import Consignment petaining to year 2009-10 USD 11,23,425 USD 11,23,425 & 60,43,987/- &Rs. 60,43,987/- Interest @8% Interest @8%

ii) Quality issue of Goods Supplied 15,87,450 15,87,450

iii) Disputed Income tax demands for 14,60,411 14,60,411 AY 2009-10

(ii) Commitments

(a) Uncalled liability

i) Share Subscription Money payable for GKM General Trading LLC AED 117600 AED 117600

ii) Share Subscription Money payable for Sakuma Exim DMCC AED 55 AED 55

(b) Other commitments

i) Outstanding Currency Forward USD 176,82,508 USD 58,29,899 Contracts (Sale)

ii) Outstanding Currency Forward USD 26,83,000 - Contracts (Buy)

1.2 Details on derivatives instruments and unhedged foreign currency exposures

The following derivative positions are open as at 31 March, 2014. These transactions have been undertaken to act as economic hedges for the Company''s exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments.

The accounting for these transactions is stated in Notes 2.8, 2.18 and 2.19.

(a) Forward exchange contracts which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of for receivables.

(i) Outstanding forward exchange contracts entered into by the Company as on 31 March, 2013

Note 2 Disclosures under Accounting Standards

2 Employee benefit plans

2.1 Defined contribution plans

The Company makes Provident Fund contributions to 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. 3,01,702/- (Year ended 31 March, 2013 Rs.2,44,243) for Provident Fund 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.

2.2 Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

Note 3 Disclosures under Accounting Standards (contd.)

3.1 Details of related parties:

Description of relationship Names of related parties

Holding Company Sakuma Exports Limited

Subsidiaries Sakuma Exim DMCC (UAE)

GKM General Trading LLC (UAE)

Sakuma Exports Pte Ltd (Singapore)

Sakuma Exports (Ghana) Ltd (Subsidiary of Sakuma Pte Ltd)

Sakuma Exports (Tanzania) Private Ltd (Subsidiary of Sakuma Pte Ltd)

Key Management Personnel (KMP) Mr. Chander Mohan

Mr. Saurabh Malhotra

Relatives of KMP Ms. Shipra Medirrata

Mrs Kusum Malhotra

Company in which KMP / Relatives of KMP Sakuma Finvest Private Limited can exercise significant influence GMK System and Logistics Pvt Ltd

Sakuma Infrastructure and Realty Private Limited C.K.K Exports pvt Ltd

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax (or) The Company has recognised deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management''s estimates of future profits considering the non-cancellable customer orders received by the Company.

Note 4 Previous year''s figures

4.1 Previous year''s figures have been regrouped /reclassified whereever necessary to correspond with the current year''s classification or disclosure.


Mar 31, 2013

1 Corporate information

Sakuma Exports Limited(Government of India recognised Trading House) is a public limited company domciled in India and incorporated under the provisions of Companies Act 1956. Its shares are listed on two stock exchange in India.The company is engaged in exports of commodities like Sugar, Rice,Maize.Sesame Seeds.Ground Nuts,Pulses,Oil Meal, Raw Cotton etc.The company caters to both domestic and international markets.

2.1 Details on derivativgs instruments and unhedged foreign currency exposures

The following derivative positions are open as at 31 March, 2013. These transactions have been undertaken to act as economic hedges for the Company’s exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Notes 2.8, 2.18 and 2.19. (a) Forward exchange contracts which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency resuired or available at the settlement date of for receivables. (i) Outstanding forward exchange contracts entered into by the Company as on 31 March, 2013

Note 3 Disclosures under Accounting Standards

3 Employee benefi t plans

3.1 Defi ned contribution plans

The Company makes Provident Fund contributions to defi ned contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specifi ed percentage of the payroll costs to fund the benefi ts. The Company recognised Rs. 2,44,243/- (year ended 31 March, 2012 Rs. 2,45,676) for Provident Fund contributions in the Statement of Profi t and Loss. The contributions payable to these plans by the Company are at rates specifi ed in the rules of the schemes.

3.2 Defi ned benefi t plans

The Company offers the following employee benefi t schemes to its employees:

i. Gratuity

The following table sets out the funded status of the defi ned benefi t schemes and the amount recognised in the fi nancial statements:

4.1 Segment information

The Company has identifi ed business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily Trading in Commodities and Windmill Operation. As windmill opeartion is not meeting any of the criteria hence forth, we are not providing the primary segment information.

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fi xed assets under Income Tax (or) The Company has recognised deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management’s estimates of future profi ts considering the non-cancellable customer orders received by the Company.

Note 5 Previous year’s fi gures

5.1 Previous year’s fi gures have been reg rouped / reclassifi ed wherever necessar y to cor respond with the cur rent year’s classifi cation / disclosure.


Mar 31, 2012

1 Corporate information

Sakuma Exports Limited(Government of India recognised Trading House) is a public limited company domciled in India and incorporated under the provisions of Companies Act 1956. Its shares are listed on two stock exchange in India.The company is engaged in exports of commodities like Sugar, Rice, Maize, Sesame Seeds,Ground Nuts,Pulses,Oil Meal etc. The company caters to both domestic and international markets.

2.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention for categories of fixed assets. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for those stated below

3.1 contingent liabilities and commitments (to the extent not provided for)

Particulars As at As at 31st March, 2012 31st March, 2011

(i) contingent liabilities

(a) Claims against the Company not acknowledged as debt with respect to

i) Sugar Import Consignment pertaining to year 2009-10 USD 11,23,425 & USD 11,23,425

60,43,987/- and & 60,43,987/- Interest @8% and Interest @8%

ii) Quality issue of Goods Supplied 1,587,450 1,587,450

iii) Stop Payment of Cheque 1,368,260 1,368,260

b) Disputed Income tax Demands for Ay 2002-03, 2003-04, 2009-10 1,985,242 79,192,722

(ii) commitments # Other commitments

i) Share Subscription Money payable for GKM General Trading LLC AED 117600 -

ii) Outstanding Currency Forward Contracts USD 4,39,73,000 USD 37,86,000



3.2 Disclosures required under Section 22 of the Micro, Small and Medium enterprises Development Act, 2006

In the absence of information regarding vendors covered under Micro, Small and Medium Enterprises Development Act, 2006 disclosures relating to amounts unpaid at the year end together with interest paid/payable under this act has not been given

3.3 Details on derivatives instruments and unhedged foreign currency exposures

The following derivative positions are open as at 31 March, 2012. These transactions have been undertaken to act as economic hedges for the Company's exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Notes 2.8, 2.18 and 2.19.

(a) Forward exchange contracts which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of for receivables.

(i) Outstanding forward exchange contracts entered into by the Company as on 31 March, 2012

4 EMPLOYEE Benefit PLANS

4.1 Defined contribution plans

The Company makes Provident Fund contributions to 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. 2,45,676/ — (Year ended 31 March, 2011 Rs. 93,131) for Provident Fund 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.

4.2 Segment information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily Trading in Commodities and Windmill Operation. As windmill opearation is not meeting any of the criteria. Hence worth, we are not providing the primary segment information.

Note: The geographic bifurcation of the Company's revenues and segment assets are as Under:

Note: Figures in bracket relates to the previous year

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax (or) The Company has recognised deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management's estimates of future profits considering the non-cancellable customer orders received by the Company.

5 The Revised Schedule VI has become effective from 1 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 as classification / disclosure.


Mar 31, 2011

1. Redemption of Preference Shares

During the year company has redeemed 10,00,092 5% Cumulative Preference shares of Rs.100 each at par. Accordingly an amount of Rs.10,00,09,200/- has been transferred to Capital Redemption Reserve from Profit and Loss account.

2. Employee Benefits :

The disclosures required under Accounting Standard 15 "Employee Benefits" notifed in the Companies (Accounting Standards) Rules 2006, are given below:

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized and charged to profit and loss account for the year are as under:

Particulars 2010-11 2009-2010

Employers Contribution 93,131 92,407 to Provident Fund

Defined Benefit Plan

Defined Benefit Plan i.e. gratuity is recognized on accrual basis based on the actuarial valuation in accordance with the requirement of Accounting Standard 15 (Revised) – "Employee Benefits".

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee Benefit entitlement and measures each unit separately to build up the final obligation. The particulars under the AS 15 (Revised) are furnished below

3. Related Party Disclosure

Related party disclosure as required by Accounting Standard – 18, "Related Party Disclosure" issued by the Institute of Chartered Accountants of India -are given below:

A. Name and Relationship of the Related Parties:

Name of the related Party Nature of Relations

Key Management Personal

Mr. Chander Mohan Executive Chairman

Mr Saurabh Malhotra Managing Director Others

Mrs. Shipra Medirrata Director & Relative of Key Management Personal

Kusum Malhotra Relative of Key Management Personal

Vanita Malhotra Relative of Key Management Personal

Sakuma Finvest Private Ltd Enterprise over which Directors have significant Infuence

Sakuma Import and Export Private Ltd

Sakuma International Marketing Pvt Ltd

CKK Exports Pvt Ltd.

Note: Related party relationship is as defned by the company and relied upon by the Auditor.

4. Contingent Liabilities

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and are disclosed by way of notes to Financial Statements.

Contingent Liabilities not provided for in respect of:

(Amount in Rupees) Particulars 2010-11 2009-10

Disputed income tax demand for the A.Y 2002-03 pending before Commissioner of Income Tax 2,45,931 2,45,931 for waiver of Interest

Disputed income tax demand for the 2,78,900 2,78,900 A.Y 2003-04 pending before Assessing offcer (ITAT has reverted to AO on statistical ground) (Company has already made the payment of the tax demand)

Disputed income tax demand for the 32,61,735 32,61,735 A.Y 2005-06 pending before Income Tax Appellate Tribunal.(Company has already made Payment of Rs.10,00,000 against the demand)

Disputed income tax demand for the 15,87,450 15,87,450 A.Y 2008-09 pending before Commissioner of 7,54,06,156 Income Tax (Appeal).Dispute due to quality issue of goods supplied which were rejected by overseas buyer

Dispute u/s 138 of the Negotiable 13,68,260 13,68,260 Instruments Act for stopping on account payment.

Claim not acknowledge as debt

During the last year i.e. FY 2009-10 the company paid 10 % advance of USD 2,10,600 equivalent to Rs.96.22 Lacs for import of sugar against Contract . However seller dispatched different quality of sugar, therefor company rejected the consignment. The seller then fled an arbitration petition for breach of contract claiming damages. The Refned Sugar Association, London has passed the arbitration order against the company awarding damages of USD 11,23,425, Rs.60,43,987 and Interest @8% till the payment is made. Company is in process of challenging the award in the High Court. Pending dispute, company has not made any provision for the Claimed Damages.

5. Deferred tax

In view of Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India deferred tax liability is provided on timing difference between taxable income and accounting income. Deferred tax asset is recognized on the basis of reasonable/ virtual certainty of their realization. Calculation of Deferred Tax is as follows:

6. In the opinion of the Board, current assets, loans and advances have a value at least equal to the amounts shown in the balance sheet, if realized in the ordinary course of business.

7. impairment of assets

Management of the company does not anticipate any impairment to assets with specifc reference to Windmill assets considering current market value for similar kind of assets even though there is decline in Revenue from Windmill operation.

8. Details about the Micro, Small & Medium Enterprise:-

In the absence of information regarding vendors covered under the Micro, Small and Medium Enterprises Development Act, 2006 Disclosures relating to amounts unpaid as the year end together with interest paid / payable under this act has not been given.

9. Events Occurring after the Balance Sheet Date:-

To the Best of the Knowledge of the Management, there are no events occurring after the balance sheet date that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the Balance sheet date that requires adjustment of assets or liabilities.

10. No amounts are due for deposits as at the balance sheet date to the investor Education and protection Fund.

11. Previous year figures have been regrouped/ rearranged/ reclassifed wherever necessary, to make them comparable with the of the current year.


Mar 31, 2010

1. Employee Benefits :

The disclosures required under Accounting Standard 15 "Employee Benefts" notified in the Companies (Accounting Standards) Rules 2006, are given below:

Defined Benefit Plan

During the year company has changed its policy for recognising Defined Benefit Plan i.e. gratuity from cash basis to accrual basis based on the actuarial valuation in accordance with the requirement of Accounting Standard 15 (Revised) – "Employee Benefts". Due to this change of policy profit for the year is lower by Rs.2,40,735 and liability is over by Rs.2,40,735

2. Related Party Disclosure

Related party disclosure as required by Accounting Standard – 18, "Related Party Disclosure" issued by the Institute of Chartered Accountants of India -are given below:

Name of the related Party Nature of Relations

Key Management Personal

Mr Saurabh Malhotra Managing Director

Mr. Chander Mohan Chairman - Executive Director

others

Mrs. Shipra Medirrata Director & Relative of Key Management Personal

Kusum Malhotra Relative of Key Management Personal

Vanita Mlhotra Relative of Key Management Personal

Sakuma Finvest Private Ltd Enterprise over which Directors have Significant Influence

Sakuma Import and Export Private Ltd

Sakuma International Marketing Pvt Ltd

Note: Related party relationship is as defined by the company and relied upon by the Auditor.

Figures in parenthesis represents previous year figure

3. Contingent Liabilities

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and are disclosed by way of notes to Financial Statements.

Contingent Liabilities not provided for in respect of:

(Amount in Rupees)

Particulars 2009-10 2008-09

Disputed income tax demand for the A.Y 2002-03 pending before CIT (Appeal). 2,45,931 2,45,931

Disputed income tax demand for the A.Y 2003-04 pending before Assessing 2,78,900 2,78,900

office (ITAT has reverted to AO on statistical ground) (Company has already made the payment of the tax demand) .

Disputed income tax demand for the A.Y 2005-06 pending before CIT (Appeal). 32,61,735 -

Disputed income tax demand for the A.Y 2006-07 pending before CIT (Appeal). 20,055 -

(The demand is after adjusting the refund of Rs.57,014)

Dispute due to quality issue of goods supplied which were rejected by overseas 15,87,450 15,87,450

buyer

Dispute u/s 138 of the Negotiable Instruments Act for stopping on account 13,68,260 13,68,260 payment.



Claim not acknowledge as debt

During the year the company had paid 10 % advance of USD 2,10,600 equivalent to Rs.96.22 Lacs for import of Brazilian White sugar against Contract No.2158 S (58U1528). However as the seller sent Refined Granulated Sugar under the guise of Brazilian White Sugar, the company rejected the consignment. The seller has fled an arbitration petition for breach of contract claiming damages of USD 4,07,180 and Rs.35.17 Lacs plus additional cost to be incurred and on the other hand company is in process of fling a legal suit against the seller. Pending the dispute company has not made any provision for the advance payment of USD 2,10,600 i.e. Rs.96.22 Lacs.

4. In the opinion of the Board, current assets, loans and advances have a value at least equal to the amounts shown in the balance sheet, if realized in the ordinary course of business.

5. Managerial remuneration under section 198, 309 and other applicable provisions of the Companies Act, 1956 read with schedule - XIII of the Companies Act, 1956 paid or payable during the financial year to the Directors are as under:

6. Segment Reporting

Primary Segment

The company is engaged in trading of commodities & Wind Power Generation. Information is given below

The above information does not include information pertaining to sale of power as the sale of power is done only in domestic market.

7. Impairment of Losses

For the Current Year under review as required by the Accounting Standard - 28, Management is of the opinion that no there is no loss on account of impairment of fixed assets

8. Details about the Micro, Small & Medium Enterprise:-

In the absence of information regarding vendors covered under the Micro, Small and Medium Enterprises Development Act, 2006 Disclosures relating to amounts unpaid as the year end together with interest paid / payable under this act has not been given.

9. Events Occurring after the Balance Sheet Date:-

To the Best of the Knowledge of the Management, there are no events occurring after the balance sheet date that provide additional information materially affecting the determination of the amounts relating to the conditions existing at the Balance sheet date that requires adjustment of assets or liabilities.

10. No amounts are due for deposits as at the balance sheet date to the investor Education and protection Fund.

11. Previous year figures have been regrouped/ rearranged/ reclassified wherever necessary, to make them comparable with the figures of the current year.

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