NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2015 1. CORPORATE INFORMATION: Riddhi Siddhi Gluco Biols Limited ("the Company") is engaged in the business of generation and selling power through windmill and in business of trading in agriculture and metal commodity items. 2. 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 Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. b) 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. c) Use of estimates: The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. d) Revenue recognition: Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from wind power generation is recognized on the basis of electrical units generated, net of transmission loss, as applicable, as shown in the power generation reports issued by the concerned authorities. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established. Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection. Income from investment in Private Equity Funds ("the fund"), is accounted as and when the same is distributed by the Fund. Return of capital contribution is reduced from the original cost of investment. e) Inventories: Inventories of trading goods are valued at lower of cost and the net realisable value. Cost is determined on a First-In-First- Out(FIFO)basis. f) Fixed Assets and Debrciation: Tangible Fixed Assets Fixed assets are stated at cost, less accumulated debrciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance. Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost and related incidental expenses. Debrciation and Amortisation Debrciable amount for assets is the cost of an asset less its estimated residual value. Debrciation on tangible fixed assets has been provided on the Written down Value (WDV) method as per the useful life brscribed in Schedule II to the Companies Act, 2013. In respect of fixed assets purchased or put to use during the period, debrciation is provided on a pro-rata basis from the date on which such asset is purchased or put to use. Leasehold land is amortised over the balance period of the lease. Intangible Assets and Amortization Intangible assets are stated at cost of acquisition less accumulated amortisation and accumulated impairment loss, if any. Intangible asset i.e. Trademark, is amortized over its estimated useful life of 5 years on straight line basis. g) Impairment: The carrying amounts of assets/ cash generating units are reviewed at each balance sheet date for any indication of impairment based on internal or external factors. An assets is treated as impaired when the carrying cost of asset exceeds its estimated recoverable amount. An impairment loss is recognized in the Statement of Profit and Loss for such excess amount. The recoverable amount is the greater of the asset's net selling price and value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was brviously charged to the Statement of Profit and Loss. After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life. h) Lease: Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis over the lease term. i) Investments: Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried indiwdually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. j) Foreign Currency Translations: Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transactionor at rates that closely approximate the rate at the date of the transaction. Conversion Foreign currency monetary items of the Company, outstanding at the balance sheet date are restated at the year-end rates. Nonmonetary items of the Company are carried at historical cost. Exchange Differences Exchange differences arising on the settlement of monetary items, or on reporting such monetary items of the Company at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or as expense in the Statement of Profit and Loss in the year in which they arise. Forward Exchange Contracts not intended for trading or speculation purposes Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to monetary items as at the balance sheet date. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense in the period in which such cancellation or renewal is made. k) Employee benefits: Employee benefits include provident fund, superannuation fund, gratuity fund, compensated absences, long service awards. Defined contribution plans The Company's contribution to provident fund, superannuation fund are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees. Defined benefit plans For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the brsent value of available refunds and reductions in future contributions to the schemes. Short-term employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of short-term compensated absences is accounted as under : (a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and (b) in case of non-accumulating compensated absences, when the absences occur. Long-term employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the brsent value of the defined benefit obligation as at the balance sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the brsent value of the defined benefit obligation as at the balance sheet date. l) Income Taxes: Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT 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 on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed debrciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed debrciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability. Segment Reporting Policies: The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the Management in deciding how to allocate resources and in assessing performance. The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities". Borrowing Costs: Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset are added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. Earnings Per Share: Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period brsented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate. Derivative Contracts: The Company enters into derivative contracts in the nature of foreign currency swaps, currency options, forward contracts with an intention to hedge its existing assets and liabilities, firm commitments and highly probable transactions in foreign currency. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency transactions and translations. All other derivative contracts are marked to market and losses are recognized in the Statement of Profit and Loss. Gains arising on the same are not recognized, until realized on the grounds of prudence. Provisions and contingencies: A provision is recognised when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements. b. Terms / Rights attached to the shareholders: (i) Equity Shares: The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is eligible for one vote per share. The dividend, if any, proposed by the Board of Directors of the Company is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all brferential amounts, in proportion to their shareholding. The Company declares and pays dividend in Indian rupees. The Board of Directors have recommended dividend of Rs.3 per share (Previous Year: Rs.3 per share), subject to the approval of the shareholders in the ensuing Annual General Meeting. (ii) Preference Shares: The Company has only one class of brference shares i.e. Non Cumulative Redeemable Preference Shares of Rs.10 per share. Such shares shall confer on the holders thereof, the right to a 8% brferential dividend from the date of allotment, on the capital for the time being paid up or credited as paid up thereon subject to the approval of the shareholders in the ensuing Annual General Meeting. Such shares shall rank for capital and dividend and for repayment of capital on winding up, pari passu inter se and in priority to the Equity Shares of the Company, but shall not confer any further or other right to participate either in profits or assets. The terms of redemption of Preference Share capital at face value is extended by two years during the brvious year from November 2013 to November 2015 with a put and call option. The Preference Share capital had original maturity period of 7 years which was extended over a period of time, and again by two years from November 2013 to November 2015. 1. During the year, the Company has bought back 23,41,914 fully paid-up equity shares of Rs.10 per equity shares at the rate of Rs.450 per equity share after complying with the provisions of the Companies Act, 2013 and the Rules framed thereunder in this regard through "Tender Offer" route as brscribed under the SEBI (Buy-Back of Securities) Regulation, 1998. On completion of buy back, the Company has paid Rs.10,538.61 lacs, which has been reduced from Share Capital, General Reserves and Securities Premium Account of the Company by Rs.234.19 lacs, Rs.3,501.52 lacs and Rs.6,802.90 lacs respectively. The Company has also transferred Rs.234.19 lacs from General Reserve to Capital Redemption Reserve pursuant to the Buy Back of Equity Shares. All shares bought under buy back were extinguished by the Company as of March 31, 2015. 2. During the current year, the Company has written back an amount of Rs.2,096.54 lacs towards remission of liability pertaining to plant and machineries purchased which is no longer payable, based upon the settlement reached with the vendor towards compensation of losses suffered by the Company. The amount written back has been disclosed under "Other Income" in the Statement of Profit and Loss. 3. Segment Reporting: a. The Company has identified business segments as its primary segment and geographical segments as its secondary segment. Segments have been identified taking in to account the nature of the products, the differing risks and return, the internal organization and management structure and internal reporting system. b. The Company's Operations br-dominantly relate to Wind Energy Generation and trading of agriculture and metal Commodities. Accordingly, the Company has identified "Wind Energy Generation" and "Trading business" as the primary business segments, consisting of sale of wind power and trading of commodity items respectively. c. Since all the operations of the Company are limited to India only there are no reportable geographical segments. d. Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. Income and expenses, which are not directly relatable to the segments, are shown as unallocated items. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as Unallocable. 4. Figures for the brvious year have been regrouped / rearranged, wherever necessary, to conform to current year's classification. For and on behalf of the Board of Directors of RIDDHI SIDDHI GLUCO BIOLS LIMITED Ganpatraj L Chowdhary Chairman & Managing Director Din No. : 00344816 Mukesh Samdaria Chief Financial Officer Siddharth G. Chowdhary Director DIN : 01798350 Kinjal Shah Company Secretary Place : Ahmedabad Date : 29th May, 2015 |