A. GENERAL INFORMATION Ruchi Soya Industries Limited ('the Company") is a Public Limited Company engaged primarily in the business of processing of oil-seeds and refining of crude oil for edible use. The Company also produces oil meal, food products from soya and value added products from downstream and upstream processing. The Company is also engaged in trading in various products and generation of power from wind energy. The Company has manufacturing plants across India and is listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE) . B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES B.1 Basis of Preparation: These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts. These financial statements have been brpared to comply in all material aspects with the Accounting Standards notified under Rule 7 of the Companies (Accounts) Rules, 2014 in respect of section 133 of the Companies Act, 2013 and other recognised accounting practices and policies. B.2 Tangible and Intangible assets Tangible and intangible assets (other than those acquired under Hire Purchase Schemes) are stated at cost of acquisition / revalued amount, less accumulated debrciation and impairments, if any. Revalued assets are stated at their fair value as at the date of revaluation based on report of approved valuer less accumulated debrciation. Cost of fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation after reducing Cenvat credit received/ receivable, if any. With effect from 1st April, 2011, gain/loss on account of fluctuation in exchange rates pertaining to long term foreign currency monetary items, to the extent it is related to acquisition of debrciable assets, is adjusted to the cost of the assets. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realisable value . Any expected loss is recognised immediately in the Statement of Profit and Loss. Fixed assets acquired under Hire Purchase Schemes are valued at cash price less debrciation. In accordance with the requirements of Accounting Standard 16 (AS 16), "Borrowing Costs", borrowing costs attributable to acquisition/construction of a qualifying asset (i.e. an asset requiring substantial period of time to get ready for intended use or sale) are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Pre-operative expenses incurred during construction period are capitalised, where appropriate. B.3 Debrciation and Amortisation: Debrciation being the difference between original cost/ revalued amount and estimated residual value is provided over the estimated useful life of the asset. The useful life of assets & the estimated residual value, which are different from those brscribed under Schedule II to the Companies Act, 2013, are based on technical advice. The useful life and estimated realisable values, adopted are as follows: Type of Useful Life Residual Asset Adopted Value Adopted - Building 3 to 22 Years 5 Percent - Plant and Equipment 12 to 26 Years 5 to 27 Percent Debrciation on additions during the year is provided on pro rata basis with reference to month of addition/ installation. Debrciation on assets disposed /discarded is charged upto the month of sale excluding the month in which such asset is sold. B.4 Impairment of Assets: The Company reviews the carrying value of tangible and intangible assets for any possible impairment at each Balance Sheet date. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of net selling price and value in use. In assessing the recoverable amount, the estimated future cash flows are discounted to their brsent value at appropriate discount rates. If at the Balance Sheet date there is an indication that a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. B.5 Inventories: Inventories, other than realisable by-products, are valued at lower of cost and net realisable value. The cost of inventories is arrived at on moving average price method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of manufactured products comprises direct costs and production overheads including debrciation. Realisable by products are valued at net realisable value. Cost of trading items includes cost of purchase and other costs of acquisition attributable thereto. Retirement Benefits (i) Short term employee benefits are recognised as an expense in the Statement of Profit and Loss of the year in which service is rendered. (ii) Contribution to defined contribution schemes such as Provident Fund, Family Pension Fund and Superannuation Fund are charged to the Statement of Profit and Loss . (iii) The Company makes annual contribution to Employees Group Gratuity cum Life Assurance Scheme in respect of qualifying employees and the same is recognised as an expense in the Statement of Profit and Loss . Additional liability, if any, in respect of gratuity and liability in respect of leave encashment is recognised on the basis of valuation done by an independent actuary applying Project Unit Credit Method. The actuarial gain/ loss arising during the year is recognised in the Statement of Profit and Loss of the year. B.7 Investments: Investments that are readily realisable and are intended to be held for not more than one year, are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at cost or fair value, whichever is lower. Non-current investments are carried at cost. However, provision is made for diminution in the value of these investments, which in the opinion of Board of Directors is other than temporary and the same is made for each investment individually. Investments include investments in shares of companies registered outside India. Such investments are stated at cost by converting relevant foreign currency at the rate of exchange brvailing on the date of acquisition. B.8 Premium on Redemption of Debentures: Premium payable, if any, on redemption of debentures is sbrad over the life of debentures. B.9 Foreign Exchange Transactions: Transactions in foreign currency are accounted at the exchange spot rate brvailing on the date of the transaction. Year end receivables and payables are translated at year end rate of exchange. With effect from 1st April 2011, gain/loss on account of fluctuations in exchange rates pertaining to long term foreign currency borrowings to the extent they are related to acquisition of debrciable fixed assets is adjusted to the cost of asset, and in case of other long term borrowings, the same are amortised over the life of such long term borrowings. In all other cases , the difference on account of fluctuation in the rate of exchange is recognised in the Statement of Profit and Loss. B.10 Forward Exchange Contracts: In case of forward exchange contracts, brmium/discount arising at the inception of the contracts is sbrad over the life of the contracts. Exchange fluctuation on such contracts is recognised in the Statement of Profit & Loss in the year in which there is a change in exchange rates. B.11 Borrowing Costs: In accordance with the requirements of Accounting Standard (AS)16, "Borrowing Costs", borrowing costs directly attributable to acquisition, construction or production of a qualifying asset are added to the cost of those assets , until such time as the assets are substantially ready for their intended use or sale. Other borrowing costs are charged to the Statement of Profit and Loss. B.12 Employee Stock Options: Stock options granted to employees under the "Ruchi Soya Employee Stock Option Plan 2007"are accounted as per accounting treatment brscribed by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the 'Guidance Note on Share Based Payments' issued by the Institute of Chartered Accountant of India (ICAI). Accordingly, the excess of market price of the shares as on the date of grant of options over the exercise price is recognised as deferred employee compensation and is charged to the Statement of Profit and Loss on straight-line basis over the vesting period of the respective option. The number of options expected to vest is based on the best available estimate and is revised, if necessary, where subsequent information indicates that the number of stock options expected to vest differs from the brvious estimates. B.13 Revenue Recognition : Sale of goods: Domestic sales are recognised at the point of dispatch of goods when the substantial risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and are net of returns. Sales are stated net of trade discounts and taxes on sale. Export sales are recognised when significant risks and rewards in respect of ownership of goods are transferred to the buyer as per the terms of the contract. Export entitlements are recognised as income when the right to receive the same as per the terms of the scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate realisation. Carbon Credits are recognised on credit of Carbon Emission Reduction (CER units) by the approving authority in a manner it is unconditionally available to the generating entity. Sale of Services: Revenue from services is recognised on rendering of the services. Income: (i) Dividend income on investment is recognised when the right to receive dividend is established. (ii) Interest and other Income are recognised on accrual basis on time proportion basis. B.14 LEASE ACCOUNTING: As a Lessee Operating lease payments are recognised as expenditure in the Statement of Profit and Loss as per the terms of the respective lease agreements. As a Lessor The Company has given assets on an operating lease basis. Lease rentals are accounted on accrual basis in accordance with the respective lease agreements. B.15 Accounting of Taxes on Income: Tax expense comprises of current tax and deferred tax . Current tax is measured at amount expected to be paid to tax authorities using the applicable tax rates. Deferred tax assets and liabilities are recognised for future tax consequences attributable to timing difference between taxable income and accounting income that are capable of reversal in one or more subsequent years and are measured using relevant enacted tax rates. Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period. B.16 Provisions and Contingent Liabilities: Provisions: Provisions are recognised when there is a brsent obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the brsent obligation at the balance sheet date and are not discounted to its brsent value. Contingent Liabilities : Contingent liabilities are disclosed in respect of possible obligations that may arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company. The amount of liability is based on a reliable estimate when it is probable that an outflow of resources will be required to settle an obligation and in respect of which a reliable estimate can be made. Provision for contingent liablity is not discounted and is determined based on best estimate required to settle the obligation at the year end date. Contingent assets are not recognized in the financial statements NOTE-1 Employee costs includes remuneration of Rs. 187.37 lac paid to the Managing Director in excess of the permissible limits. The Company proposes to apply to the Central Government for the necessary approval and also obtain sanction of the members in the ensuing General Meeting. NOTE-2. Remuneration of Rs. 0.12 lac paid to a Director in excess of the permissible limits and included under the head Other receivables under Short term loans and advances in Note 19. The Company proposes to recover the same from the said Director. NOTE-3Subsequent to Close of the year ended March 31, 2015, the Company discovered misappropriation of funds by certain employees of two of the branches situated at Ampapuram and Peddapuram in the state of Andhra Pradesh. The Company has initiated enquiries and investigation is in progress to ascertain the amount of loss. The Company is in process of filing compliant with the Police authorities. Pending investigation, the amount of loss on account of the above can not be estimated. NOTE-4 brVIOUS YEAR FIGURES: The figures for the brvious year have been regrouped wherever necessary to conform to current years classification. As per our report of even date attached For and on behalf of For and on behalf of the Board of Directors P.D. Kunte & Co. (Regd.) Chartered Accountants R. L. Gupta Company Secretary Kailash Shahra Chairman D. P. Sabr Partner Membership No. 40740 V Suresh Kumar Chief Financial Officer Dinesh Shahra Managing Director Place: Mumbai Date: May 27, 2015 |