The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
a) Reconciliation of shares outstanding at the beginning and at the end of the year
No change during the period
b) Rights, preferences and restrictions attached to equity shares
The Equity shares of the company having par value of ' 10 per share rank pari passu in all respects including voting rights, dividend entitlement and repayment of capital.
There is no change in the % of holding in the case of any promoter during the year or in the previous year. e) Management of Capital:
The company pursues a policy of conservative capital structure that seeks to provide adequate capital to its business for growth and create sustainable stakeholder value. Low gearing levels empower the company to navigate cyclical stresses in business. The company funds its operations through internal accruals and lays emphasis on prepayment of debts during up-swing in business cycles.
Proposed Dividend :
The Board of directors at their meeting held on 26th April, 2024 has recommended dividend of ' 7.00 (PY ' 6.50) per equity share of face value of ' 10 each for the financial year ended 31st March, 2024.
This is subject to approval at the ensuing Annual General Meeting of the company and hence not recognized in these financial statements.
(i) Capital Reserve represents gain of a capital nature and is not available for dividend distribution.
(ii) Securities Premium records the premium component on issue of shares and can be utilised only in accordance with the provisions of Companies Act, 2013.
(iii) General Reserve is created by transferring part of Retained Earnings from time to time. It is transfer from one component of equity to another and it is not an item of Other Comprehensive Income. It is a free reserve created to strengthen the net worth of the Company and it is available for dividend distribution in accordance with the provisions of Companies Act, 2013.
(D) Current Tax:
(i) The company has recognized Minimum Alternate Tax ( MAT) since the tax payable under normal computation is lower than MAT.
(ii) Available deduction under Section 80-IA and MAT Credit Receivable being more beneficial, the company has not exercised the option under Section 115BAA of the Income Tax Act.
(E ) Deferred Tax :
MAT credit of ' 143 lakhs (net) for the year (previous year ' 73 lakhs) and ' 1853 lakhs as on 31st March 2024 (' 1710 lakhs as on 31st March 2023 ) is recognised and carried forward as deferred tax asset as there exists reasonable certainty to recover the same in future.
(F) Reversal of Tax (Net):
The company had obtained favourable orders from the High Court of Madras for its depreciation entitlement on fair value of assets transferred under Scheme of Arrangement sanctioned by High Court of Madras. Pursuant to this, the tax department has initiated proceedings during the year to give effect to same. Consequently tax provision since 1st April 1999 has been re-estimated and excess provision (net) of ' 597 Lakhs has been reversed in the current year.
28. Contingent Liabilities and Commitments:
(' in Lakhs)
Particulars
As at 31.03.2024
As at 31.03.2023
a. Contingent Liabilities
Claims against the company not acknowledged as debt
- Indirect tax demands contested
7
- Others
10
b. Commitments
- Contracts for purchase of sugar cane
14,621
18,410
- Estimated value of contracts remaining to be executed on capital account and not provided for
682
273
1. The fair value of investment in quoted equity shares measured at the closing price in the Stock Exchange on the reporting date.
2. In case of trade receivables, cash and cash equivalents, trade payables, short term borrowings and other financial assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the shortterm maturities of these instruments.
3. The fair values of the financial assets and financial liabilities included above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counter-parties.
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
The Company’s financial liabilities comprise mainly trade payables and other payables. The Company’s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, security deposits, trade receivables and other receivables.
The Company is exposed to Market risk, Credit risk and Liquidity risk. The Board of Directors (‘Board’) oversee the management of these financial risks in its regular meetings. Risk Management guidelines as discussed in the Audit Committee and approved by the Board, states the Company’s approach to address uncertainties in its endeavor to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of the Company’s management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate financial risks in order to minimize potential adverse effects on the Company’s financial performance.
The following disclosures summarize the Company’s exposure to financial risks and information regarding use of derivatives employed to manage exposures to such risks.
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 risks interest rate risk, currency risk and other price risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.
(i) Interest Rate Risk
Interest rate risk is not material.
(ii) Foreign Currency Risk
Foreign currency exposure at end of the reporting period - Nil
(iii) Equity Price Risk
Equity price Risk is related to the change in market reference price of the investments in equity securities.
All the investments are held for strategic purposes and not held for trading.
Credit Risk is the risk of financial loss arising from counter party default on its contractual obligations resulting in financial loss to the company. Credit risk encompasses both the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result material concentrations of credit risks.
Exposure to Credit Risk - The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to Credit risk was ' 8966 lakhs as at 31st March 2024, and ' 7951 lakhs as at 31st March 2023 being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables and other financial assets excluding equity investments.
The credit risk arising for the exposure of investing in other balances with banks and bank balances is limited and there is no collateral held against these because the counter parties are scheduled banks under RBI oversight.
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The company has obtained sanction of fund based limit of ' 15 crores and non-fund based limit of ' 1crore from consortium banks towards working capital loan which is secured by first charge of inventories, book debts and immovables. However, utilization against the above facilities as at 31.03.2024 is Nil (PY Nil).
The Company invests its surplus funds in bank fixed deposit, which carry no / low mark to market risks.
32. (i) In terms of the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, power dues outstanding as on 03.06.2022 including Late Payment Surcharge (LPS) till that date were made payable over 48 EMIs, with no further LPS thereon. This was recognised in FY 2022-23. Concurrently fair value adjustment of ' 684 lakhs was recognized in that year.
(ii) Fair value reversals aggregating ' 239 lakhs on receipt of the monthly EMIs during the year is included in Other Income (Note-20).
(iii) EMIs falling due twelve months after the reporting period are classified as non-current trade receivables (Note-4).
Note: (i) 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 Company 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 Company (Ultimate Beneficiaries).
(ii) The Company 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.”
(i) Defined Contribution Plans
The Company makes Provident Fund and Superannuation Fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of eligible pay to fund the benefits.
The Company has recognised ' 126 Lakhs (previous year ' 110 Lakhs) for Provident Fund contributions and ' 36 Lakhs (previous year ' 29 Lakhs) for Superannuation 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.
(ii) Defined Benefit Plans (a) Gratuity
In respect of Gratuity plan, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as of March 31,2024. The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the projected unit cost method.
The following table sets forth the status of the Gratuity Plan of the Company and the amount recognised in the Balance Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through annual contributions to the funds managed by the ICICI Prudential Life Insurance Company Ltd.
The Company pays contribution under the Group Gratuity Scheme to ICICI Prudential Life Insurance Company Ltd. that is invested by the insurer in the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds and Money Market Instruments. The expected rate of return on plan assets based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation. Significant actuarial assumptions for the determination of the defined benefit obligation are as discussed above.
Sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods of assumptions used in preparing the sensitivity analysis from prior years.
Since the measurement of other long term employee benefits is not usually subject to the same degree of uncertainty as the measurement of post-employment benefits - gratuity, simplified method of accounting is adopted i.e. remeasurements are not recognized in Other Comprehensive Income but directly in the Statement of Profit and Loss (para 154 of Ind AS- 19).
The short-term leave obligation covers the company’s liability for casual leave. The entire provision of ' 2 lakhs (PY ' 3 lakhs) is presented as current, since the company does not have an unconditional right to defer settlement for the short-term obligations.
Two customers in Sugar (previous year two) and two customers in Cogen (previous year two) individually contribute to more than 10% of the revenue of respective segment.
The financial statements have been approved for issue by the Board of Directors on 26th April 2024.