A. Measurement of fair values
The fair value of the sugarcane and other agriculture products at harvest is determined by the quantities harvested, it is valued at the rate fixed by the Uttar Pradesh Government (Level 1). The fair value of the harvested sugarcane is the cost of the raw material used in the production of sugar including captive consumption. For biological assets, where
little biological transformation has taken place since the initial cost was incurred (for example seedlings planted immediately before the balance sheet date), such biological assets are measured at cost i.e. the total expenses incurred on such plantation upto the balance sheet date (Level 3).
B. Risk management strategy related to agricultural activities
The Company is exposed to a number of risks related to its sugarcane plantations.
i. Regulatory and environmental risks
The Company has established environmental policies and procedures, aimed for compliance, with local environmental and other laws.
ii. Supply and demand risk
The Company is exposed to risks arising from fluctuations in the sale price and quantity of sugarcane produced. When possible the Company manages this risk by aligning its harvest volume to market supply and demand.
iii. Climate and other risks
The Company's sugar cane plantations are exposed to the risk of damage from climatic changes, diseases, forest fires and other natural forces. The Company has extensive processes in place aimed at monitoring and mitigating those risks.
(a) No debt is due from directors or other officers of the Company or any of them either severally or jointly with any other person or no debt due from firms including limited liability partnerships (LLPs) or private limited companies respectively in which any director is a partner, a director or a member.
(b) Information about the Company's exposure to credit risks and loss allowances related to trade receivables are disclosed in Note 43(C).
(b) Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares with par value of H10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company's residual assets on winding up. The equity shareholders are entitled to receive dividend as declared by the Company from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.
(ii) Nature of security
(a) Term loan / Rupee term loans of H38,518.72 lakhs (31 March 2024: H37.241.58 lakhs) are secured by first mortgage / charge created / to be created on all the property, plant and equipment of the Company, both present and future, ranking pari-passu amongst the various lenders.
(b) Term loan of H1,186.36 lakhs (31 March 2024: H3,548.70 lakhs) under the scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity (SEFASM 2018 -Central) is entitled for interest subvention from the Government of India upto 6% p.a. or 50% of rate of interest charged by banks as per terms of the scheme. [Note 42]
(c) Cash credit borrowing including Working capital demand loan (WCDL) from banks are secured by hypothecation of all current assets of the Company ranking pari-passu amongst the various lenders and also by 3rd charge on all the property, plant and equipment of the Company, both present and future.
(a) Certain Inventories in the stock statements / returns submitted to lenders are computed on different methodology as specified in the sanction letter, while the inventories recorded in the books of accounts is valued according to the established accounting policy.
(b) Certain inventories are not reported in stock statements/ returns as per the terms and conditions specified in the sanction letter.
(c) Trade receivables has not been reported as part of quarterly returns / statements.
20. Lease As Lessee
The Company has lease contracts for various items of land, buildings (including godowns), vehicles and other equipment used it its operations. The Company's obligation under its lease are secured by lessor's title to the leased assets.
The Company also has certain leases of godowns and vehicles with lease term of twelve months or less and leases of office equipment with low value. The Company applies the 'short-term lease' and 'lease of low-value assets' recognition exemptions for these leases.
Defined benefits - Gratuity Plan
The Company has a defined benefit gratuity plan. Every employee who has completed continuously at least five years or more of service is entitled to Gratuity on terms as per the provisions of The Payment of Gratuity Act, 1972. The approved gratuity fund of erstwhile companies in respect of transferred business undertakings has been transferred to the Company and which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liabilities.
These defined benefit plans expose the Company to actuarial risks, such as interest risk and market (investment) risk. The Company expects to contribute H370.63 lakhs to Gratuity Fund in the next year.
Inherent risk
The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular, this exposes the Company, to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.
The following tables analyse present value of defined benefit obligations, fair value of defined plan assets, actuarial gain / (loss) on plan assets, expense recognised in the Statement of Profit and Loss and Other Comprehensive Income, actuarial assumptions and other information:
a) The Company presented disaggregated revenue based on the type of goods sold to customers and type of customers. Further, the Company's sales are made within India including export through third party and revenue is recognised for goods transferred at a point in time. The Company's performance obligations are satisfied on delivery of goods to the customer. Delivery of goods completes when the goods have been dispatched or delivered to the specific location, of the customer, as the case may be.
The Company does not have any contracts where the period between the transfer of the promised goods to the customer and payments by the customer exceeds one year and hence, there are no significant financing component included in such contracts.
The Company believes that the above disaggregation depicts the nature, amount, timing and uncertainty of revenues and cash flows effected by industry, market and other economic factors.
b) For Contract balances i.e. trade receivables [Note 10] and advance from customers [Note 23].
c) The amount of H429.52 lakhs included in contract liabilities [Note 23] at 31 March 2024 has been recognised as revenue during the year ended 31 March 2025 (31 March 2024: H472.61 lakhs).
d) The amount of revenue from contracts with customers recognised in the statement of profit and loss is the contracted price.
36. Capital and Other Commitments
Estimated amount of contracts remaining to be executed and not provided for (net of advances) H4,717.91 lakhs (31 March 2024: H4,912.67 lakhs) including H3,633.64 lakhs (31 March 2024: H4,276.23 lakhs) related to Property, Plant and Equipment.
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37. Contingent Liabilities (to the extent not provided for)
Claims against the Company not acknowledged as debt (h n lakhs)
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As at
31 March 2025
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As at
31 March 2024
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(i) Excise duty and service tax
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171.88
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171.88
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(ii) Sugarcane Society Commission pertaining to Sugar Season 2012-13, 2014-15 and partly for 2015-16
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3,962.76
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3,962.76
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(iii) Sales tax
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192.20
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192.20
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(iv) Duty under state acts
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448.87
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448.87
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(v) Others
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54.53
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37.84
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Total *
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4,830.24
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4,813.55
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* Notes:
(1) Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments / decisions pending with various forums / authorities.
(2) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
(3) In case of Excise duty and service tax, amount does not include H53.33 lakhs (31 March 2024: H171.57 lakhs) and H122.62 lakhs (31 March 2024: H120.23 lakhs) in respect of Show Cause Notices and Remanded Cases to original adjudicating authority respectively pertaining to earlier years.
38. Regulatory fee @ H20 per quintals of molasses sales / inter-unit transfers imposed by the State Government of Uttar Pradesh w.e.f. 24 December 2021 has been accounted for. The matter is sub-judice.
40. Operating Segments
A. Basis for segmentation
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company's other components, and for which discrete financial information is available. ALL operating segments and its operating results are reviewed regularly by the Company's Whole-Time Director (WTD) as the Company's Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance.
B. Information about reportable segments
Information related to each reportable segment is set-out below. The Company's WTD reviews the results of each segment on a quarterly basis. The Company's WTD uses Earning Before Interest and Tax (EBITA) to assess the performance of the operating segments. Segment is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within same industries. Inter-segment pricing is determined on an arm's length basis.
The Company has common property, plant and equipment for producing goods for Indian and Overseas markets. Hence, no separate figures for property, plant and equipment / additions to property, plant and equipment / depreciation and amortisation on property, plant and equipment have been furnished.
* including through third parties.
D. Major customer
During the year, no customer contributed more than 10% of total revenue of the Company (31 March 2024: One Customer contributed 10.43%).
C. Details of loans, investments and guarantee covered under Section 186(4) of the Companies Act, 2013
(i) The Company has neither given any loan nor has advanced any amount either during the year ended 31 March 2025 or year ended 31 March 2024.
(ii) Particulars of investments as required under Section 186(4) of the Companies Act, 2013 have been disclosed in Note 7.
D. Terms and conditions of transactions with related parties
(i) The transactions with related parties have been entered at an amount which are not materially different from those on normal commercial terms.
(ii) The amounts outstanding are unsecured and will be settled in cash and cash equivalent. Neither guarantees have been given nor received.
(iii) For the year ended 31 March 2025, the Company has not recorded any impairment of receivables relating to amounts owed by the related parties. This assessment is undertaken in each financial year through examining the financial position of the related parties and the market in which the related party operates.
(iv) The remuneration of directors is determined by the Nomination & Remuneration Committee having regard to the performance of individuals and market trends.
42. Government Grants
The Company is eligible to receive various government grants by way of remission of society commission and interest subvention / grant on certain term loans. Accordingly, the Company has recognised these government grants in the following manner:
(a) As per U.P Sugarcane (Regulation on Supply and Purchase) Act, 1953 and its Rules 1954, society commission is payable on sugarcane purchased at the rate of three percent of Fair and Remunerative Price (F.R.P) fixed by the Government of India. However, the same was reduced by the Government of Uttar Pradesh for the sugar season 2022-23, 2023-24 and 2024-25 by H3.65, H3.95 and H 4.70 per quintal of sugarcane purchased respectively. The above reduction in society commission applicable on sugarcane purchased during the periods has been netted with the Cost of Raw Material Consumed.
On 25 February 2025, the Government of Bihar notified a reduction in the rate of cane commission to Zonal Development Council from 1.80% to 0.20% of cane price for the sugar season 2022-23 and 2023-24. Based on this notification, the reduction in cane commission liabilities provided is reversed and accounted for as "Cane Commission Remission" during the year.
(b) The Company has obtained certain term loans from banks under financial assistance schemes SEFASU 2018 by the State Government of Uttar Pradesh at below market rate of interest and SEFASM 2018 by the Central Government of India at subvention of interest. The difference between the fair value of the loans based on prevailing market interest rates and interest paid on such loans has been recognised in the Statement of Profit and Loss by netting with the related finance cost. Accordingly, in case of SEFASU 2018, deferred income on government grant recognised initially is being derecognised by netting with related finance cost systematically over the tenure of the respective loan under finance assistance scheme. The loan is subsequently measured as per accounting policy applicable to financial liabilities.
There has been no transfer between level 1 and level 2 during the period.
The management assessed that fair values of trade receivables, cash and cash equivalent, other bank balances, trade payable, loans and other financial assets and liabilities approximate their carrying amounts.
B. Measurement of fair values
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in forced or liquidation sale.
Valuation technique
Level 1 - Investment in equity instruments (Quoted)
The fair value of the quoted investments are based on market price at the respective reporting date.
Investments in quoted equity instruments, which are classified as FVOCI are based on market price at the respective reporting date.
Level 2 - Borrowings
Discounted cash flows: The valuation model considers the present value of expected payments, discounted using a risk-adjusted discount rate. The own non-performance risk was assessed to be insignificant.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
(i) Credit risk
(ii) Liquidity risk
(iii) Market risk
Risk management framework
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 Company's operations. The Company's principal financial assets include trade receivables, cash and cash equivalents, other bank balances, investments, loans and other financial assets that derive directly from its operations.
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework.
The Company's Risk Management Committee monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
The Company's primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company's risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company's activities.
(i) Credit risk
Credit risk is the risk of financial loss of the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company receivables from customers and loans. The Company has no significant concentration of credit risk with any counterparty. The carrying amount of financial assets represent the maximum credit risk exposure. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Trade receivables, Loans, Claims and Subsidies / Refunds and Other receivables
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 also has an influence on credit risk assessment. Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers. Outstanding receivables and the credit worthiness of its counter parties are periodically monitored and taken up on case to case basis. There is no material expected credit loss based on the past experience. However, the Company assesses the impairment of trade receivables on case to case basis and has accordingly created loss allowance on trade receivables.
Exposure to credit risks
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry. The Company evaluates the concentration of risk with respect to trade receivables as low, as the Company sugar sales are mostly on cash. Power and Ethanol are sold to Government entities, thereby the credit default risk is significantly mitigated.
Trade receivables are primarily unsecured and are derived from revenue earned from customers. Credit risk is managed through credit approvals, establishing credit limits and by continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. As per simplified approach, the Company makes provision of expected credit loss on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provisions at each reporting date whenever is for longer period and involves higher risk. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain.
The Company's management also pursue all legal option for recovery of dues, wherever necessary based on its internal assessment.
(ii) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. Processes and policies related to such risks are overseen by senior management. Management monitors the Company's liquidity position through rolling forecasts on the basis of expected cash flows.
As disclosed in Note 19, the Company has secured bank loans that contains covenant. Any future breach of covenant may require the Company to repay the loan earlier than indicated in the table mentioned in risk management framework above. The covenant is monitored on a regular basis by the treasury department and regularly reported to management to ensure compliance with the agreement.
The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.
(iii) Market risk
Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, regulatory changes, equity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.
Foreign currency risks
All transactions of the Company are in Indian currency, consequently Company is not exposed to foreign currency risk. The Company has no outstanding foreign currency exposure or related derivative contract.
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 rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company's long term and short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.
The Company's main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.
Currently the Company's borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.
Cash flow sensitivity analysis
Fixed rate instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of sensitive analysis.
Equity risk
The Company's quoted equity instruments are susceptible to market price risk arising from uncertainties about future values of the investment securities. The reports on the equity portfolio are submitted to the Company's senior management on a regular basis. The senior management reviews and approves all equity investment decisions.
Sensitivity analysis
Investment in equity instruments of the Company are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The table below summaries the impact of increase / decrease of the quoted price
of equity instruments on the Company's equity and profit for the year. The analysis is based on the assumption that the quoted price of equity instruments had increased / decreased by 10% with all other variables held constant:
Sugar industry, being cyclical in nature, is regulated by both Central Government as well as State Government policies. The Company is exposed to the risk of price fluctuations of its raw material (Sugarcane) as well as its finished goods (Sugar). To counter the raw material risk, the Company worked with development of various cane varieties with the objective to moderate the raw material cost and increase product functionality. The risk towards finished goods (Sugar) has been moderated through the various schemes of the Central Government including but not limited to introduction of Minimum Support Price (MSP), creation of buffer stock and export of excess inventory. The Company has further mitigated this risk by well integrated business model by diversifying into co-generation and distillation, thereby utilising its by-products.
44. Capital management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The management monitors the return on capital, as well as the level of dividends to equity shareholders.
The Company's objective when managing capital are to:
(a) to maximise shareholders value and provide benefits to other stakeholders, and
(b) maintain an optimal capital structure to reduce the cost of capital.
In order to achieve this overall objective, 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.
For the purpose of the Company's capital management, capital includes issued equity share capital and other equity reserves attributable to the equity holders.
The Company monitors capital using debt-equity ratio, which is disclosed in Note 46.
45 . The company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the software except that the audit trail feature is not enabled at the database level. The Company did not come across any instance of audit trail feature being tampered with in respect of this software.
Additionally, the audit trail of relevant prior year has been preserved by the Company as per the statutory requirements for record retention, to the extent it was enabled and recorded in the respective year.
With respect to Cane Purchase Software and Payroll Software, the audit trail feature is not mentioned in Service Organisation Controls Report (SOC Report) of Software Service Provider.
47 . 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. 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 Company 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.
48. Recent accounting pronouncement
There are no standards that are notified and yet to be effective as on the date.
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