1. CORPORATE INFORMATION
The Sukhjit Starch & Chemicals Limited (''The Company'') is a Public Limited Company incorporated and domiciled in India. The address of its registered office is Sarai Road, Phagwara - 144401.
The company is an Agro-Processing Industry manufacturing starch & its derivatives i.e. Liquid Glucose, Dextrose Monohydrate, Dextrose Anhydrous, Sorbitol, Modified Starches and by-products. The company has emerged as one of the largest manufacturers of the Starch and its derivatives in India having multi- locational manufacturing units at Phagwara (Punjab), Nizamabad (Telangana), Malda (West Bengal) and Gurplah (Himachal Pradesh).
The Company is listed on the Bombay Stock Exchange Ltd. (BSE) & the National Stock Exchange Ltd (NSE). The standalone financial statements for the year ended March 31,2025 were approved by the Board of Directors on 30th May, 2025.
STATEMENT OF COMPLIANCE & BASIS OF PREPARATION OF FINANCIAL STATEMENTS
(i) These financial statements are the separate financial statements of the Company (also called standalone financial statements) prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015.
The accounts prepared in accordance with Ind AS and Disclosures thereunder comply with the requirements of Ind AS, stipulations contained in Schedule-III (revised) as applicable under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014, Companies (Indian Accounting Standards) Rules 2015 as amended from time to time and rules & guidelines issued by SEBI, as applicable.
(ii) The financial statements have been prepared on historical cash basis except for certain financial assets and financial liabilities that are valued at fair value or amortized book value.
All assets and liabilities except deferred tax and liabilities have been classified as current or noncurrent as per normal operating cycle / criteria given in schedule III to the Act. Deferred tax assets or liabilities are classified as non-current. The company has been taken operating cycle of 12 months for classification of its assets and liabilities as current and non-current.
2. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted by the company for preparation of its financial statements are
listed hereunder and these policies have been consistently followed in all the years unless otherwise stated.
(A) Use of Estimates, judgments and assumptions
The preparation of financial statements and disclosures made therein require the management to make estimates and assumptions considered in the reported amount of assets and liabilities (including contingent liabilities) as on the date of financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and based upon the reasonable evaluation of relevant facts and circumstances as on the date of financial statements. Actual results could differ from these estimates materiality in case of certain items like provision of employee benefits, residual life of property, plant & equipment and intangible assets, valuation of estimates or provisions for bad & doubtful debts. The necessary information concerning estimates is given in the respective notes with information about basis of calculation for each affected line item in the financial statements. Any revision to accounting estimates is recognized prospectively in the current and future periods.
(B) Property, Plant and Equipment
These are tangible assets held for use in production, supply of goods or services or for administrative purposes. These are recognized and carried under cost model i.e. cost less accumulated depreciation and impairment loss, if any which is akin to recognition criteria under erstwhile GAAP. Freehold land is carried at cost of acquisition.
(i) The cost includes freight, duties, taxes and other expenses directly incidental to acquisition, bringing the asset to the location and installation including site restoration up to the time when the asset is ready for intended use. The cost includes cost of replacing parts of plant and equipment, if recognition criteria are met. Cost of major inspections, dismantling / removing and site restoration costs are ascertained & capitalized. Such
Costs also include borrowing costs if the recognition criteria are met. All other repair & maintenance costs are recognized in the statement of Profit & Loss.
(ii) Depreciation on Plant & Machinery has been provided on straight line method according to the expected life span of assets and on other fixed assets on written down value. In the following category of property, plant and equipment, the depreciation has been provided on the technical
evaluation of the useful life in case of some items of property, plant and equipment, which is different from the one specified in Schedule II to the Companies Act, 2013 : Plant and Machinery - 5 to 25 years, Office equipment - 5 to 10 years & Vehicles - 8 to 10 years.
(iii) Depreciation on additions to the assets is provided on pro- rata basis from the month of such addition. The residual values, useful life of property, plant & equipment are reviewed at regular intervals and adjusted prospectively, if appropriate.
(iv) During disposal of any Property, Plant and Equipment, any profit earned / loss sustained towards excess / shortfall of sale value vis-avis carrying cost of assets is accounted for in the statement of profit & loss.
(C) Intangible Assets
Intangible asset purchased are measured at cost less accumulated amortisation and accumulated impairment, if any and are amortised as per the useful life on written down value basis, as per the rates specified in the Companies Act, 2013.
Revenue expenditure on research and development are charged off as and when incurred. However, the capital expenditure is considered as a part of the fixed assets and depreciated on the same basis as other fixed assets.
(D) Investment and Financial Assets
(i) Investment in Subsidiaries
The investments in the subsidiaries are recognized at cost i.e. amount paid for acquisition of such investments. The company assess the indication of any
impairment at the end of each reporting period and necessary provision is made for such impairment if the company finds a deficit in the recoverable amount over the cost.
(ii) Other Investments and Financial Assets
The classification of financial assets is done at initial recognition i.e. those to be measured subsequently at fair value through Profit & Loss account (FVTPL) or through other comprehensive income (FVTOCI) and those to be measured at amortized cost. Classification also depends on Company's objective for holding these financial assets and contractual terms of cash flows.
Trade receivables that do not contain significant financing component are measured at transactional price determined under Ind AS115.
Subsequent measurement of financial assets depends upon Company's objective for holding the assets and cash flows characteristics of the financial asset like debt instrument is measured at amortized cost of the asset if held for collecting contractual cash flows and stipulated terms give rise to cash flows that comprise only payments of principal and Interest (on specified dates) on the principal amount outstanding.
Equity instruments carried within the scope of Ind AS 109 are measured at fair value. The equity instruments which are held for trading are classified at FVTPL. For all other equity instruments the Company may make an irrevocable election to present the subsequent changes in their fair value in other comprehensive income. The Classification is made at initial recognition and is irreversible. All financial assets that don't meet the criteria for amortized cost or FVTOCI are measured at fair value through Profit & Loss Account.
Impairment of financial assets is assessed on the basis of expected credit losses associated with the financial assets like trade receivables, deposits, lease receivables or debt security and carried at its amortized cost.
Any significant risk in credit is duly provided in the Profit & Loss Account. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability has taken place in the principal market for the asset or liability or in the most advantageous market for the asset or liability and such markets are accessible to the company.
A fair value measurement of a non- financial asset takes into account the ability of a market participant to generate economic benefits by selling it to another market participant who can use the asset to its best use. The company uses the valuation process that is appropriate and relevant to the circumstances and for which sufficient data are available by maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. The assets and liabilities for which fair value is measured or disclosed in the financial statements have been categorized within the fair value hierarchy on the basis of inputs to valuation process, in order to ensure consistency and comparability in fair value measurement:
Level 1 :
Quoted (unadjusted) market price in the active market for the identical assets or liabilities and the company can access the market on the measurement date. In the absence of active market, a most advantageous market is available, enabling the company to do transaction for the asset or liability at the price in that market on the measurement date.
Level 2 :
Relates to an asset or liability where observable inputs are available other than quoted price included in level 1 and these inputs may include quoted price for similar assets or liabilities in an active market / identical or similar assets or liabilities in the markets that are not active. The other observable inputs may also include interest rates, credit spreads, implied volatilities etc. The adjustment to level 2 inputs may vary according to the condition / location of the asset, volume / level of activities in the market for similar assets or liabilities or other inputs specific / comparable to the asset or liability of the company.
Level 3 :
Unobservable inputs are used to measure the fair value to the extent relevant for the asset or liability at the measurement date. The inputs can be developed on the basis of best information available in the circumstances and necessary adjustment is made to the data used by other market participants according to the nature of the asset or liability.
(E) Inventories
The cost of inventories include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present form / locations. It includes duties & Taxes (other than those recoverable by the Company
from the tax authorities), freight inward and other expenses directly attributable / incidental to the purchase.
(i) Raw materials are valued at cost on weighted average basis or net realisable value whichever is lower.
(ii) Finished goods & Stock in Process are valued at cost of manufacturing or net realisable value whichever is lower.
(iii) Bye Products are valued at net realisable value.
(iv) Stores, Packing Materials & Tools are valued at cost on weighted average basis or net realisable value whichever is lower.
The net realizable value is ascertained on the basis of estimated sales realization during normal course of business net of expenses required to be incurred to complete the transaction.
(F) Cash and Cash Equivalents
Cash and Cash equivalents comprise of cash in hand, cheques in hand and balances of current accounts with banks.
(G) Income Tax and Deferred Tax
The liability of company on account of Income Tax is computed according to the applicable provisions of the Income Tax Act, 1961 &
rules thereunder. Deferred tax is provided using balance sheet approach on temporary differences at the reporting date as difference between the tax base use in the computation of taxable profits and the carrying amount of assets and liabilities. Deferred tax asset is recognized subject to the probability that taxable profit will be available against which the temporary differences can be reversed.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted & applicable at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised in the other comprehensive income.
(H) Lease assets
The company recognises Right-Of-Use Asset (ROU Asset) held under a lease under the head Property Plant & Equipment. The total cost of this ROU Asset has been measured as present value
of the future lease payments by discounting total lease payments with interest rate implicit in the lease using the 'Modified Retrospective Approach'. Instead of claiming actual lease payment as an expense, the composite present value of ROU Asset is depreciated under straight line method and interest cost for corresponding lease liability is expensed accordingly, in line with the accounting treatment required by Ind AS 116. For the reporting year, the carrying amount of ROU Asset is an amount equal to the carrying amount of the lease liability on the transition date computed as present value of all future lease payments discounted at an interest rate implicit in the lease.
(I) Revenue Recognition
(A) Sale of Goods
(a) Revenue is recognized on the transfer of goods to a customer for an amount that reflects the consideration to which company expects to be entitled in exchange for those goods.
(b) Revenue is measured at the fair value received or receivable net of discounts, quantity rebates or incentives and taxes on sales. The amount received / receivable from the customer is recognised as sales revenue after the control, over the goods sold, are transferred to the customer which is generally dispatch of goods.
(c) Variable consideration includes quantity rebates, discounts etc which are estimated at the contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized, will not occur when the associated uncertainty with the variable consideration is subsequently resolved. In pursuance to AS115, using the practical expedient, the company does not adjust the promised consideration for the effects of a significant financing component concerning the short term advances, if any received from its customers.
(B) Dividends are recognised in profit & loss account only when right to receive the payment is established.
(C) Interest income is recognized in the statement of profit and loss on time proportion basis taking into consideration the outstanding amount and the applicable rate of interest.
(D) Insurance or other claims are accounted for on the basis of claims admitted by the insurers and right to receive the claim gets established.
(J) Government subsidy / Grants
Government Grants are recognized only when
there is a reasonable assurance that the entity
will comply with the conditions attached thereto
and the grants will be received.
(i) Subsidy/ Grants related to assets are presented in balance sheet as 'Deferred Income' which is recognized in the statement of profit & loss under the head 'other income' on a systematic basis over the useful life of the assets
(ii) Subsidy / Grants related to expenses are treated in statement of profit & loss under the head for which the grants are intended to compensate.
(K) Employee Benefits
(i) Short term employee benefits are charged to the profit & loss account of the year in which the employee renders services. These benefits include Annual leave encashment, Ex-gratia etc.
(ii) A defined contribution plan comprises contribution to Employees Provident fund, Employee Pension Scheme and Employee State Insurance which are deposited with the respective Government departments. These contributions are recognized as expense during the periods employees perform services. Contributions to superannuation plan for certain category of employees (to provide an agreed benefit) are deposited with the life insurance corporation of India and charged to the profit and loss account on the same basis.
(iii) Defined benefit plans include gratuity which is determined on the basis of actuarial valuation at the end of the year and contributions are deposited with SBI Life Insurance Company Ltd. under a separate trust and charged to the profit and loss account / other comprehensive income of the relevant year.
(L) Foreign Currency Transaction
The company's financial statements are presented in INR, which is also the company's functional currency. Foreign currency transactions relating to sale of goods are translated at the rates prevailing at the time of settlement of transactions. The transactions which remain unsettled as on the balance sheet date are translated at the contracted rates (where applicable)or on the exchange rates prevailing at the end of the accounting year.
Any income or expenditure on account of exchange difference (on transaction) is recognized in the profit and loss account except Long term liabilities relating to acquisition of fixed assets where they are adjusted to the cost of asset and depreciated over the balance life of the assets.
(M) Impairment
I mpairment loss, if any, is provided, by making provision, to the extent carrying cost of an asset exceeds its realizable value.
(N) Borrowing Cost
Borrowings cost related to specific borrowings for acquisition / construction / errection of a qualifying asset are capitalized as a part of the cost of such asset till such time the asset is ready for its intended use. Borrowing cost related to general borrowings for acquisition /construction
/errection of a qualifying asset are capitalized as a part of the cost by applying a capitalization rate as per IND-AS 23.
(O) Provisions, Contingent Liability and Contingent Assets
Disputed liabilities and claims, against the company including claims raised by fiscal authorities pending in appeal / court for which no reliable estimate can be made and / or involves uncertainty of the outcome of the amount of the obligation, are not provided for in the accounts but disclosed in notes to accounts.
(P) Earnings Per Share
For the purpose of calculating basic earnings per share, the net profit or loss for the period attributable to equity shareholders after deducting any attributable tax thereto for the period is divided by weighted number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares (if any).
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