1.18 Provisions and Contingencies
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and
it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the
amount of such obligation can be reliably estimated.
If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognized as a finance cost.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is
not recognized because it is probable that an outflow of resources will not be required to settle the obligation. However, if the
possibility of outflow of resources, arising out of present obligation, is remote, it is not even disclosed as contingent liability.
A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot
be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the notes to
financial statements. A contingent asset is not recognized in financial statements, however, the same is disclosed where an
inflow of economic benefit is probable.
The Company exercises judgement in measuring and recognising provisions and the exposures to contingent liabilities
related to pending litigation or other outstanding claims subject to negotiated settlement, mediation, arbitration or government
regulation, as well as other contingent liabilities. Judgement is necessary in assessing the likelihood that a pending claim
will succeed, or a liability will arise, and to quantify the possible range of the financial settlement. Because of the inherent
uncertainty in this evaluation process, actual losses may be different from the originally estimated provision.
1.19 Borrowing Costs
Borrowing cost includes interest, amortisation of ancillary cost incurred in connection with the arrangement of borrowings and
the exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the
interest cost. General and specific borrowing costs that are directly attributable to the acquisition, construction or production of
a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended
use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use
or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they
are incurred.
1.20. Exceptional Items
An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of
the performance of the Company is treated as an exceptional item and disclosed as such in the financial statements.
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further
understanding of the financial performance of the Company. These are material items of income or expense that have to be
shown separately due to their nature or incidence.
1.21. Events after Reporting date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting
period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date
of material size or nature are only disclosed.
1.22. Cash and Cash Equivalents
Cash and cash equivalents in the Balance Sheet comprise of cash on hand, demand deposits with Banks, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, demand
deposits with banks, short-term balances (with an original maturity of three months or less from date of acquisition), highly
liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of
changes in value.
1.23. Statement of Cash Flows
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated based on the available information.
1.24. Recent Accounting Pronouncements
a. Amendments to Indian Accounting Standards (Ind AS) effective April 1, 2024:
The Ministry of Corporate Affairs (MCA), vide its notifications dated August 12, 2024, and September 9, 2024, issued the
Companies (Indian Accounting Standards) Amendment Rules, 2024, and the Companies (Indian Accounting Standards)
Second Amendment Rules, 2024, respectively. These amendments primarily relate to Ind AS 117 - Insurance Contracts
and Ind AS 116 - Leases. The Company has assessed the new pronouncements and determined that these amendments
do not have a significant impact on its financial statements.
b. Amendments to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates (effective April 1, 2025):
On May 9, 2025, the MCA notified amendments to Ind AS 21, providing guidance on assessing the exchangeability
of currencies and estimating exchange rates when currencies are not readily convertible. Based on its evaluation, the
Company has concluded that these amendments are not expected to have a material impact on its financial statements.
Nature and Purpose of Reserves:
Capital reserve
It represents the gains of capital nature which mainly includes the excess of value of net assets acquired over consideration paid by the
Company for business amalgamation transaction in earlier years.
Capital redemption reserve
Capital redemption reserve was created in respect of the preference shares redeemed by the Company. This reserve shall be utilised
in accordance with the provisions of the Companies Act, 2013.
Securities premium account
Securities premium is represents the amount of premium received on the equity shares issued by the Company. It is to be utilised in
accordance with the provisions of the Companies Act, 2013.
Retained Earnings
Retained earnings are the profits/losses that the company has earned/incurred till the date of the Balance Sheet, less any transfers to
other reserves, dividends paid or other distributions made to shareholders, if any.
Other Comprehensive Income
Other Comprehensive income (OCI) represents the balance in equity relating to re-measurement gain/(loss) of defined benefit obligation.
This would not be re-classified to Statement of Profit and Loss.
41.1 The sugarcane price for crushing season 2013-14 notified by the State Government over and above FRP announced by the
Central Government is disputed. The Madras High Court ruled in June 2023 that the state government cannot unilaterally set
higher prices and it directed the government to hold a meeting between mills and cane growers to find an amicable solution,
but the mills maintain they are not liable for any payments exceeding the FRP. The High Court's final order on the matter is
pending. The differential price on this account is Rs.9504.47 lakhs for the seasons from 2013-14 to 2016-17.
41.2 Writ petitions were filed by the Company before the High Court of Orissa, Cuttack challenging the Orders passed by the
Deputy Director (Cost), Ministry of Consumer Affairs relating to price payable for supply of levy quotas of sugar for the years
from 1999-2000 to 2009-2010. The recall/review petitions filed by the Company are pending. The amount under dispute is
Rs.2491.06 Lakhs.
42. DISCLOSURES ON ADDITIONAL REGULATORY INFORMATION
42.1 TITLE DEEDS OF IMMOVABLE PROPERTIES NOT HELD IN THE NAME OF THE COMPANY
Title deeds of all immovable properties are held in the name of the Company.
42.2 On transition to Ind AS, the Company has elected to regard the fair values of all its property, plant and equipment as at
April 01, 2016 as deemed cost in accordance with the stipulation of Ind AS 101 “First-time Adoption of Indian Accounting
Standards”. Accordingly, the Company has not revalued its Property, Plant and Equipment, during the year.
42.3 LOANS OR ADVANCES TO SpECIFIED pERSONS
The following disclosures are made in respect of Loans and advances in the nature of loans granted to promoters, directors,
KMP's and the related parties (as defined under Companies Act, 2013) either severally or jointly with any other person, that
are:
42.10 UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM
The Company has not advanced or loaned to or invested (either from borrowed funds or share premium or any other sources
or kind of funds) 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, whether, 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 on behalf of the Ultimate Beneficiaries.
The company has not received any funds from any person(s) or entity(ies), including foreign entities (“Funding Parties”),
with the understanding, whether recorded in writing or otherwise, that the company shall, whether, 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.
42.11 UNDISCLOSED INCOME
The Company did not have any transactions that were not recorded in the books of account and that have been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
42.12 CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a CSR Committee and has adopted a CSR Policy and the same is available in the Company's
website www.sakthisugars.com. The composition of the CSR Committee is given in the Corporate Governance Report. As
the Company has incurred loss for the three preceding financial years, the requirement of incurring expenditure towards
fulfilment of its corporate social responsibility does not arise during the financial year under review..
42.13 DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43 SUBSEQUENT EVENTS
There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed
in the relevant notes.
48 EMPLOYEE BENEFITS
A. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which
are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a
specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.248.74 lakhs (Rs.244.62
lakhs) for Provident Fund contributions, Rs.48.26 lakhs (Rs.54.48 lakhs) for Superannuation Fund contributions and
Rs.1.40 lakhs (Rs.1.06 lakhs) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss
for the year ended March 31, 2025. The contributions payable to these plans by the Company are at rates specified in
the rules of the schemes.
B. defined benefit plans :
(i) 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 at March 31, 2025 by Mr. Srinivasan Nagasubramanian, Fellow of the Institute of
Actuaries of India. 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 a fund managed by the Life Insurance Corporation of India
(LIC).
The Company is exposed to various risks in providing the above gratuity benefit which are as follows:
Interest rate risk : The plan exposes the Company to the risk of fall in interest rates. 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 liability
(as shown in financial statements).
Investment risk : The probability or likelihood of occurrence of losses relating to the expected return on any particular
investment.
Salary Escalation risk : The present value of the defined benefit plan is calculated with the assumption of salary
increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from
the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
Demographic risk : The Company has used certain mortality and attrition assumptions in valuation of the liability. The
Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
The Company has invested the plan assets with the insurer managed funds. The insurance company has invested the
plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds, Money Market Instruments and Time
Deposits. The expected rate of return on plan asset is 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 discount rate, expected salary
increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of
the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results
of sensitivity analysis is given below:
The expected benefits/payouts are based on the same assumptions used to measure the Company's benefit obligations
as at March 31, 2025. The weighted average duration of the defined benefit plans is 10 years as applicable (Previous
Year: 10 years as applicable) for gratuity.
(ii) Long Term Compensated Absence
The Company is exposed to various risks in providing the above long term compensated absence benefit which are as
follows:
Interest rate risk : The plan exposes the Company to the risk of fall in interest rates. 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 liability
(as shown in financial statements).
Investment risk : The probability or likelihood of occurrence of losses relating to the expected return on any particular
investment.
Salary Escalation risk : The present value of the defined benefit plan is calculated with the assumption of salary increase
rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of
increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.
Demographic risk : The Company has used certain mortality and attrition assumptions in valuation of the liability. The
Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
50.4 Fair Value Measurements
The following table provides the fair value measurement hierarchy of the Company's Financial Asstes and Liabilities:
50.4.1 Quoted prices in an active market (Level 1)
This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active
markets for identical assets or liabilities. This category consists of investment in quoted equity shares, and mutual fund
investments.
50.4.2 Valuation techniques with observable inputs (Level 2)
This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices). This level of hierarchy includes Company's over-the-counter (OTC) derivative contracts.
50.4.3 Valuation techniques with significant unobservable inputs (Level 3)
Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and
liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are
determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from
observable current market transactions in the same instrument nor are they based on available market data.
50.4.7 Financial Instrument measured at Amortised Cost
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.
50.5 Financial Risk Management Objectives
The Company's Corporate finance department provides services to business, co-ordinates access to domestic and
international financial markets, monitors and manages the financial risks relating to the operations of the Company through
internal risk reports which analyse the exposures by degree and magnitude of risks. These risks include market risk (including
currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures.
The use of financial derivatives is governed by the Company's policies approved by the Board of Directors, which provide
written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative
financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed
by the Management and the internal auditors on a continuous basis. The Company does not enter into or trade financial
instruments, including derivatives for speculative purposes.
The Corporate Treasury function reports quarterly to the Company's risk management committee, an independent body that
monitors risks and policies implemented to mitigate risk exposures.
50.5.1 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 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.
50.5.2 Foreign Currency Exchange Rate Risk
The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any
transaction references more than one currency. The Company evaluates the impact of foreign exchange rate fluctuations by
assessing its exposure to exchange rate risks.
50.5.3 Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Company's receivables from customers and investment securities.
Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including
outstanding accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets.
The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit
quality of the counterparties, taking into account their financial position, past experience and other factors.
50.5.4 Credit risk management
The Company does not have significant credit risk exposure to any single counterparty. Concentration of credit risk related
to the Company did not exceed 10% of gross monetary assets at any time during the year. Concentration of credit risk to any
other counterparty did not exceed 10% of gross monetary assets at any time during the year.
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the customer, including the default risk of the industry and country in which the customer operates, also
has an influence on credit risk assessment.
50.5.5 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company
manages its liquidity risk through borrowings.
The Company's corporate treasury department is responsible for liquidity, funding as well as settlement management. In
addition, processes and policies related to such risks are overseen by senior management.
50.5.6 Foreign Currency Sensitivity Analysis
The Company is mainly exposed to the currency USD on account of outstanding trade receivables, trade payables and
FCCB in USD.
The following table details the Company's sensitivity to a 5% increase and decrease in INR against the USD. 5% is
the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents
management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5%
change in foreign currency rates. A positive number below indicates an increase in profit or equity where the INR strengthens
5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there would be a comparable
impact on the profit or equity, and the balances below would be negative.
54 The financial statements are approved for issue by the Audit Committee and the Board of Directors at their respective meetings
held on May 27, 2025.
55 The comparative figures have been regrouped, rearranged and reclassified wherever necessary to make them comparable
with current year's figures.
56 All figures are in lakhs unless otherwise stated and rounded off to the nearest two decimals.
Vide our report annexed
For P N RAGHAVENDRA RAO & Co
Chartered Accountants
Firm Registration Number : 003328S M MANICKAM M BALASUBRAMANIAM
p r vittel Chairman and Managing Director Managing Director
Partner
Membership Number : 018111
S VELUSWAMY S VENKATESH
Coimbatore President (Finance & Operations) Company Secretary
27th May 2025 Chief Financial Officer
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