a. Terms/rights attached to equity shares
The company has issued only one class of equity shares having face value of? 10/- each. One equity share carries one vote. The members are entitled to vote in accordance with their shareholding. The Company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
Description of nature and purpose of Reserve :
Capital Reserve is utilised in accordance with the Act and not available for distribution by way of dividend
Securities Premium represents premium on issue of Shares. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.
Capital Redemption Reserve is created for redemption of Preference Shares and it is not available for distribution by way of dividend
General Reserve is created out of retained earnings from time to time.
Retained Earnings: Retained Earnings are the profits that the company has earned till date of the balance sheet less any transfers to other reserves and dividend paid to the shareholders, if any.
Other Comprehensive Income: Other Comprehensive Income represents the cumulative gain/loss arising on measurement of Equity Instruments at fair value and remeasurement of Defined Benefit Obligation. This would not be reclassified to the statement of profit and loss.
18.1 Rupee term loan of 7 300 Lakhs (7 700 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable fixed assets of Sugar Unit I.
Theloancarrieslnterestattherateof 1 YearMCLR and repayable in 20 equal quarterly instalments starting from December 2018
The loan amount repayable within twelve months of 7 300 Lakhs (7 400 Lakhs) is grouped under Short Term Borrowings.
18.2 Rupee term loan of 74125 Lakhs (7 5625 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable fixed assets of Distillery Plant at Unit II.
The loan carries Interest at the rate of 0.20% over applicable six months MCLR and repayable in 20 equal quarterly instalments from March 2021
The loan amount repayable within twelve months of 71500 Lakhs (71500 Lakhs) is grouped under Short Term Borrowings.
18.3 Working Capital Rupee term loan of 7 12500 Lakhs (Nil) from The Federal Bank Ltd is secured by way of exclusive charge against receivable from TANGEDCO lor supply of power from Cogeneration units and Wind mills.
The loan carries Interest at the rate of Repo Rate plus sperad of 1.40% and repayable in 12 equal quarterly instalments from December 2022
The loan amount repayable within twelve months of 7 5000 Lakhs (Nil) is grouped under ShortTerm Borrowings.
18.4 Loan from Sugar Development Fund (Government of India) availed for modernisation of Sugar Unit-1, amounting to
passu first charge basis on the immovable and movable properties of Sugar Plant at Unit-1.
The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and payment of interest thereon commences after the expi ry of one year from the repayment of bank term loan and interest thereon or on the expiry of a period of 5 years reckoned from the date of disbursementwhichever is earlier in ten half yearly instalments.
The loan amount repayable within twelve months of 7 113.96 Lakhs (Nil) is grouped under ShortTerm Borrowings.
18.5 Loan from Sugar Development Fund (Government of India) availed for modernisation cum expansion of Sugar Unit-Ill, amounting to 7 2128.17 Lakhs (7 2736.21 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Plant at Unit-Ill.
The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement and repayable in ten half yearly instalments from December 2021.
The loan amount repayable within twelve months of 7 608.04 Lakhs (7 608.04 Lakhs) is grouped under Short Term Borrowings.
18.6 Loan from Sugar Development Fund (Government of India) availed for setting up of 20 MW bagasse based cogeneration plant at Sugar Unit-Ill, amounting to 7 1053.20 Lakhs (7 1474.75 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Cogeneration Plant at Unit-Ill.
The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Interest shall be paid half yearly for the first three years from the date of each disbursement after which it shall be paid half yearly alongwith repayment of principal.
Repayment of principal shall commence after expiry of three years reckoned from the date of each disbursement and it shall be paid in ten half yearly instalments.
The loan amount repayable within twelve months of 7 421.55 Lakhs (7421.55 Lakhs) is grouped under ShortTerm Borrowings.
18.7 Loan from Sugar Development Fund (Government of India) availed for expansion of distillery plant at Sugar Unit-ll from 60 KLPD to 150 KLPD for production of ethanol from molasses with spent wash incineration to achieve ZLD, amounting to 7 3451.13 Lakhs (7 4601.50 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Unit-ll.
The loan carries interest at the date of 2% below the bank rate prevailing on the date of disbursement. Repayment of loan shall commence after the expiry of one year from the dale of each disbursement of the loan and shall be in eight half yearly instalment. The interest shall be paid annually for the first year from the date of disbursement after which it shall be paid half yearly alongwith instalments.
The loan amount repayable within twelve months of ? 1150.38 Lakhs (? 1150.38 Lakhs) is grouped under Short Term Borrowings.
18.8 The purchase tax of ? 171.29 Lakhs (? 239.34 Lakhs) payable to Government of Karnataka for purchase of Sugarcane to Sugar Unit III during the years ended 31.03.2015 and 31.03.2016 has been converted into interest free loan. The loan is secured by issue
of Bank Guarantee from ICICI Bank Limited. The loan is repayable in five annual instalments from the sixth year of Conversion into Loan
The loan amount repayable within twelve months is ? 68.05 Lakhs (? 68.05 Lakhs) is grouped under ShortTerm Borrowings.
18.9 None of the Directors has given any Security or Guarantee to any borrowings.
23.1 Cash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank, Canara Bank, The Federal Bank Ltd, The Karur Vysya Bank Ltd, Indian Overseas Bank, State Bank of India, Bank of India, Axis bank Ltd, ICICI Bank Ltd and The HDFC Bank Ltd to the company are secured by way of hypothecation of current assets and other movable block assets of the sugar units I, II, III, IV and V and third mortgage on the immovable properties of the Sugar units I, II, III, IVandV.
The credit limit availed as at 31.03.2023 is ' 20688.23 Lakhs (' 49979.89 Lakhs)
The availed limits are repayable on demand and
carries interest rates between Bank's MCLR plus 0% and 1.85% perannum.
23.2 The Unsecured Short term loan of Nil (? 8000 Lakhs) from HDFC Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at the rate of 4.50% perannum.
The Unsecured short term loan of ? 12500 lakhs (? 12500 lakhs) from The Federal Bank Ltd is repayable within ninety days from the date of availment and carries interest at 7.35% perannum.
The Unsecured short term loan of Nil (? 9000 lakhs) from Axis Bank Ltd is repayable within a period ranges from thirty days to one hundred and eighty days from the date of availment and carries interest at 4.50% perannum.
43. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) CONTINGENT LIABILITIES
43.1. The company has preferred a Writ Appeal before the Division Bench of the Hon'ble High Court, Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is ? 608.45 Lakhs (? 577.24 Lakhs)
43.2. Sugar Unit-1 at Sathyamangalam was permitted to sell 100% of the sugar
production as Free Sugar for a period of 8 years from 1985-86 Sugar Reason. Chief Director (Sugar), Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar. The approximate unprovided quantum under dispute is?683.35 Lakhs.
43.3 The Company has received a demand for payment of excise duty for ? 148.44 lakhs on the machineries purchased for co-
generation plant in Sugar Unit-ll which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon'ble High Court of Madras.
43.4 The Company has Income Tax demand of ' 139.36 lakhs for the assessment years from 2015-16 to 2018-19. The Company has preferred appeal before Commissioner of Income Tax (Appeals) in respect of the Income Tax proceedings of the above mentioned assessmentyears.
COMMITMENTS
43.5. Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is ? 8120.07 Lakhs (?2116.49 lakhs).
i) The Interest on lease liabilities is included under Finance Costs in the Statement of Profit & Loss
ii) The payment of Principal and Interest on lease liabilities has been disclosed under Financing activities in the statement of cash flow.
45. DISCLOSURE UNDER IND AS 19 :
i) DEFINED CONTRIBUTION PLAN :
The Company has defined contribution plan like Provident Fund and Employees State Insurance Scheme for the benefit of employees. Contributions are made at the specified rate of percentage to payroll cost as per the regulations to fund the benefits. The expenses recognised in the statement of profit and loss is ? 770.10 Lakhs (? 663.54 Lakhs)
ii) DEFINED BENEFIT PLAN :
GRATUITY
The company provides the Gratuity benefit through annual contributions to the fund managed by Life Insurance Corporation of India (LIC).
The defined benefit plans expose to the actuarial risks such as:
a) Interest Rate Risk:
The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to government bond yields. 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 obligation.
b) Salary Risk:
The present value of the defined benefit plan is calculated based on the salary of plan participants in the future. Accordingly, an increase in salary of the plan participants will increase the defined benefit obligation and will have an exponential effect.
c) Investment Risk:
The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to government bond yields. If there are significant changes in the discount rate during the inter valuation period, it can result in wide fluctuations in the net liability or plan assets
d) Variability in mortality rates:
The present value of the defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. If actual mortality rates are higher than the assumed mortality rate assumption, there is a risk of payment of gratuity benefits earlier than expected.
The following table sets out the details of the defined benefits obligations and amount recognised in the financial statements
F SENSITIVITY ANALYSIS
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The defined benefit obligation increases / (decrease) as follows:
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations 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.
The expected contribution to the plan for the next Annual reporting period is ? 208.40 Lakhs (? 146.03 lakhs)
46. SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH 2023
Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts. Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Geographical revenues are allocated based on the location of the customer. The Company has the following operating segments, which are its reportable segments.
Operating segment disclosures are consistent with the information provided to and reviewed by the Chief Operating Decision Maker (CODM).
These operating segments have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.
50 BORROWINGS COSTS
The Company has capitalised the specific borrowing cost of Nil (? 392.37 Lakhs) during the period which were incurred specifically to get ready the qualifying assets for their intended use.
The Company uses the following Fair Value Hierarchy for determining and disclosing the fair value of the finanicial instruments.
Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilties
Level 2 : inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 : inputs that are unobservable for the asset or liability.
The carrying amount of financial assets and 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 amount would be significantly different from the values that would eventually be received or settled.
57. FINANCIAL RISK MANAGEMENT - OBJECTIVES & POLICIES
The Company's principal financial liabilities includes borrowings, trade payable and other financial liabilities. The main purpose of these financial liabilities is to finance the Com pan/s operations. The Compan/s principal financial assets include investments, trade receivables, cash and cash equivalents, Bank Balance other than cash and cash equivalent, loans and other financial assets that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Compan/s senior management under the supervision of Risk management committee / Board of Directors oversees the management of these risks and the appropriate financial risk governance framework for the Company. The senior management provides assurance that the Compan/s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Compan/s policies and risk objectives.
a) 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 price. Market risk comprises three types of risk: interest rate risk, currency risk and other risks, such as regulatory risk and commodity price risk. Financial Instruments affected by market risk includes investment, borrowings, trade receivable, trade payable and loans.
i) 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 rate. The Compan/s exposure to the risk of changes in market interest rates relates primarily to the Compan/s borrowings obligations with floating interest rate. Interest rate risk is managed by maintaining a combination of fixed and floating rate debt and cash management policies.
The company determines the sensitivity of 25 basis points increase (or) decrease on borrowings with floating rate of interest. The impact on the Profit after tax at the reporting date, assuming outstanding balance and other factors remain constant for the whole year, except the rate of interest, would be ? 125.28 Lakhs (^214.51 Lakhs).
ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rate. The Com pan/s exposure to the risk of changes in foreign exchange rate relates primarily to the Compan/s foreign currency denominated financial assets and financial liabilities.
The carrying amounts of the Compan/s foreign currency denominated monetary assets and liabilities at the end of the reporting period is as under.
The above table represents total exposure of the Company towards foreign exchange denominated liabilities (net). Thedetails of unhedged exposures are given as part of Note No.51.
The company determines the sensitivity of 10% increase or decrease in the foreign currency rate. The impact on the profit after tax and total equity at the reporting date, assuming other factors constant except the exchange difference will be ? 4.46 Lakhs (? 15.10 Lakhs)
iii) Other price risk
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. The Company is exposed to price risk arising mainly from investments in equity instruments recognised at FVTOCI. As at 31 st March, 2023, the carrying value of such equity instruments recognised at FVTOCI amounts to? 168.88 Lakhs (? 119.06 Lakhs). The details of such investments in equity instruments are given in Note No 5.
b) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument leading to a financial loss. Credit risk arising from trade receivables is managed in accordance with the Compan/s established policy, procedures and control relating to customer credit risk management. The Company had managed the credit risk with respect to trade receivables by selling majority of sugar sales covering minimal portion on credit basis.
The Compan/s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties. The company manages the risk by credit aprroval. Credit quality of a customer is assessed based on a detailed study of creditworthiness and accordingly individual credit limits are defined/modified.
The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each balance sheet date. The company has recognised provision for Expected Credit Loss on the financial assets in the statement of Profit and Loss.
Financial assets are written off when there is no reasonable expectation of recovery. However, the Company continues to attempt to recover the receivables and are recognised in the Statement of Profit and Loss when recovered.
c) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result for an inability to sell a financial asset quickly close to its fairvalue.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
58. CAPITAL MANAGEMENT
The objective of Capital Management is to safeguard its ability to continue as a going concern and optimise the returns to shareholders. Capital includes paid up equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company and debt refers to Long Term Borrowings, Short Term Borrowings and Interest accrued thereon for the purpose of Capital Management of the Company.
The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of the financial covenants. The capital structure of the Company consist of net debt and total equity of the Company.
In order to achieve this overall objectives, 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. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.
59. RECOGNITION OF LATE PAYMENT SURCHARGE (LPSC)
The Company has recognised ? 3289.36 Lakhs towards Late Payment surcharge (LPSC) upto 03.06.2022 on the receivable as on 31.03.2022 from TANGEDCO vide The Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 under Other Income. The total outstanding including LPSC will be paid by TANGEDCO in 48 monthly installments from August, 2022. The carrying amount of LPSC has been classified under Other Financial Assets in the Balance Sheet. The installments comprising receivables and LPSC beyond next twelve months is classified under non-current assets in the Balance sheet. The original due date of such trade receivables has been considered for the purpose of ageing schedule. The Expected Credit Loss on such receivables has been disclosed under Other Expenses in Statement of Profit & Loss.
60. ADDITIONAL REGULATORY INFORMATION
i) Title Deed of Immovable Properties not held in the name of the Company:
All immovable properties of the Company are held in the name of the Company.
ii) Fair Value of Investment Property :
The Company as on the reporting date doesn't have any Investment Properly.
x) Wilful Defaulter : The Company has not been declared wilful defaulter.
xi) Relationship with struck off companies : Nil
xii) Registration/ Satisfaction of charges with Registrar of Companies : The Company does not have any charges yet to be registered or file the satisfaction of charges with Registrar of Companies beyond the statutory period.
xiii) Layers of Companies : The Company does not have any subsidiary or associate company.
xiv) Approved Scheme of Arrangements: Nil
xv) Utilisation of Borrowed funds and Share premium:
A) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
iii) Revaluation of Property, Plant and Equipment :
The Company has not revalued the Properly, Plant and Equipment during the year.
iv) Revaluation of Intangible Assets :
Not Applicable.
v) Loans and advances granted to Promoters, Directors, KMPs and the related parties :
The Company has not granted any loans to promoters, directors, KMPs and the related parties as defined under Companies Act, 2013 either jointly or severally with any other person that are repayable on demand or without specifying any terms or period of repayment.
vi) Capital Work-in-Progress :
The ageing schedule of Capital Work-in-Progress has been disclosed in Note No. 2 - Properly, Plant and Equipment.
vii) Intangible Assets under development :
Not Applicable.
viii) Details of Benami Property :
Nil
ix) Reconciliation of Statement of Current Assets filed by the Company with banks for Working Capital facilities availed by the Company:
Name of the Bank : Punjab National Bank (Consortium Leader).
61. Previous year's figures have been regrouped / reclassified wherever necessary.
62. EVENTS OCCURING AFTER BALANCE SHEET DATE - PROPOSED DIVIDEND
The Board of Directors at its meeting held on 24th May 2023 has recommended a payment of final dividend of ? 12.50/- per equity share for the year ended 31 * March, 2023 amounting to ? 1567.46 lakhs.
The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.
63. APPROVAL OF FINANCIAL STATEMENTS
The Financial statements are reviewed and recommended by Audit Committee and approved for issue by the Board of Directors at their meeting held on 24* May 2023.
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