1. SIGNIFICANT ACCOUNTING POLICIES a) Basis of accounting and brparation of financial statements The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the 1956 Act / 2013 Act, as applicable. The financial statements have been brpared on accrual basis under the historical cost convention, as modified to include the revaluation of certain fixed assets. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. b) Use of estimates The brparation of financial statements in conformity with Indian GAAP requires management to make prudent and reasonable estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the results of operations during the year. Differences between the actual results and estimates are recognised in the year in which the results are known or materialised. c) Fixed assets i) Owned assets All fixed assets are stated at cost of acquisition or construction including taxes and other incidental expenses related to acquisition, installation cost, except for certain assets which are revalued and are, therefore, stated at their revalued book values. Financing costs (up to the date the assets are ready for their intended use) relating to borrowed funds or deferred credits attributable to acquisition or construction of fixed assets are included in the gross book value of fixed assets to which they relate. ii) Impairment of fixed assets Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognised whenever 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 value in use, the estimated future cash flows are discounted to their brsent value based on an appropriate discount factor. d) Debrciation and amortisation i) Debrciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Debrciation on tangible fixed assets has been provided on the straight-line method as per the useful life brscribed in the Schedule II to the Companies Act, 2013. Amortisation of intangible fixed assets, being computer software is done on straight line method over 5 years. ii) Debrciation is calculated on a pro-rata basis only in respect of additions to plant and machinery having a cost in excess of Rs. 5000. Assets costing upto Rs. 5000 are fully debrciated in the year of purchase. No debrciation is provided on assets sold, discarded, etc. during the year. iii) In respect of revalued assets, an amount equivalent to the additional charge arising due to revaluation is transferred from the Revaluation reserve to General Reserve. iv) No write-off is made in respect of leasehold land in case of long term lease. e) Investments Long term investments are stated at cost as reduced by amounts written off / provision made for diminution, other than temporary, in the value of such investments. Current investments are stated at cost or fair value, whichever is lower. f) Inventories Stores and spares are valued at cost or under. Stock-in-trade is valued at the lower of cost and net realisable value. Cost of inventories is ascertained on a 'weighted average' basis. In the case of finished goods and process stocks, appropriate share of labour, overheads and excise duty is included. g) Research and development Revenue expenditure on research and development is charged as an expense in the year in which it is incurred and the capital expenditure is included in fixed assets. h) Government Grants, subsidies and export benefits Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and the same will be received. Government grants and subsidies are recognised as income and / or as reduction of cost over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same. i) Employee benefits Provision for employee benefits charged on accrual basis is determined based on Accounting Standard (AS) 15 (Revised) "Employee Benefits" as specified under section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. i) Contributions to the provident fund, gratuity fund and superannuation fund are charged to revenue. ii) Gratuity liability determined at balance sheet date on an actuarial basis is provided to the extent not covered by the funds available in the gratuity fund. Excess funding, if any, is recognised as an asset. iii) Provision for privilege and medical leave salary is determined on actuarial basis. iv) Provision for casual leave is determined on arithmetical basis. v) Actuarial gains / losses are recognised immediately in the Statement of Profit & Loss. j) Foreign currency transactions Transactions in foreign currency are recorded at the exchange rates brvailing on the date of the transaction. Monetary items denominated in foreign currency are reported using the closing exchange rates on the date of the balance sheet. The exchange differences arising on settlement of monetary items or on reporting these items at the rates different from the rates at which these were initially recorded / reported in brvious financial statements, are recognised as income / expense in the year in which they arise. In case of forward exchange contracts, the brmium or discount, arising at the inception of such contracts is amortised as income or expense over the life of the contract and the exchange differences on such contracts, i.e., differences between the exchange rates at the reporting/ settlement date and the exchange rates on the date of inception of contract/ the last reporting date, is recognised as income / expense for the year. k) Revenue recognition Sale of goods is recognised, net of returns and trade discounts on the transfer of significant risks and rewards of ownership to the buyer which generally coincides with the dispatch of goods to customers. Gross sales are inclusive of excise duty and net of value added tax / sales tax. Sale of Renewable Energy Certificates (RECs) is recognised as income on delivery of the RECs to customer's account as evidenced by confirmation of delivery instructions. Other income includes interest income accounted on time - proportion basis and dividend income accounted for as and when the right to receive the payment is established. l) Income-tax Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternate Tax (MAT) paid is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company. Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In respect of unabsorbed debrciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised based on virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. m) Operating Cycle Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current. 1. Segment reporting A. Business segments Based on the guiding principles given in Accounting Standard (AS) 17 "Segment Reporting" specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, the Company's business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yarn, cord, fabric etc.) and Chemicals (comprising Organics & fine Chemicals). B. Geographical segments The Company's geographical segments are Domestic and Overseas, by location of customers. C. Segment accounting policies In addition to the significant accounting policies applicable to the segments as set out in note 1 of notes forming part of the financial statement, the accounting policies in relation to segment accounting are as under :- i) Segment assets and liabilities Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities allocable to two or more segments are allocated to the segments on a reasonable basis. ii) Segment revenue and expenses Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segment. iii) Unallocated expenses Unallocated expenses rebrsent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results. iv) Inter segment sales Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation 2. Schedule II of the Companies Act, 2013 became applicable w.e.f. April 1, 2014. Accordingly, in respect of fixed assets where the remaining useful life as per Schedule II was Nil as on April 1, 2014 the carrying amount (after retaining residual value) of Rs. 556.06 lacs (including revalued amount Rs. 316.94 lacs and net of deferred tax Rs. 123.13 lacs) was adjusted against the opening balance of Surplus in Statement of Profit and Loss and the revalued amount was transferred from Revaluation reserve to General reserve in the brvious year. The Govt. of Uttar Pradesh had announced subsidy on sugarcane purchased during sugar season 2014-15 to be finalised by a Committee constituted by them. During the year the company received Rs. 4815.57 lacs against the same out of which Rs. 3277.93 lacs was accounted for in 2014-15 and balance Rs. 1537.64 lacs has been accounted for in the Statement of Profit and Loss for the year by adjustment of raw material consumption in note 23. 3. Previous year's figures have been regrouped / recast wherever necessary to correspond with the current year's classification / disclosures. Signatures to Notes forming part of Financial Statements For and on behalf of the Board Shri Tilak Dhar Chairman & Managing Director Shri Alok B. Shriram Vice Chairman & Dy. Managing Director Shri P.R. Khanna Directors Shri S.B. Mathur Directors Shri Ravinder Narain Directors Shri S.C. Kumar Directors Shri C. Vikas Rao Directors Smt. Kavitha Dutt Chitturi Directors B.P. Khandelwal President N.K. Jain Chief Financial Officer Y.D. Gupta Sr. General Manager & Company Secretary Place : New Delhi Date : 30.5.2016 |