Annual Report 2015 - 2016 - Sri Sarvaraya Sugars Ltd

Annual Report

2015 - 2016

Sri Sarvaraya Sugars Limited

Registered Office: 12, Ethiraj Salai, Egmore, Chennai 600 008

Board of Directors:

Dr. N.R. Sivaswamy

Dr. B.B. Ramaiah

Sri. M. Narasimha Rao

Dr. K. Mohan Naidu

Sri. M. Subbarayudu

Smt. Usha Sarvarayalu

Sri. S.B.P.V.C. Sanjay

Smt. S.B. Rajarajeswaramma (Managing Director)

Dr. S.B.P.P. Rammohan (Joint Managing Director)

Sri. S.B.P.S. Krishna Mohan (Joint Managing Director)

Sri. S.B.P. Madan Mohan (Executive Director)

Sri. S.B.P. Anand Mohan (Executive Director)

Audit Committee Nomination & Remuneration Committee

Dr. N.R. Sivaswamy Dr. N.R. Sivaswamy

Sri. M. Narasimha Rao Dr. B.B. Ramaiah

Sri. M. Subbarayudu Sri. M. Narasimha Rao

Stakeholders Relationship Committee CSR Committee

Smt. S.B. Rajarajeswaramma Sri. M. Narasimha Rao

Sri. M. Subbarayudu Sri. S.B.P. Madan Mohan

Sri. M. Narasimha Rao Smt. Usha Sarvarayalu

Sri. S.B.P. Anand Mohan

Sr. General Manager Legal Adviser

Sri. G. Koteswara Rao Sri. A.K. Mylsamy, Chennai

Auditors Cost Auditor

Brahmayya & Co. Narasimha Murthy & Co.

Chartered Accountants Cost Accountants

Vijayawada Hyderabad

Bankers:

Bank of Baroda, Kakinada, Ramachandrapuram, Chelluru, Rajahmundry, Chennai

Indian Bank, Kakinada, Chennai

Central Bank of India Rajahmundry

State Bank of India, Commercial Branch, Kakinada

Andhra Bank, Kakinada

Bank of India, Visakapatnam

Standard Chartered Bank, Hyderabad


CONTENTS

Directors’ Report ..................................................................... 1

Independent Auditors’ Report .................................................. 28

Balance Sheet ......................................................................... 34

Statement of Profit & Loss ...................................................... 35

Notes ....................................................................................... 36

Cash Flow Statement ............................................................. 61


1

Registered Office: No.12, Ethiraj Salai, Egmore, Chennai 600 008

DIRECTORS’ REPORT

To The Members

Your Directors have pleasure in presenting the Fifty Eighth Annual Report and Audited Accounts of the Company for the

financial year ended 31st March, 2016.

Financial Results: 31st March 2016 31st March 2015`̀̀̀̀ (lakhs) `̀̀̀̀ (lakhs)

Gross Profit for the year (before providing for Interest,

Depreciation, Taxes and Extra-ordinary Items) 9078.52 10028.30

Less: Interest & Finance Charges 2774.20 4220.18

Depreciation 2726.57 3019.06

Profit before Tax and Extra-ordinary Items 3577.75 2789.06

Less: Extra-ordinary Items

Cenvat Credit claimed on purchase of Molasses in earlier years (594.06) —

Amount paid towards Voluntary Retirement Scheme 254.86 —

Profit before Tax 3916.95 2789.06

Less: Tax Expense:

Current Tax for the year 1265.42 1177.12

Deferred Tax Liability (40.12) (173.35)

MAT Credit entitlement — (108.18)

Net Profit for the Year 2691.65 1893.47

Add: Surplus at the beginning of the Year 4373.00 2961.81

Total Surplus 7064.65 4855.28

Appropriations:

1. Transfer to General Reserve 900.00 360.00

2. Proposed Dividend 152.40 101.60

3. Tax on Proposed Dividend 31.02 20.68

4. Adjustment of carrying amount of Fixed Assets

whose remaining life is exhausted as per Schedule II to

Companies Act, 2013 (Net of Deferred Tax) 246.24 —

Surplus at the end of the Year 5734.99 4373.00

Note: There were no material changes and commitments affecting the financial position of the Company between the end

of the financial year and the date of this Report.

Dividend:

The Board, in its meeting held on May 26, 2016 has recommended a final dividend of `15.00 per Equity share of `10/- for

the financial year ended 31stMarch 2016. The proposal is subject to the approval of Shareholders at the ensuing Annual

General Meeting to be held on September 15, 2016. The total dividend appropriation (excluding dividend tax) for the

Current year is `152.40 as against `101.60 in the previous year.

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The Register of Members and Share Transfer Books will remain closed on September 5, 2016 for the purpose of payment

of Final Dividend for the Financial Year ended 31stMarch 2016.

Transfer to Reserves:

We propose to transfer `900 Lakhs to the General Reserve for the year ended 31st March, 2016 on account of declaration

of dividend. An amount of `1361.99 Lakhs is proposed to be retained in the surplus.

Fixed Deposits:

During the year, the Company accepted deposits of `472 Lakhs and repaid `218Lakhs. As on 31.3.2016, deposit of `1.66

Lakhs was matured and unclaimed. Deposits of `623 Lakhs are outstanding as on 31.3.2016 including unclaimed deposit.

There have been no defaults in repayment of deposits or payment of interest.

The Circular in Form DPT-1 inviting / accepting unsecured deposits from shareholders along with the rating assigned for our

Fixed Deposit Program is annexed.

Review of Operations:

During the financial year 2015-16, the Company posted an improved performance mainly from Beverages, Packaged

Drinking Water, Industrial Alcohol and Co-Gen Operations.

The business of your Company falls under two segments, Sugar and Beverage Segments.

Sugar Industry:

The Sugar industry continues to be under stress; however, there are signs of recovery after passing through tough times on

account of continuous surplus production in the country for the last 4 years. The production during 2015-16 seasons is

estimated at 25 million tons and the total sugar available in the country would be 32 million tones including 7 million tons

of carry forward stock. The domestic consumption in the country is approximately 23 to 24 million tons. Sugar prices have

moved up since March and there has been an increase of `500/-per quintal.

Recent Production trends indicate a shortfall of sugar in 2016-17 season and expect a slight upward trend in international

markets. Export obligation earlier announced by the Central Government was withdrawn and stockholding limits imposed

in May 2016. Since the sugar prices are on an upward trend, sugar factories are now able to break even. The Sugar

industry is still under considerable stress for clearing their cane dues. Banks are reluctant to enhance Working Capital and

are also not coming forward to restructure existing loans.

The sugar mills in the country have been facing considerable hardship during the last few years due to Government policies

and excess production. The Central Government had earlier announced a production incentive of `45/-per MT of Cane to be

paid directly to the farmers, subject to the factory exporting 80% of sugar quantity allotted to them and 80 % on agreed

quantity of Ethanol to be supplied to OMCs. However, due to an increase in domestic sugar prices, the Central Government

had withdrawn the export obligation and there by production incentive of `45/- per MT of cane.

Ethanol Blending Program:

The Central Government is very keen on implementing the 10% Ethanol Blending program and announced procurement of

Ethanol at a pre-determined price based on distance from Factory to OMC Depot. Waiver of Excise Duty on Ethanol

supplied to OMCs, manufactured out of molasses produced during 2015-16 season was also announced by the Central

Government. This blending program has been helpful to Ethanol manufacturers and also the Sugar industry. Molasses

available in India is insufficient to produce Ethanol to cater to the needs of OMCs, thereby resulting in Molasses prices

increasing.

Since Sugar factories have been facing hardship during the last few years, they are unable to pay cane payments to the

farmers on time, thereby drastically affecting the acreage under sugar cane cultivation. Farmers have resorted to diversification

to other crops in Andhra Pradesh and Telangana. In Karnataka, Maharashtra and Tamil Nadu there has been severe

drought for the last two years. This year plantation has been good in the states of Uttar Pradesh and Maharashtra. The

preliminary production estimates for the ensuing season is expected to be 23 to 24 million tons. As a result of reduced

availability of sugarcane in Andhra Pradesh, sugar factories are expected to crush only 60 to 70 lakh tons of cane during

the ensuing 2016-17 season.

Sugar prices are currently stable around `3,500/- per quintal for the past three months. Factories are however unable to

clear their total cane dues, as the banking sector is unwilling to extend working capital to the sugar mills. With increase

in cost of production of sugar due to fixation of higher cane price, the sugar industry is facing perennial liquidity problems

leading to mounting cane payment arrears. The Central Government during the last two years had extended interest free


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loans, but has withdrawn the production incentive of `45/- per MT of cane, which they had announced for the season

2015-16. The only incentive for the season is better Ethanol price when supplied to OMCs and waiver of Excise Duty on

Ethanol when supplied to OMCs.

The Central Government had recently increased the cess on sugar by `100/- per quintal. This increase is affecting the net

realization. Sugar being an essential commodity, every effort has been made by the Government to control the price of

sugar and is now even considering a reduction in import duty on Sugar from 40% to 20%in order to reduce the domestic

sugar prices.

Performance of Business Segments:

Sugar Division:

For the financial year 2015-16, 1.71 lakh tons of Sugarcane (previous season 2.12 Lakh tons) were crushed. The Sugar

recovery was 9.63% for the current season (previous season 9.58%). 1.65 Lakh quintals of sugar were produced for the

year 2015-16 (previous season 2.03 Lakh quintals). For the 2016-17 crushing season, about 1.20 Lakh Tons of cane is

expected to be available.

Distillery Division:

During the financial year 2015-16, 0.94 Lakh Bulk Liters of Rectified Spirit and 89.06 Lakh Bulk Liters of Ethanol were

produced, as against 13.55 Lakh Bulk Liters of Rectified Spirit and 113.66 Lakh Bulk Liters of Ethanol during the previous

financial year ended 31st March, 2015 (18 months period).11.35 Lakh Kgs. of Liquefied CO2 was produced during the year

under review, as against 31.40 Lakh Kgs. during the previous 18 months period.

Co-Generation Plant:

During the financial year 2015-16, the Company exported 684.47 Lakh units of Power to the APTRANSCO Grid as against

1022.56 Lakh units during the previous financial year (18 months period).

Beverage Division:

The Vemagiri and Kesavaram Units sold 115.44 Lakh cases of Carbonated and Non-Carbonated Soft Drinks during the

financial year 2015-16as against 149.63Lakh cases during the previous financial year (18 months period). Kesavaram Unit

sold 37.38 Lakh cases of Carbonated Soft Drinks in PET Bottles during financial year 2015-16 as against 49.50 Lakh

cases during the previous financial year (18 months period). The Greenfield Bottling Plant at Gopalapuram, West Godavari

District, Andhra Pradesh is under construction and is expected to commence Commercial production in December 2016.

Packaged Drinking Water:

The Sathupally Unit sold 24.20 Lakh cases of Packaged Drinking Water during the financial year 2015-2016, as against

35.62 Lakh cases during the previous financial year (18 months period).

Awards and Recognition:

Sugar Division:

“Best Distillery Award” – Platinum Award (Andhra Pradesh) for 2015-2016 Season, from The South Indian Sugarcane and

Sugar Technologists Association

Beverage Division:

Awards received from Coca-Cola India:

• HR Award 2015

• Quality Excellence Award H1 2015

• “RED” Bottler of the Year 2015

• Top Performing Unit H2 2015

• Drona Award 2015 (Annual Training Excellence)

“Best Management Award” for the Vemagiri Bottling Unit, from Andhra Pradesh State Government in recognition of excellence

in Industrial Relations, increase in productivity, Employee Welfare and Sustainability Initiatives and Community Development

Programs.

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Composition of Board:

The Board of Directors consists of eminent individuals drawn from Management, Technical, Agriculture and Financial fields.

The Board has an adequate combination of executive and non-executive Independent Directors.

The composition of Board of Directors meets with the requirement of the Companies Act, 2013.

Category Name of Director

Promoter/Non-Executive Director Smt. Usha Sarvarayalu

Sri. S.B.P.V.C. Sanjay

Promoter/Executive Director Smt. S.B. Rajarajeswaramma, Managing Director

Dr. S.B.P.P. Rammohan, Joint Managing Director

Sri. S.B.P.S. Krishna Mohan, Joint Managing Director

Sri. S.B.P. Madan Mohan, Executive Director

Sri. S.B.P. Anand Mohan, Executive Director

Independent and Non-Executive Director Dr. N.R. Sivaswamy

Dr. B.B. Ramaiah

Dr. K. Mohan Naidu

Sri. M. Narasimha Rao

Sri. M. Subbarayudu

As required under Section 149 of the Companies Act, 2013, Smt.S.B.Rajarajeswaramma, Managing Director and Smt.Usha

Sarvarayalu, Director are Women Directors on the Board of the Company. There is no change in the composition of the

Board during the financial year 2015-16.

Number of Meetings of the Board

Number of Board Meetings held for the year ended on 31.03.2016:

Sl. No. Date of Board Meeting

1. 08.05.2015

2. 25.06.2015

3. 27.07.2015

4. 24.09.2015

5. 26.11.2015

6. 15.02.2016

The Meetings of the Board were held periodically and 120 days has not lapsed between two meetings as prescribed under

section 173(1) of the Companies Act, 2013.

Directors:

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Articles of Association of the

Company, Smt.Usha Sarvarayalu and Sri.S.B.P.V.C.Sanjay, Directors, retire by rotation and being eligible, offer themselves

for re-appointment.

Dr.S.B.P.P.Rammohan (DIN:00586641) and Sri.S.B.P.S.Krishna Mohan (DIN:00806989) who were appointed as Joint

Managing Directors by the Shareholders of the Company at the AGM held on 27-03-2014 and who are eligible, have been

re-appointed as Joint Managing Director of the Company at the Meeting of the Board held on May 26, 2016, based on the

recommendation of the Nomination and Remuneration Committee.

Sri.S.B.P.Madan Mohan (DIN:06592268) and Sri.S.B.P.Anand Mohan (DIN:01195434) who were appointed as Executive

Directors by the Shareholders of the Company at the AGM held on 27-03-2014 and who are eligible, have been


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re-appointed as Executive Directors of the Company at the Meeting of the Board held on May 26, 2016, based on the

recommendation of the Nomination and Remuneration Committee.

The Board recommends their appointment at the ensuing AGM and accordingly resolutions seeking approval of the members

for their appointment have been included in the Notice of the forthcoming Annual General Meeting of the Company.

Declaration by Independent Directors:

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of

independence as prescribed under section 149 of the Companies Act, 2013.

Remuneration to Directors:

Disclosure u/s 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration

of Managerial Personnel) Rules, 2014 are not applicable, as the Company is no longer a listed entity owing to the voluntary

de-recognition of the Madras Stock Exchange.

Committees of the Board:

With a view to have more focused attention on various business aspects and better accountability the Board has constituted

the following Committees, viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility

Committee and Stakeholders Relationship Committee.

The Board Committees meet at regular intervals; take necessary steps to perform their duties entrusted by the Board.

Audit Committee:

As required under section 177(8), the Audit Committee comprises of 3 Non-Executive Independent Directors. The Committee

was chaired by a Non-Executive Independent Director, Dr.N.R.Sivaswamy with requisite qualification. In the opinion of the

Board of Directors, all the members of Audit Committee are financially literate and also have accounting or related financial

management experience.

The Audit Committee monitors and provides effective observation of the financial control and reporting process, review the

financial reporting process, internal audit process, adequacy of internal control systems, review of performance of Statutory

Auditors, recommending appointment of Statutory, Internal Auditors and Cost Auditors, recommending the Audit fees and

Cost Audit fees and also payment for other services.

The composition of the Audit Committee and particulars of meetings attended by the members of Audit Committee are

given below:

Name of the Director No. of Meetings held No. of Meetings attended

Dr. N.R.Sivaswamy 4 4

Sri.M.Subbarayudu 4 1

Sri.M.Narasimha Rao 4 4

During the year ended on 31.03.2016, 4 meetings of the Audit Committee were held on 25.06.2015, 24.09.2015, 26.11.2015

and 15.02.2016. The Chairman of the Audit Committee has the accounting or related financial management expertise.

Whole-Time Directors, Statutory Auditors, Internal Auditor and Cost Auditor have also attended the Audit Committee

meetings when invited by the Committee.

The Audit Committee reviewed the quarterly, half-yearly and annual financial statements of the Company before submission

to the Board of Directors. The Committee also reviewed Internal Audit Reports, related party transactions, etc., from time

to time. It has also taken on record the appointment of Statutory Auditors, Internal Auditors and Cost Auditors and

recommended to the Board the remuneration payable to them.

Key Managerial Personnel (‘KMP’):

Consequent to voluntary de-recognition of Madras Stock Exchange Ltd., by SEBI on 26.05.2014, our Company ceased to

be a Listed Company. Further, as the paid up share capital of the Company is less than prescribed limit of `10 Crores, the

provisions of Section 203 of the Companies Act, 2013 do not apply.

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The day-to-day management of the Company rests with the Managing Director assisted by Joint Managing Directors and

Executive Directors.

Registrar and Transfer Agents:

There is no Registrar and Transfer Agent. The In-house Share Department of the Company handles matters relating to

Share Transfer and Transmission in physical form.

Share Transfer System:

The shares lodged in physical form with the Company are processed, registered and returned within a period of 30 days

from the date of receipt, if the documents are in order.

Corporate Social Responsibility Committee:

As per the Companies Act, 2013 all companies having a net worth of `500 Crores or more, or a turnover of `1,000 Crores

or more or a net profit of `5 Crores or more during any financial year are required to constitute a CSR Committee of the

Board of Directors comprising of 3 or more Directors, at least one of whom should be an Independent Director. All such

companies are required to spend at least 2% of the average net profits of the immediately preceding three financial years

on CSR – Related activities. Accordingly, the Company was required to spend `26,97,611/-towards CSR activities. The

Company has spent `32,49,357/-, which is in excess of the requirements under the Companies Act, 2013. The projects

currently undertaken by the Company are in the areas of Education, Environment, Public Welfare, Health and Women

Empowerment mostly covered within the ambit of Schedule VII of the Companies Act, 2013.

The Annual Report on our CSR activities are appended as ANNEXURE-II to the Board’s Report, under Section 149 (6) of

the Companies Act, 2013.

Disclosure under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,

2013:

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the

Company through various interventions and practices. The Company always endeavours to create and provide an environment

that is free from discrimination and harassment including sexual harassment.

The Company aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and

prevention of undesired behaviour. The Board of Directors are responsible for redressal of complaints related to sexual

harassment. Each of the Company’s Factories has constituted a Committee to address complaints regarding sexual

harassment. During the year ended 31stMarch 2016, the Committees did not receive any complaints pertaining to sexual

harassment.

Directors’ Responsibility Statement:

Pursuant to the provisions contained in the Section 134 (3) (c) of the Companies Act, 2013, the Board to the best of its

knowledge and belief and according to the information and explanation obtained by it confirm that:

a) in the preparation of the Annual Accounts, the applicable Accounting standards had been followed and there were no

material departures there from;

b) the Directors had selected such Accounting policies and applied them consistently and made judgments and estimates

that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the

12 months period ended on 31st March, 2016 and of the profit of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance

with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and

detecting fraud and other irregularities;

d) the Directors had prepared the Annual Accounts on a going concern basis;

e) they have laid down internal financial controls, which are adequate and are operating effectively;

f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems

are adequate and operating effectively.

Statutory Auditors:

M/s.Brahmayya & Co., Chartered Accountants, Vijayawada (Firm Registration No.000513S) were appointed as Auditors of

the Company at the 57th Annual General Meeting to hold office until the conclusion of the Annual General Meeting for the


7

financial year 2017-2018. In terms of Section 139 of the Companies Act, 2013, the appointment of the auditors shall be

placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s.Brahmayya & Co., Chartered

Accountants, as Statutory Auditors of the Company is placed for ratification by the shareholders.

The Auditor’s Report for the Year ended 31 March 2016 contains the following qualifications, in Item No.6 of the Auditors’

Report, and the explanation given in Note No.20 (A) is self-explanatory.

Secretarial Auditor:

The Board has appointed Lakshmmi Subramanian & Associates, Practicing Company Secretaries, Chennai as Secretarial

Auditor to undertake the Secretarial Audit of the Company for the year ended 31stMarch, 2016. The Report of the Secretarial

Auditors is provided in ANNEXURE-I to this Report.

The Secretarial Auditor’s Report for the Year ended 31stMarch 2016 contains no qualifications.

Related Party Transactions:

All related party transaction statements containing the nature and value, are placed at every meeting of the Audit Committee

and the Board for review and approval. All transactions with related parties entered during the period were in the ordinary

course of business and on an arm’s length basis. The value of such transactions is well within the threshold limits

prescribed under Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014. There are no materially

significant related party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel or

their relatives which may have a potential conflict with the interest of the Company.

Particulars of Contracts or arrangement with related parties referred to in Section 188(1) of the Companies Act, 2013, in the

prescribed Form AOC-2, is appended as ANNEXURE-IV to the Board’s Report.

Particulars of Loans, Guarantees or Investments:

During the period under review, the Company has not made loans and fresh investments or given guarantees or provided

securities to other bodies corporate under Section 186 of the Companies Act, 2013.

Risk Management:

Sugar Price Risk: In view of the domestic Sugar surplus, there could be a fall in sugar prices affecting profitability.

The Company has taken steps towards cost reduction measures. It proposes to optimize

production in distillery and co-generation of power. Lower sugar prices would however benefit the

Beverage Division, thus partially mitigating the impact of lower sugar prices on the Sugar Division.

Raw Material Availability: The quality and quantity of sugar cane is affected due to vagaries of weather. Further shrinkage

in sugar cane area under cultivation is causing concern. The Company is taking steps to educate

farmers with better cultivation techniques and by providing high yielding varieties of seeds and

saplings. The Beverage Division does not foresee any shortage of Raw Material.

Raw Material Pricing: Unviable fixation of cane price by Central and State Governments may impact profitability of

sugar division. Implementation of the recommendation of Dr.C.Rangarajan Committee’s linking

of sugar cane price to sugar sale price is the solution for survival of Sugar Industry. The Beverage

Division does not foresee any significant change in Raw Material prices.

Corporate Governance:

Your Company was a listed Company exclusively with The Madras Stock Exchange Limited, not listed with BSE or NSE.

Consequent to voluntary de-recognition as a Stock Exchange by Madras Stock Exchange Ltd., to SEBI on 26.05.2014, our

Company ceased to be a Listed Company with the Madras Stock Exchange. According to the intimation vide Madras

Stock Exchange letter dated 3rd December, 2014 our Company has been placed on the Dissemination Board of NSE. NSE

has allowed buying and selling of shares of our Company on the Dissemination Board with effect from 01.12.2014.

Shareholders have been informed of the Company being on the Dissemination Board separately. Therefore Clause 34 of the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015 is not applicable.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars relating to the Conservation of Energy, Technology Absorption, Research and Development, Foreign Exchange

earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies

(Accounts) Rules, 2014 are given in the ANNEXURE-III forming part of this Report.

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Details of Significant and Material Orders Passed by The Regulators or Courts or Tribunals Impacting the Going

Concern Status and Company’s Operations in Future:

During the year, there were no significant and material orders passed by Regulators or Courts or Tribunals which threaten

the going concern status of our Company.

Extract of Annual Return

The extract of the Annual Return in the prescribed Form MGT-9 is annexed to and forms part of this Report. Refer to

ANNEXURE-V.

Acknowledgement:

The Directors thank the various Departments of the Central and State Governments, Bank of Baroda, Indian Bank, Central

Bank of India, State Bank of India, Andhra Bank, Bank of India, IFCI Ltd., ICICI Bank Ltd., Standard Chartered Bank and

Sugar Development Fund for the support and cooperation extended throughout the year.

For and on behalf of the Board of Directors,

Dr. N.R. Sivaswamy

Chairman

30.06.2016


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ANNEXURE – I

SECRETARIAL AUDIT REPORT

FOR THE FINANCAL YEAR ENDED 31.03.2016[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9

of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To,

The Members,

Sri Sarvaraya Sugars Limited,

No. 12, Ethiraj Salai, Egmore,

Chennai - 600 008.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good

corporate practices by Sri Sarvaraya Sugars Limited(hereinafter called the company). Secretarial audit was conducted in

a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing

our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records

maintained by the company and also the information provided by the Company, its officers, agents and authorized

representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the

audit period covering the financial year ended on 31st March, 2016, complied with the statutory provisions listed hereunder

and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner

and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company

for the financial year ended on 31st March, 2016 according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made thereunder;

ii. Foreign Exchange Management Act 1999 and the Regulations Act By-laws framed there under to the extent of

Current Account transaction

iii. Other laws applicable specifically to the Company being a manufacturer of Sugar, Industrial Alcohol, Generation of

Power, Soft Drinks and Packaged Drinking Water, namely:

1. Sugar Cess Act 1982

2. Levy Sugar Price Equalisation Fund Act 1976

3. Essential Commodities Act 1995

4. Sugar Development Fund Act 1982

5. Export (Quality Control and Inspection)Act 1963

6. Food Safety and Standards Act 2006

7. Agricultural and Processed Food Products Export Act 1986

We have also examined the compliance with the applicable clause of the following:

i. Secretarial Standards with respect to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued

by the Institute of Company Secretaries of India applicable with effect from 1 July 2015.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,

Standards, etc. mentioned above also since it is the first year in which the Secretarial Standards are in force, a few

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improvements in certain areas of compliances which are not material pursuant to the SS-1 and SS-2 is required to be made

by the Company.

We further report that, based on the information provided and the representations made by the Company, its officers, in our

opinion, adequate systems and processes and control mechanism exist in the Company to monitor and ensure compliance

with applicable general laws viz., Industrial Laws including Factories Act, Environmental, Human Resources and labour

laws, wherever applicable.

We further report that:

The Board of Directors of the Company is well constituted with proper balance of Executive Directors, Non-Executive

Directors and Independent Directors. There were no changes in the composition of the Board of Directors during the period

under review.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were

delivered and a system exists for seeking and obtaining further information and clarifications on the agenda items before

the meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views, if any, are captured and recorded as part of the

minutes.

We further report that there are adequate systems and processes in the company commensurate with the size and

operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report, that the compliance by the Company of applicable financial laws, like Direct and Indirect tax laws, has

not been reviewed in this Audit since the same have been subject to review by Statutory Financial Auditor and other

designated professionals.

We further report that during the audit period no events have occurred, which have a major bearing on the Company’s

affairs.

For LAKSHMMI SUBRAMANIAN & ASSOCIATES

Sd/-

Lakshmmi Subramanian

Senior Partner

FCS No. 3534

Place: Chennai C.P.NO. 1087

Date: 22.06.2016

**Note: This report should be read with the letter of even date by the Secretarial Auditors attached herewith.


11

ANNEXURE – A

To,

The Members,


No. 12, Ethiraj Salai, Egmore,

Chennai - 600 008.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to

express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the

correctness of the contents of the secretarial records. The verification was done on the random test basis to ensure

that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed

provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations

and happening of events etc.,

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the

responsibility of the management. Our examination was limited to the verification of procedures on a random test

basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or

effectiveness with which the management has conducted the affairs of the Company.

For LAKSHMMI SUBRAMANIAN & ASSOCIATES

Sd/-

Lakshmmi Subramanian

Senior Partner

FCS No. 3534

C.P.NO. 1087

Place: Chennai

Date: 22.06.2016

12


ANNEXURE-II

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILTY (CSR) ACTIVITIES

1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken:

The Company has been giving back to Society even before the statutory requirement of CSR was introduced. It now

continues its past involvement with Education, Health, Environment and Rural Development. The Company’s CSR

Policy is to address the following:

i) Provision of access to basic necessities such as clean drinking water and sanitation to the underprivileged.

ii) Maintain environmental and ecological balance.

iii) Support education for the underprivileged.

iv) Support rural infrastructure development

2. Composition of the CSR Committee:

a) Sri. M. Narasimha Rao (Chairman)

b) Smt. Usha Sarvarayalu

c) Sri. S.B.P. Madan Mohan

3. Average Net Profit of the Company for last three financial years: ` 13,48,80,526.00

4. Prescribed CSR Expenditure (2% of amount in Item 3 above): ` 26,97,611.00

5. Details of CSR spent during the financial year:

(a) Total amount spent for the financial year: ` 32,49,357.00

(b) Amount unspent, if any: ` Nil

Manner in which the amount spent during the financial year is detailed below:

Amount Amount

spent on spent

S.No. CSR Project / Activity Activity Sector Location (`) Direct or

Project/ through

Activity Agency

1 Plants & Tree Guards Environment Vemagiri,

Andhra Pradesh 32,750 Direct

2 Notebooks for Primary Education Vemagiri & Kesavaram,School Students Andhra Pradesh 1,25,800 Direct

3 Notebooks for Primary Education Sathupally, Telangana 62,850 Direct

School Students

4 Sarvaraya Merit Award for Education Vemagiri & Kesavaram,10TH Class Students Andhra Pradesh 45,000 Direct

5 Sarvaraya Merit Award for Education Sathupally, Telangana 30,000 Direct

10TH Class Students

6 Providing Kinley Water to – Chennai, Tamil Nadu 2,27,060 Throughflood affected areas Agency

7 LED Street Lights Rural Development Vemagiri, Andhra Pradesh 8,08,250 Direct

8 LED Street Lights Rural Development Sathupally, Telengana 2,43,272 Direct


13

Amount Amount

spent on spent

S.No. CSR Project / Activity Activity Sector Location (`) Direct or

Project/ through

Activity Agency

9 Construction of individual Environment Kesavaram, Andhra Pradesh 10,08,380 Direct

Housing Toilets

10 School Infrastructure & Education Kesavaram, Andhra Pradesh 37,248 DirectClassroom Furniture

11 Village Water Tank Repairs Rural Development Raghavapuram,

Andhra Pradesh 32,588 Direct

12 Maintenance of R.O.Plant Rural Development Chelluru, Andhra Pradesh 3,159 Direct

13 Renovation of Village Library Rural Development Chelluru, Andhra Pradesh 3,16,000 Direct

14 Construction of compound Rural Development Chelluru, Andhra Pradesh 2,77,000 Direct

wall for Library, Garden, etc.

Total 32,49,357

6. The Company has spent more than 2% of the average net profits of the three preceding financial years and therefore is

in excess of the limits prescribed under Section 135(5) of the Companies Act, 2013.

7. The implementation and monitoring of CSR Policy, is in compliance with the CSR objectives and Policy of the Company.

M. Narasimha Rao Usha Sarvarayalu

(Chairman, CSR Committee) (Director)

14


ANNEXURE-III

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNINGS AND OUTGO

For the year For the

Particulars Units ended 18 months

31.03.2016 period ended

31.03.2015

A) POWER AND FUEL CONSUMPTION

1) ELECTRICITY

a) Purchased Units

Quantity Kwh 2,12,600 12,56,400

Cost per Unit* ` 49.01 11.21

Total Amount ` 1,04,20,322 1,40,83,228

b) Own Generation

i) Through Diesel Generator Kwh 2,992 4,656

Units per liter of Diesel Oil Kwh 3.74 3.16

Cost per unit ` 21.38 18.36

ii) Through Steam Turbine/Generator Kwh 8,65,56,400 13,98,45,288

Units per liter of Fuel Oil/ Fire Wood - -

Cost per Tonne of Bagasse per Unit ` 3.59 7.42

Power Transferred from Co-Gen Plant Units 58,98,270 1,67,56,100

2) COAL (Specify Quality & Where Used)

Quantity Tons 81,521 1,36,027

Total Cost ` 24,64,34,980 35,30,29,591

Average Cost ` 3,022.96 2,595.29

3) FURNACE OIL

Quantity Litres - -

Total Cost ` - -

Average Cost ` - -

4) OTHER / INTERNAL GENERATOR

Fire Wood

Quantity Tons - -

Total Cost ` - -

Average Cost ` - -

B) CONSUMPTION PER UNIT OF PRODUCTION OF SUGAR

Products Current PreviousYear Year

Electricity Kwh 36.67 30.98

Furnace Oil - -

Coal (Specify Quantity) - -

Others (Specify) - -

*Due to payment of minimum demand charges without consumption of electrical units the unit cost is not comparable.


15

FORM B(See Rule 2)

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLGY ABSORPTION,

ADAPTATION & INNOVATION

Technology Absorption, Adaption and Innovation:

As part of our Sugarcane R&D, we have undertaken the following to improve cane yield and sugar recovery:

1. Micro propagation (Tissue culture) coupled with Single bud seedlings production:

In order to supply healthy, pest and disease free sugarcane seedlings / setts and to standardize average yield and

recovery, we had produced 12,500 TC seedlings, developed through a series of nursery programs (Breeders andPrimary nurseries) and supplied 20,00,000 single bud sugarcane seedlings developed at our nursery production

facility. Of these, 6,00,000 seedlings were produced with the help of fully automated tray filling machine at ourproduction facility that was procured from abroad.

For the ensuing planting season 2016-17, we plan to develop and supply 1 crore sugarcane seedlings to our farmers

with the help of our automated machine. We are also planning to develop Vegetable seedlings for Intercropping insugarcane fields. By introducing intercropping, we are planning to economize sugarcane cultivation by enabling

interim income in a span of 2 to 3 months with the use of the same land.

2. Vesicular Arbuscular Mycorrhiza (VAM) Production & Supply:

VAM is a beneficial fungus that is associated with plant roots including sugarcane via a symbiotic association wherebyboth the host plant and the fungus benefit. The fungus once added to the soil reaches out and covers the root system

thus serving as an extension of the root and also penetrates the root to form minute structures in between the cellsfrom where the nutrients are exchanged with the plant cells.

The VAM symbiosis results in marked increase in crop growth and development, particularly sugarcane. They nourishthe plant by mobilizing the insoluble forms of nutrients like phosphorous from soil. The host plants obtain fertilizernutrients from the Mycorrhizal fungus while the fungus obtains some food material from the plant.

For 2015-16 planting season, we had supplied 4 MTs to our sugarcane growers and are also planning to supply it toother factory farmers and also to other nursery crops.

3. Soil Testing Laboratory (Quality Analysis / Analytical Lab):

For 2015-16 planting season we had analyzed 219 soil samples and 10 water samples taken from our cane area and

accordingly informed the results and recommendations to our field staff for further follow up action.

4. Mechanization of Sugarcane cultivation:

Proven motorized / tractor drawn implements were procured from different parts of the country to overcome theproblem of acute shortage of labour. We had procured Chisel plough, Reversible Mould Board plough, Rotary plough,

Ridgers of different types (based on soil type and plating technique), Sugarcane seedlings / Single bud planters,Earthing up equipment, Inter cultivation equipment, tractor drawn sprayer, Trash shredders and Ratoon mangers (Off

barring, Stubble shaving cum fertilizer applicator).

We are conducting demonstrations periodically in the farmer’s fields for rapid adoption of these implements in order toimprove soil health, productivity and also to meet labour shortage.

Last year, sugar cane seedlings were planted in 5 Acres with the help of mechanical planters purchased in India and

from abroad. The results are very encouraging with 50 MTs of average yield. This year we intend to further improve onmechanical transplanting and encourage wider row spacing for mechanized harvesting.

During the Sugar season 2015-16, sugarcane trash baling at farmer’s fields resulted in collection of 1,300 MTs of

Sugarcane trash and 171 MTs of Maize trash with the help of 3 bailers and two rakes. For the coming sugar season,we plan to procure at least 4,000 MTs of sugarcane and maize trash by adding 3 more balers. This project is part of

our company’s efforts to reduce carbon foot print by using renewable energy.

16


5. Identification of appropriate Sugarcane varieties:

In 2013-14, 21 different varieties of Sugarcane were collected from various sugarcane research stations, viz.,R.A.R.S.,Anakapalli, S.R.S.,Vuyyuru, S.R.S.,Jaherabad and SBI, Coimbatore for our varietal testing program and

collected data for last year. Of the 21 varieties, we selected one variety, viz., Co 06030 (by means of its yield andrecovery) and will commercially test this variety during the ensuing crushing season along with 8 other varieties

collected from VSI, Pune.

6. Water Management Techniques:

The most important constraint in the areas of operation of the company is management of black soils under floodingand water logged conditions due to frequent climatic depressions and heavy inflows of River water from the Godavari

River. For this purpose, a collaborative Development / Research project was initiated with effect from 2013-14 plantingseason with ANGRAU, Andhra Pradesh, at Kapileswarapuram. The results of the first year (plant crop) and second

year (Ratoon crop) are satisfactory and the same project is now coupled with Calcium peroxide (as oxidizing agent).This research project is also being continued for the current year.

7. Future plan of action:

a. Continue the technologies to provide knowhow and offer solutions to the problems in order to maximize returns to

Farmers and in turn to the Industry.

b. To expand single bud seedlings production in order to meet the overall requirement of seedlings for both plant cropand ratoon gap filling.

c. To promote mechanized cultivation to address labor shortage in our zone.

8. Benefits derived from R&D activity:

Awareness among farmers regarding adoption of latest technologies to improve sugarcane yield and recovery,development of disease free and high yielding varieties. This is achieved through demonstration trials carried out so

far.


17

ANNEXURE-IV

FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and

Rule 8(2) of the Companies (Accounts) Rules, 2014)

Disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub

section (1) of section 188 of the Companies Act, 2013 including certain arms length transaction under third proviso thereto.

Details of contracts or arrangements or transactions not at arm’s length basis:

Sl. No. Particulars Details

a) Name (s) of the related party & nature of relationship NIL

b) Nature of contracts/arrangements/transaction NIL

c) Duration of the contracts/arrangements/transaction NIL

d) Salient terms of the contracts or arrangements or transaction including the value, if any NIL

e) Justification for entering into such contracts or arrangements or transactions NIL

f) Date of approval by the Board NIL

g) Amount paid as advances, if any NIL

Details of contracts or arrangements or transactions at Arm’s length basis:

Sl. Particulars Details

No.

a) Name (s) of the Related party Southern Agencies Sri Godavari Transports

b) Nature of Relationship Some Directors or their Some Directors or their

family members are family members are

Partners in the Firm Partners in the Firm

c) Nature of contracts/arrangements/transaction Purchase of Furniture, Transport Services

Paints and Cooling

Equipment Maintenance

Services

d) Duration of the contracts/arrangements/transaction Quarterly Quarterly

e) Total Value of transaction `1,55,00,902 `1,57,54,193

f) Date of approval by the Board 25.06.2015, 27.07.2015, 25.06.2015, 27.07.2015,

24.09.2015, 26.11.2015, 24.09.2015, 26.11.2015,

15.02.2016 15.02.2016

g) Amount paid as advances, if any — —

18

Sri Sarvaraya Sugars LimitedANNEXURE-V

Form No : MGT- 9

EXTRACT OF ANNUAL RETURN

AS ON THE FINANCIAL YEAR ENDED ON 31.03.2016(Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1)

of the Companies (Management and Administration) Rules, 2014)

I.REGISTRATION AND OTHER DETAILS:

i) CIN U01115TN1956PLC003435

ii) Registration Date 14-09-1956

iii) Name of the Company SRI SARVARAYA SUGARS LIMITED

iv) Category/Sub-Category of the Company Public Company Limited by Shares

v) Address of the Registered office and contact details SRI SARVARAYA SUGARS LIMITED

12, Ethiraj Salai, Egmore,Chennai - 600 008.Tel: 044-28276182

Email :[email protected]

vi) Whether listed company No

vii) Name, Address and Contact details of Registrar In House at Registered Officeand Transfer Agent, if any

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

The entire business activities contributing10% or more of the total turnover of the Company shall be stated:

S.No Name and Description NIC Code of % to Total Turnoverof Main Products/services the Product/service of the Company

1 Aerated Drinks 11041 75.27

2 Sugar 10721 6.41

3 Electricity 35106 7.68

4 Industrial Alcohol 11019 8.00

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES —NIL

S.No. Name and Address CIN/GLN Holding/Subsidiary/ % of Shares Applicable

of the Company Associate held Section

1 Nil Nil Nil Nil Nil

IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share holding

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year %

Demat Physical Total % of Total Demat Physical Total % of Total Change during

Shares Shares the year

A. Promoters

(1) Indian

g) Individual / HUF 7,20,268 7,20,268 70.89 - 7,20,412 7,20,412 70.90 0.01

h) Central Govt.

i) State Govt(s)

j) Bodies Corp.

k) Banks/FI


19

l) Any Other

Sub-total (A)(1) 7,20,268 7,20,268 70.89 - 7,20,412 7,20,412 70.90 0.01

(2)Foreign

a) NRIs –

Individuals

b) Other –

Individuals

c) Bodies Corp.

d) Banks/ FI

e) Any Other…

Sub-total (A)(2) - - - - - - - -

Total

Shareholding of

Promoter

(A)=(A)(1)+(A)(2) 7,20,268 7,20,268 70.89 - 7,20,412 7,20,412 70.90 0.01

B. Public

Shareholding

1. Institutions

a) Mutual Funds

b) Banks/FI

c) Central Govt.

d) StateGovt(s)

e) Venture Capital

Funds

f) Insurance

Companies

g) FIIS

h) Foreign Venture

Capital Funds

Others (specify)

Sub-total (B)(1)

2. Non-

Institutions

a) Bodies Corp.

i) Indian 1,72,650 1,72,650 16.99 1,72,650 1,72,650 16.99 -

ii) Overseas

b) Individuals

i) Individual

Shareholders

holding nominal

share capital up

to ` 1 lakh 1,08,110 1,08,110 10.64 1,07,966 1,07,966 10.63 -

ii) Individual

20


V. SHAREHOLDING OF PROMOTERS

Shareholding at the beginning of the year Shareholding at the end of the year

No. of % of total % of Shares No. of % of total % of Shares % Change

S. Name of the Shareholder Shares Shares of Pledged/ Shares Shares of Pledged/ in share

No. the company encumbered the encumbered holding

to company to during

total shares total shares the year

1 Sri.S.B.P.Anand Mohan 93785 9.23 - 93821 9.23 - 0.00038

2 Sri.S.B.P.S.Krishna Mohan 107839 10.61 - 107875 10.62 - 0.00033

3 Sri.S.B.P.Madan Mohan 72251 7.11 - 72287 7.11 - 0.00050

4 Smt.Y.A.S.Ramalakshmi Devi 71998 7.09 - 71998 7.09 - 0.00

5 Dr.S.B.P.P.Rammohan 107156 10.55 - 107192 10.55 - 0.00034

6 Smt.S.B.Radhika 59727 5.88 - 59727 5.88 - 0.00

7 Smt.Asha Rammohan 42000 4.13 - 42000 4.13 - 0.00

8 Smt.Usha Sarvarayalu 51082 5.03 - 51082 5.03 - 0.00

9 Smt.Radhika Mohan 3600 0.35 - 3600 0.35 - 0.00

10 Ms.Prerna Mohan 2850 0.28 - 2850 0.28 - 0.00

11 Smt.Priyadarsini Ananda Mohan 3600 0.35 - 3600 0.35 - 0.00

12 Mr.S.B.P.S.Ajay 23225 2.29 - 23225 2.29 - 0.00

13 Mr.Rajiv Mohan 1500 0.15 - 1500 0.15 - 0.00

14 Mrs.Nithya Rammohan 1440 0.14 - 1440 0.14 - 0.00

15 Mr.S.B.P.V.C.Sanjay 23525 2.32 - 23525 2.32 - 0.00

16 Mrs.Y.NandiniRajyalakshmi 650 0.06 - 650 0.06 - 0.00

17 Sri.Y.Satyajit Prasad 650 0.06 - 650 0.06 - 0.00

18 Smt.Archana Prasad Kilaru 33390 3.29 - 33390 3.29 - 0.00

19 Mr.Gaurav Sarvaraya Kilaru 20000 1.97 - 20000 1.97 - 0.00

Total 720268 70.89 - 720412 70.90 - 0.00020

Shareholders

holding nominal

share capital

in excess of

`1 Lakh 15,000 15,000 1.48 15,000 15,000 1.48 -

c) Others (specify)

Sub-total (B)(2) 2,95,760 2,95,760 29.11 2,95,616 2,95,616 29.10 -

Total Public

Shareholding

(B)=(B)(1)+(B)(2) 2,95,760 2,95,760 29.11 2,95,616 2,95,616 29.10

C. Shares held by

Custodian for

GDRs & ADRs

Grand Total

(A+B+C) 10,16,028 10,16,028 100.00 10,16,028 10,16,028 100.00 -


21

VI. CHANGE IN PROMOTERS’ SHAREHOLDING (Please specify, if there is no change)

Share holding at the Cumulative Shareholding

beginning of the year during the year

Sl.No. Name of the Shareholder No. of % of total shares No. of % of total Shares

Shares of the company Shares of the company

1 Sri S.B.P.Anand Mohan

Opening Balance 01.04.2015 93785 9.23

Date wise increase/(Decrease)

Promoters Shareholding

during the year

Transfer 16.09.15 36

Closing Balance as on 31.03.16 93821 9.23

2 Sri S.B.P.S. Krishna Mohan

Opening Balance 01.04.2015 107839 10.61



during the year



3 Sri S.B.P. Madan Mohan

Opening Balance 01.04.2015 72251 7.11



during the year



4 Smt.Y.A.S.Ramalakshmi Devi

Opening Balance 01.04.2015 71998 7.09



during the year


5 Dr. S.B.P.P.Rammohan

Opening Balance 01.04.2015 107156 10.55



during the year



6 SmtS.B.Radhika

Opening Balance 01.04.2015 59727 5.88



during the year


22


7 Sri S.B.P.S. Ajay

Opening Balance 01.04.2015 23225 2.29



during the year


8 Sri S.B.P.V.C. Sanjay

Opening Balance 01.04.2015 23525 2.32



during the year


At the End of the Year 559650 55.08 559650 55.08

VII. SHAREHOLDING PATTERN OF TOP TEN SHAREHOLDERS

(Other than Directors, Promoters and Holders of GDRs and ADRs)





1 Shri.Prashant Shrimal

Opening Balance 01.04.2015 15000 1.48 15000 1.48


Promoters Shareholding - -

during the year

Closing Balance as on 31.03.16 15000 1.48 15000 1.48

2 Smt.V.L.Dutt

Opening Balance 01.04.2015 7500 0.74 7500 0.74


Promoters Shareholding - - - -

during the year


3 Shri.N.Venkata Venugopala Rao

Opening Balance 01.04.2015 7500 0.74 7500 0.74



during the year


4 Ms.Ravipati Vijayalakshmi

Opening Balance 01.04.2015 6000 0.59 6000 0.59



during the year



23

5 Smt.S.R.V.Rajyalakshmamma

Opening Balance 01.04.2015 4500 0.44 4500 0.44



during the year


6 Shri.Dwibhashyam Venkata

Srirama Murthy

Opening Balance 01.04.2015 3000 0.30 3000 0.30



during the year


7 Dr. B.B.Ramaiah

Opening Balance 01.04.2015 3000 0.30 3000 0.30



during the year


8 Smt.ChundruSubbalakshmi

Opening Balance 01.04.2015 2800 0.28 2800 0.28



during the year


9 Shri.Ch.S.V.H.S. Prasad

Opening Balance 01.04.2015 2100 0.21 0.19

Date wise increase/(Decrease) 0.02

16.09.2015 180

26.11.2015 120


during the year


10 Shri.Pendyala Narendranath

Choudary

Opening Balance 01.04.2015 1560 0.15 1560 0.15



during the year


24


VIII. SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL





1 Dr. N.R.Sivaswamy

Opening Balance 01.04.2015 - -

Date wise increase/(decrease)

in shareholding - -

Closing Balance 31.03.2016 - -

2 Dr.B.B.Ramaiah

Opening Balance 01.04.2015 3000 0.30


in shareholding -

Closing Balance 31.03.2016 3000 0.30

3 Shri.M.Subbarayudu

Opening Balance 01.04.2015 1500 0.15


in shareholding -

Closing Balance 31.03.2016 1500 0.15

4 Shri.M.Narasimha Rao

Opening Balance 01.04.2015 -


in shareholding -

Closing Balance 31.03.2016 - - -

5 Dr.K.Mohan Naidu

Opening Balance 01.04.2015 -


in shareholding -

Closing Balance 31.03.2016 - - -

6 Smt.Usha Sarvarayalu

Opening Balance 01.04.2015 51082 5.03


in shareholding -

Closing Balance 31.03.2016 51082 5.03

7 Dr.S.B.P.P.Rammohan

Opening Balance 01.04.2015 107156 10.54


in shareholding (16.09.15) 36

Closing Balance 31.03.2016 107192 10.55

8 Shri.S.B.P.S.Krishna Mohan

Opening Balance 01.04.2015 107839 10.61



Closing Balance 31.03.2016 107875 10.61


25

9 Shri.S.B.P. Madan Mohan

Opening Balance 01.04.2015 72251 7.11



Closing Balance 31.03.2016 72287 7.11

10 Shri.S.B.P. Anand Mohan

Opening Balance 01.04.2015 93785 9.23



Closing Balance 31.03.2016 93821 9.23

11 Shri.S.B.P.V.C. Sanjay

Opening Balance 01.04.2015 23525 2.31


in shareholding

Closing Balance 31.03.2016 23525 2.31

12 Smt.S.B. Rajarajeswaramma

Opening Balance 01.04.2015 - -

Date wise increase/(decrease) - - - -

in shareholding

Closing Balance 31.03.2016 -

At the End of the Year 460282 45.28 460282 45.29

IX. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment:

Secured Loans Unsecured Deposits Total

excluding Loans Indebtedness

deposits

` ` ` `

Indebtedness at the

beginning of the

financial year

i) Principal Amount 192,73,21,474 3,02,44,059 3,70,22,000 199,45,87,533

ii) Interest due but not paid 50,41,073 - - 50,41,073

iii) Interest accrued but not due 39,19,527 - - 39,19,527

Total (i+ii+iii) 193,62,82,074 3,02,44,059 3,70,22,000 200,35,48,133

Change in Indebtedness

during the financial year

* Addition 52,60,05,838 - 5,11,20,290 57,71,26,128

* Reduction 34,86,96,171 3,02,44,059 2,18,87,000 40,08,27,230

Net Change 17,73,09,667 (3,02,44,059) 2,92,33,290 17,62,98,898

Indebtedness at the

end of the financial year

i) Principal Amount 211,25,51,117 - 6,23,81,000 217,49,32,117

ii) Interest due but not paid - - 2,14,656 2,14,656

iii) Interest accrued but not due 10,40,624 - 36,59,634 47,00,258

Total (i+ii+iii) 193,62,82,074 - 6,62,55,290 217,98,47,031

26

Sri Sarvaraya Sugars LimitedX. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager

Sl. Particulars of Remuneration Smt Dr. Sri Sri Sri Total

No. S.B. Rajarajeswaramma S.B.P.P. Rammohan S.B.P.S. Krishna Mohan S.B.P. Madan Mohan S.B.P. Anand Mohan Amount

Managing Director Joint Managing Director Joint Managing Director Executive Director Executive Director

` ` ` ` ` `

1 Gross Salary

(a) Salary as per provisions 58,60,067 47,71,824 47,32,095 39,93,901 38,79,614 2,32,37,501

contained in section 17(1)

of the Income-tax Act, 1961

b) Value of perquisties

u/s17(2)

Income-tax Act, 1961 - - - - - -

c) Profits in lieu of salary

under section 17(3)

IncomeTax Act, 1961 - - - - - -

2 Stock Option - - - - - -

3 Sweat Equity - - - - - -

4 Commission 50,11,137 41,75,948 41,75,948 34,79,957 34,79,957 2,03,22,947

- a % of profit - - - - - -

- others, specify… - - - - - -

5 Others, please specify - - - - - -

Total (A) 1,08,71,204 89,47,772 89,08,043 74,73,858 73,59,571 4,35,60,448

B. Remuneration to other Directors:

Sl. Particulars of Remuneration Name of Directors Total

No.Dr N.R. Sivaswamy Dr B.B.Ramaiah Sri M.Narasimha Rao Dr. K.Mohan Naidu Sri M.Subbarayudu

Amount

` ` ` ` ``

Independent Directors

* Fee for attending Board /

Committee Meetings 90,000 - 1,20,000 50,000 50,000 3,10,000

* Commission

* Others, please specify

Total (1) 90,000 - 1,20,000 50,000 50,000 3,10,000

Smt Usha Sri S.B.P.V.C.

Sarvarayalu Sanjay

Other Non-Executive

Directors

* Fee for attending Board /

Committee Meetings 20,000 - 20,000

* Commission

* Others, please specify

Total (2) 20,000 - 20,000

Total (B) = (1+2) 1,10,000 - 1,20,000 50,000 50,000 3,30,000

Total Managerial

Remuneration 4,38,90,448


27

C. Remuneration to Key Managerial Personnel other than MD/Manager/Whole-time Director

Sl. No. Particulars of Remuneration Key Managerial Personnel

CEO Company secretary CFO Total

1 Gross salary

(a) Salary as per provisions

contained in section 17(1)

of the Income-tax Act, 1961

b) Value of perquisties u/s

17(2) Income-tax Act, 1961 —N I L——

c) Profits in lieu of salary

under section 17(3) Income

tax Act, 1961

2 Stock Option

3 Sweat Equity

4 Commission

- a % of profit

- others, specify…

5 Others, please specify

Total

IX. PENALTIES /PUNISHMENT / COMPOUNDING OF OFFENCES:

Type Section of the Brief Details of Penalty/ Authority Appeal made,

Companies Act Description Punishment/ (RD/NCLT if any (give

Compounding / COURT) Details)

fees imposed

A. COMPANY

Penalty

Punishment —N I L——

Compounding

B. DIRECTORS

Penalty


Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty


Compounding

28


INDEPENDENT AUDITORS’ REPORT

To

The Members of


CHENNAI.

Report on the Financial Statements:

1. We have audited the accompanying financial statements of Sri Sarvaraya Sugars Limited, (“the Company”), which

comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for

the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements:

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013

(“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial

position, financial performance and cash flows of the Company in accordance with the accounting principles generally

accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the

Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in

accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting

frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and

estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial

controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records,

relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from

material misstatement, whether due to fraud or error.

Auditor’s Responsibility:

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are

required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act.

Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the

financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the

risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial

statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the

accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial

statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion on the financial statements.

Basis for Qualified Opinion

8. Attention is invited to the Note No. 20A forming part of accounts, regarding advances given to two partnership firms,

which are distributors of aerated water products of the company and recoverable as on 31st March 2016 amounting to

` 17,62,33,354/-, which in the opinion of the Board of Directors are fully recoverable. We are unable to express an

opinion on the same.


29

Qualified Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, except for the possible

effect, if any, of the matter described in the Basis for Qualified Opinion paragraph (08) above, the aforesaid financial

statements give the information required by the Act in the manner so required and give a true and fair view in conformity

with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March,

2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

10. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India

in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the

Company as we considered appropriate and according to the information and explanations given to us, we give in the

“Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act, we report that:

a) We have sought and, except for the matters described in the Basis for Qualified Opinion paragraph, obtained all

the information and explanations which to the best of our knowledge and belief were necessary for the purposes of

our audit.

b) Except for the possible effects, if any, of the matter described in the Basis for Qualified Opinion paragraph above,

in our opinion, proper books of account as required by law have been kept by the Company so far as it appears

from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are

in agreement with the books of account.

d) Except for the possible effect, if any, of the matter described in the Basis for Qualified Opinion paragraph above, in

our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133

of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse

effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as on 31st March, 2016 and taken on record

by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a

director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the

operating effectiveness of such controls, refer to our separate report in “Annexure B”.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies

(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations

given to us:

i. The Company does not have any pending litigations that would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any

material foreseeable losses.

iii. There is no delay in amount which is required to be transferred to the Investor Education and Protection Fund

by the Company.

For BRAHMAYYA & CO.,

Chartered Accountants

Firm Registration No. 000513S

Camp: Chennai C.V.Ramana Rao

Date : 26th May 2016 Partner

Membership No.018545

30


Annexure A to Independent Auditors’ Report:

Referred to in paragraph 10 of the Independent Auditor’s Report of even date to the members of Sri Sarvaraya Sugars

Limited, Chennai, on the financial statements for the year ended 31st March, 2016:

i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation

of fixed assets.

b) The fixed assets have been physically verified by the management during the period in accordance with a phased

programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the

nature of its assets. According to the information furnished to us, no material discrepancies have been noticed on

such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of the

Company, the title deeds of all the immovable properties, some of which are lodged with the company’s Bankers,

are held in the name of the Company.

ii) Physical verification of inventory has been conducted during the period by the management at reasonable intervals.

According to the information furnished to us, no material discrepancies have been noticed on such verification.

iii) The Company has not granted any loans, secured or unsecured to Companies, firms, Limited Liability Partnerships or

other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, clauses (iii)

(a), (iii) (b) and (iii) (c) of the order are not applicable to the Company.

iv) The company has neither given any loans to the directors or any other persons in whom any of the directors is

interested nor given/provided any guarantee/security in connection with any loan taken by directors or such other

persons as per the provisions of section 185 of the Companies Act, 2013. The investments, which were made by the

company in earlier years do not exceed the limits prescribed under section 186 of the Companies Act, 2013.

v) In our opinion and according to the information and explanations given to us, the Company has complied with the

provisions of section 73 to 76, other applicable provisions of the Companies Act, 2013 and Companies (Acceptance of

Deposits) Rules, 2014 with regard to the deposits accepted. According to the information furnished to us, no Order

has been passed on the company by the Company Law Board or National Company Law Tribunal or Reserve Bank of

India or any Court or any other Tribunal for non-compliance with the provisions of Sections 73 to 76 of the Companies

Act, 2013.

vi) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central

Government for the maintenance of the cost records under sub-section (1) of section 148 of the Companies Act, 2013

in respect of Sugar, Distillery, Co-generation of Power units at Chelluru and Bottling units at Vemagiri, Kesavaram and

Sathupally of the Company and are of the opinion that prima facie the prescribed accounts and records have been

made and maintained.

vii) a) According to the records of the Company, it is regular in depositing undisputed statutory dues including provident

fund, employees’ state insurance, income-tax, sales-tax, service-tax, duty of customs, duty of excise, value

added tax, cess, and other material statutory dues applicable to it to appropriate authorities.

b) As at 31st March 2016, there have been no disputed dues, which have not been deposited with the respective

authorities in respect of Income-tax, Sales tax, Wealth-tax, Service-tax, and Cess, except the following:

Name of the Statute Nature of the Dues *Amount Period to which Forum where the

` the matter relates dispute is pending

Central Excise Act, 1944 Non-Reversal of Cenvat credit oninputs of damaged glass bottles 1,87,331 2004-05 to 2006-07 Hon’ble High Court of A.P.

Central Excise Act, 1944 Non-payment of Excise Duty on 8,16,220 2008-09 to 2014-15 Commissioner of Central Exciseremoval of scrap of glass & Customs (Appeals),

Visakhapatnam

Central Excise Act, 1944 Claim of Modvat 77,865 Jun 1995 to Sep 1995 Asst Commissioner of CentralExcise, Rajahmundry

Central Excise Act, 1944 Claim of Modvat 39,595 May 1995 to June 1995 CESTAT, Bangalore


31

Name of the Statute Nature of the Dues *Amount Period to which Forum where the

` the matter relates dispute is pending

Central Excise Act, 1944 Excise Duty involved on removalof Finished Goods 1,53,237 March 2001 Hon’ble High Court of A.P.

Central Excise Act, 1944 Non maintenance of separate 4,73,73,135 Apr 2003 to Dec 2007 Hon’ble High Court of A.P.books for inputs & input services

Service Tax Irregular availment of Cenvat 32,93,872 2012-13 & 2013-14 Commissioner of Central Excisecredit on input services & Customs (Appeals),

Visakhapatnam

Service Tax Non-Reversal of proportionate 14,66,181 2007-08 to 2011-12 Commissioner (Appeals),Cenvat credit on input services Visakhapatnam

Service Tax Irregular availment of Cenvat 75,57,034 2011-12 & 2012-13 CESTAT, Bangalorecredit on input services

APGST Act Sales Tax demands 8,55,291 AY 1995-96 Hon’ble High Court of A.P.

Value Added Tax Act Sales Tax demands 67,14,897 AY 2005-06 AP STAT

Value Added Tax Act Sales Tax demands 2,21,613 AY 2010-11 AP STAT

Value Added Tax Act Sales Tax demands 15,21,131 AY 2011-12 to 2012-13 ADC (CT)

APGST Act Sales Tax demands 6,06,777 AY 2011-12 to 2012-13 ADC (CT)

*Net of pre-deposits made.

viii) According to the records of the Company examined by us and the information and explanation given to us, theCompany has not defaulted in repayment of dues of loans or borrowings to any financial institution, Bank, Governmentor debenture holders as at the balance sheet date.

ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments),whereas term loans raised during the financial year under report and in earlier years have been applied for the purposesfor which they were raised.

x) During the course of our examination of the books of account and records of the Company, carried out in accordancewith the generally accepted auditing practices in India, and according to the information and explanations given to us,we have neither come across any instance of material fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit.

xi) According to the information and explanations given to us and based on our examination of the records of the Company,the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated bythe provisions of section 197 read with Schedule V to the Act.

xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company.Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company,transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as required by the applicable accountingstandards.

xiv) According to the information and explanations given to us and based on our examination of the records of the Company,the Company has not made any preferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

xv) According to the information and explanations given to us and based on our examination of the records of the Company,the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly,paragraph 3(xv) of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For BRAHMAYYA & CO.,Chartered Accountants


Camp: Chennai C.V.Ramana RaoDate : 26th May 2016 Partner


32


Annexure B to Independent Auditors’ Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the

Act”) of even date to the members of Sri Sarvaraya Sugars Limited, Chennai, on the financial statements for the year ended

March 31, 2016:

1. We have audited the internal financial controls over financial reporting of Sri Sarvaraya Sugars Limited, Chennai (“the

Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year

ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaining internal financial controls based on “the

internal control over financial reporting criteria established by the Company considering the essential components of

internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by

the Institute of Chartered Accountants of India”. These responsibilities include the design, implementation and

maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient

conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and

detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation

of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based

on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls

Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be

prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial

controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered

Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and

plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over

financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls

system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial

reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk

that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control

based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of

the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit

opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting

includes those policies and procedures that:

i. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company.

ii. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial

statements in accordance with generally accepted accounting principles, and that receipts and expenditures of

the company are being made only in accordance with authorizations of management and directors of the company;

and


33

iii. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition

of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of

collusion or improper management override of controls, material misstatements due to error or fraud may occur and

not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future

periods are subject to the risk that the internal financial control over financial reporting may become inadequate

because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial

reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016,

based on “the internal control over financial reporting criteria established by the Company considering the essential

components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial

Reporting issued by the Institute of Chartered Accountants of India”.

For BRAHMAYYA & CO.,

Chartered Accountants


Camp: Chennai C.V.Ramana Rao

Date : 26th May 2016 Partner


34


BALANCE SHEET AS AT 31st MARCH 2016

Note AS AT AS AT

No. 31-03-2016 31-03-2015

EQUITY AND LIABILITIES: `̀̀̀̀ `

A. Shareholders’ Funds :Share capital 2 1,01,60,280 1,01,60,280Reserves and Surplus 3 156,35,38,607 133,73,39,853

SUB TOTAL (A) 157,36,98,887 134,75,00,133B. Non-Current Liabilities :Long-Term Borrowings 4 61,82,99,979 52,59,39,787Deferred Tax Liability 5 30,65,03,286 32,35,47,642Other Long Term Liabilities 6 20,42,96,621 19,52,72,728Long-Term Provisions 7 2,40,66,760 2,22,50,390

SUB TOTAL (B) 115,31,66,646 106,70,10,547C. Current Liabilities :Short-Term Borrowings 8 130,33,79,902 125,68,93,369Trade Payables 9 68,76,10,459 62,99,35,586Other Current Liabilities 10 88,97,23,487 85,52,08,549Short-Term Provisions 11 13,81,19,838 4,14,07,501

SUB TOTAL (C) 301,88,33,686 278,34,45,005

TOTAL(A+B+C) 574,56,99,219 519,79,55,685ASSETS:A. Non Current Assets :Tangible Assets 12 248,13,43,489 264,52,81,231Capital Work-in-Progress 13 111,67,43,589 13,48,08,266Non-Current Investments 14 9,08,685 19,08,685Long-Term Loans and Advances 15 12,38,76,393 25,46,48,155Other Non Current Assets 16 2,24,35,861 1,31,20,140

SUB TOTAL (A) 374,53,08,017 304,97,66,477B. Current Assets :Inventories 17 115,86,13,289 141,28,69,915Trade Receivables 18 30,98,49,579 11,77,81,883Cash and Bank Balances 19 7,37,89,720 12,35,50,608Short-Term Loans and Advances 20 20,91,57,333 27,20,65,223Other Current Assets 21 24,89,81,281 22,19,21,579

SUB TOTAL (B) 200,03,91,202 214,81,89,208

TOTAL(A+B) 574,56,99,219 519,79,55,685

Significant Accounting Policies 1 to 39

As per our Report of even date annexed S.B.Rajarajeswaramma On behalf of Board of DirectorsFor Brahmayya & Co Managing Director N.R.Sivaswamy

M.Narasimha Rao K.Mohan Naidu

C.V. Ramana Rao S.B.P.P. Rammohan M.SubbarayuduPartner Joint Managing Director DirectorsMembership No.018545

S.B.P.S. Krishna Mohan S.B.P. Madan MohanJoint Managing Director Executive Director

Camp: Chennai S.B.P.Anand MohanDate: 26.05.2016 Executive Director


35

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2016

Note This Year Previous Iear

No. (12 Months) (18 Months)

I. Income : `̀̀̀̀ `

Revenue from Operations 22 485,04,59,297 670,74,66,049

Other Income 23 4,70,85,950 4,14,09,349

Total Revenue 489,75,45,247 674,88,75,398

II. Expenses:

Cost of Materials Consumed 24 202,84,64,343 356,66,76,538

Cost of Sale of Trading Goods 25 50,68,95,628 71,59,80,580

Changes in Inventories of Finished Goods and Stock-in-Process. 26 13,56,76,612 (48,92,24,321)

Manufacturing Expenses 27 48,70,40,175 77,89,05,877

Employee Benefits Expenses 28 53,29,84,073 76,29,27,821

Finance Costs 29 27,74,19,945 42,20,18,564

Depreciation 12 27,26,56,784 30,19,06,109

Other Expenses 30 29,86,32,832 41,07,77,695

Total Expenses 453,97,70,392 646,99,68,863

III. Profit before Tax and Extraordinary Items (I-II): 35,77,74,855 27,89,06,535

IV. Extraordinary Items

i) Cenvat credit claimed on purchase of molasses in earlier years (5,94,06,105) -

ii) Paid towards Voluntary Retirement Scheme 2,54,85,577 -

V. Profit before Tax (III-IV) 39,16,95,383 27,89,06,535

VI. Tax Expense:

(1) Current Tax: For the year 15,75,00,000 11,78,99,738

For Earlier Years (1,00,20,152) (1,86,802)

Refunds Received (2,09,37,576) (1,73,35,381)

(2) Deferred Tax (40,12,472) (1,08,18,509)

VII. Profit after Tax (V-VI) 26,91,65,583 18,93,47,489

Earnings Per Share (Basic and Diluted) 264.92 186.36

(Refer Note No.36)

As per our Report of even date annexed S.B.Rajarajeswaramma On behalf of Board of DirectorsFor Brahmayya & Co Managing Director N.R.Sivaswamy

M.Narasimha Rao K.Mohan Naidu

C.V. Ramana Rao S.B.P.P. Rammohan M.SubbarayuduPartner Joint Managing Director DirectorsMembership No.018545

S.B.P.S. Krishna Mohan S.B.P. Madan MohanJoint Managing Director Executive Director

Camp: Chennai S.B.P.Anand MohanDate: 26.05.2016 Executive Director

36


NOTES TO THE FINANCIAL STATEMENTS

NOTE - 2 : Share Capital

Nos. `̀̀̀̀ Nos. `

a. AuthorisedEquity Shares of ` 10/- each

Redeemable Cumulative Preference Shares of ̀ 100/- each

Equity Shares of ` 10/- each 30,00,000 3,00,00,000 30,00,000 3,00,00,000

Redeemable Cumulative Preference Shares of ̀ 100/- each

(Carrying Preference dividend of not exceeding 15%, as may

be determined by the Board at the time of issue) 7,00,000 7,00,00,000 7,00,000 7,00,00,000

10,00,00,000 10,00,00,000

b. Issued, Subscribed & Paid upEquity Shares of ̀ 10/- each Fully Paid up 10,16,028 1,01,60,280 10,16,028 1,01,60,280

Total 1,01,60,280 1,01,60,280

NOTE 2.a: Equity Shares in the Company held by each Shareholder holding more than 5% shares, specifying the number

of Shares:

Name of the Shareholder

K C P Sugar and Industries Corporation Ltd 14.76% 1,50,000 14.76% 1,50,000

Sri S B P S Krishna Mohan 10.62% 1,07,875 10.61% 1,07,839

Dr S B P P Rammohan 10.55% 1,07,192 10.55% 1,07,156

Sri S B P Anand Mohan 9.23% 93,821 9.23% 93,785

Sri S B P Madan Mohan 7.11% 72,287 7.11% 72,251

Smt.Y A S Ramalakshmi Devi 7.09% 71,998 7.09% 71,998

Smt.S B Radhika 5.88% 59,727 5.88% 59,727

Smt. Usha Sarvarayalu 5.03% 51,082 5.03% 51,082

As at

31-03-2016

As at

31-03-2015

% ofShareholding

No. of Shares % of

ShareholdingNo. of Shares

As at

31-03-2016

As at

31-03-2015


37

NOTE 3: Reserves and Surplus

` ` ` `

a. Capital Reserves 39,200 39,200

b. Other Reserves (General Reserve)

Balance at the beginning of the year 90,00,00,000 86,40,00,000

(+) Current Year Transfer 9,00,00,000 3,60,00,000

Balance at the end of the year 99,00,00,000 90,00,00,000

c. Surplus

Balance at the beginning of the year 43,73,00,653 29,61,81,839

(+) Net Profit For the current year 26,91,65,582 18,93,47,488

(-) Transfer to Reserves 9,00,00,000 3,60,00,000

(-) Adjustment of carrying amount of fixed assets

whose remaining useful remaining life is exhausted

as per Schedule II to Companies Act, 2013

(net of Deferred Tax) 2,46,23,817 -

(-) Proposed Dividend 1,52,40,420 1,01,60,280

(-) Tax on Proposed Dividend 31,02,591 20,68,394

Balance at the end of the year 57,34,99,407 43,73,00,653

Total(a+b+c) 156,35,38,607 133,73,39,853

NOTE 4: Long Term Borrowings

` ` ` `

1. Secured:

I. From Scheduled Banks: (Refer to Note 4A)

a. Under Scheme for Extension of FinancialAssistance to Sugar Undertakings(SEFASU): 7,08,51,140 10,28,27,000

b. SOFT Loans 7,39,04,739 -

c. Other Term Loans 23,76,29,255 37,08,72,071

d. On Hypothecation of Vehicles 11,57,552 8,98,657

e. Supplier’s Credit 18,75,41,293 -

57,10,83,979 47,45,97,728

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

38


II. From Sugar Development Fund: - 11,96,000

1. SEFASU term loans from Bank of Baroda, Indian

Bank, State Bank of India, Central Bank of India and

Andhra Bank (Consortium Members) are secured by

pari-passu first charge on fixed assets of Sugar and

Distillery and pari-passu second charge on current

assets of Sugar and Distillery Divisions.

2. SOFT loans from Bank of Baroda, Indian Bank, State

Bank of India, Central Bank of India and Andhra Bank

are secured by Pari Passu first charge on Fixed

Assets of Sugar and Distillery units of the Company

including land and all buildings and structures now

standing thereon or to be erected hereafter and the

plant and machinery attached to the earth or

permanently fastened to anything attached to the

earth, both present and future.

3. All other Term loans are secured by first charge on

all the movable & immovable properties of, both

present and future, excluding book debts, pertaining

to:

a) Bottling Units at Vemagiri, Kesavaram and

Sathupalli to Bank of Baroda, Indian Bank and

State Bank of India ranking pari passu with each

other

b) Sugar and bagasse based Co-generation Units

at Chelluru to Bank of Baroda, Andhra Bank and

Sugar Development Fund ranking pari passu with

each other and Bottling Units at Kesavaram,

Vemagiri, and Kinley unit at Sathupalli collaterally

secured Second Charge to Andhra Bank.

c) First pari passu charge on plant and machinery

at Gopalapuram unit being funded out of term

loan from Standard Chartered Bank and other

Banks

d) Agreed to be secured exclusively of specific Plant

and Machinery supplied under Supplier’s credit

to the supplier of the said Plant and Machinery

Besides all the above loans are subject to

charges created or to be created in favour of the

Company’s Bankers on Current Assets for

securing borrowings for working capital

requirements.

2. Unsecured:From Directors - 3,02,44,059

Public Deposits (includes `̀̀̀̀ 3,40,57,000/- - from

Directors - Previous year ̀ Nil) 4,72,16,000 1,99,02,000

Total 61,82,99,979 52,59,39,787

As at

31-03-2016

As at

31-03-2015


39

NOTE 4a: Details of Classification of Term Loans

As at 31-03-2016 As at 31-03-2015

` ` ` ` ` ` ` `

S e c u r e d :

Term Loans f rom

S c h e d u l e d B a n k s :

A. U n d e r S E F A S U :

Bank o f Ba roda 3 , 5 6 , 7 9 , 7 7 0 2 , 3 6 , 7 9 , 7 7 0 1 , 2 0 , 0 0 , 0 0 0 - 3 , 6 2 , 8 2 , 0 8 0 3 , 6 1 , 0 0 , 0 0 0 - 1 , 8 2 , 0 8 0

S t a t e B a n k o f I n d i a 2 , 5 2 , 0 0 , 5 2 4 1 , 8 2 , 0 0 , 5 2 4 7 0 , 0 0 , 0 0 0 - 2 , 5 5 , 1 2 , 7 0 6 2 , 5 2 , 0 0 , 0 0 0 - 3 , 1 2 , 7 0 6

I n d i a n B a n k 2 , 6 9 , 0 2 , 7 3 0 1 , 8 1 , 0 2 , 7 3 0 8 8 , 0 0 , 0 0 0 - 2 , 6 9 , 0 7 , 6 4 9 2 , 6 6 , 0 0 , 0 0 0 - 3 , 0 7 , 6 4 9

Cen t ra l Bank o f I nd i a 9 3 , 2 7 , 5 0 0 7 7 , 7 2 , 5 0 0 1 5 , 5 5 , 0 0 0 - 9 4 , 3 8 , 5 6 6 9 3 , 2 7 , 0 0 0 - 1 , 11 , 5 6 6

Andh ra Bank 4 9 , 6 2 , 2 8 2 3 0 , 9 5 , 6 1 6 1 8 , 6 6 , 6 6 6 - 5 6 , 0 0 , 0 0 0 5 6 , 0 0 , 0 0 0 - -

To t a l ( A ) 1 0 , 2 0 , 7 2 , 8 0 6 7 , 0 8 , 5 1 , 1 4 0 3 , 1 2 , 2 1 , 6 6 6 - 1 0 , 3 7 , 4 1 , 0 0 1 1 0 , 2 8 , 2 7 , 0 0 0 - 9 , 1 4 , 0 0 1

B. Under SOFT:

Bank o f Ba roda 2 , 9 8 , 1 8 , 0 0 0 2 , 4 0 , 2 0 , 0 5 4 5 7 , 9 7 , 9 4 6 - - - - -

S t a t e B a n k o f I n d i a 2 , 0 8 , 0 6 , 3 4 6 2 , 0 8 , 0 6 , 3 4 6 - - - - - -

I n d i a n B a n k 2 , 2 2 , 3 6 , 3 6 4 1 , 8 6 , 3 6 , 3 6 4 3 6 , 0 0 , 0 0 0 - - - - -

Cen t ra l Bank o f I nd i a 7 6 , 9 8 , 9 2 1 6 7 , 3 6 , 4 2 1 9 , 6 2 , 5 0 0 - - - - -

Andh ra Bank 4 6 , 0 0 , 0 0 0 3 7 , 0 5 , 5 5 4 8 , 9 4 , 4 4 6 - - - - -

Tota l (B ) 8 , 5 1 , 5 9 , 6 3 1 7 , 3 9 , 0 4 , 7 3 9 1 , 1 2 , 5 4 , 8 9 2 - - - - -

C. Other Term Loans:

Bank o f Ba roda 1 7 , 0 4 , 0 9 , 9 2 7 7 , 9 1 , 1 8 , 5 0 7 9 , 1 2 , 9 1 , 4 2 0 - 2 8 , 4 4 , 3 2 , 0 4 8 1 9 , 3 9 , 8 1 , 1 5 2 8 , 8 6 , 1 2 , 2 6 0 1 8 , 3 8 , 6 3 6

Andhra Bank 4 , 0 3 , 3 6 , 2 5 2 2 , 2 4 , 6 1 , 2 9 4 1 , 7 8 , 7 4 , 9 5 8 - 8 , 7 6 , 5 3 , 8 2 7 4 , 5 8 , 7 6 , 2 4 3 4 , 1 3 , 2 8 , 5 8 4 4 , 4 9 , 0 0 0

S t a t e B a n k o f I n d i a 5 , 4 3 , 7 1 , 0 6 2 3 , 1 6 , 1 1 , 0 6 2 2 , 2 7 , 6 0 , 0 0 0 - 8 , 0 2 , 8 5 , 6 6 2 6 , 4 8 , 8 7 , 0 7 1 1 , 4 9 , 8 0 , 0 0 0 4 , 1 8 , 5 9 1

I nd ian Bank 5 , 2 5 , 3 8 , 3 9 2 2 , 9 4 , 3 8 , 3 9 2 2 , 3 1 , 0 0 , 0 0 0 - 7 , 9 3 , 3 2 , 6 1 3 6 , 5 3 , 8 2 , 6 1 3 1 , 3 9 , 5 0 , 0 0 0 -

Bank o f I nd ia - - - - 3 , 4 3 , 7 5 , 2 8 6 - 3 , 3 2 , 3 7 , 1 4 2 1 1 , 3 8 , 1 4 4

Cen t ra l Bank o f I nd ia - - - - 3 1 , 4 4 , 9 9 2 7 , 4 4 , 9 9 2 2 4 , 0 0 , 0 0 0 -

S t a n d a r d C h a r t e r e d B a n k 7 , 5 0 , 0 0 , 0 0 0 7 , 5 0 , 0 0 , 0 0 0 - - - - - -

Tota l (C ) 3 9 , 2 6 , 5 5 , 6 3 3 2 3 , 7 6 , 2 9 , 2 5 5 1 5 , 5 0 , 2 6 , 3 7 8 - 5 6 , 9 2 , 2 4 , 4 2 8 3 7 , 0 8 , 7 2 , 0 7 1 1 9 , 4 5 , 0 7 , 9 8 6 3 8 , 4 4 , 3 7 1

D. Suppl ie r ’s Cred i t 2 4 , 1 1 , 2 4 , 5 1 9 1 8 , 7 5 , 4 1 , 2 9 3 5 , 3 5 , 8 3 , 2 2 6 - - - - -

E. Sugar Development Fund (SDF) 1 2 , 3 5 , 3 8 8 - 1 2 , 3 5 , 3 8 8 - 1 , 7 6 , 3 3 , 1 3 5 1 1 , 9 6 , 0 0 0 1 , 6 4 , 3 7 , 1 3 5 -

G R A N D TOTA L ( A + B + C + D + E ) 8 2 , 2 2 , 4 7 , 9 7 7 5 6 , 9 9 , 2 6 , 4 2 7 2 5 , 2 3 , 2 1 , 5 5 0 - 6 9 , 0 5 , 9 8 , 5 6 4 4 7 , 4 8 , 9 5 , 0 7 1 2 1 , 0 9 , 4 5 , 1 2 1 4 7 , 5 8 , 3 7 2

Total

Outstanding

Considered as

Long term

borrowings

Grouped under

other current

liabilities as

current

maturities

Interest

Accrued

and

Due

To ta l

Outs tand ing

Cons idered

a s

Long term

bor rowings

Grouped under

other current

l iabi l i t ies as

current

ma tu r i t i es

In te res t

Accrued

and Due

40


Name of the Bank/Financial Institution Amount per Terms of Repaymentinstallment Repayment Commencing

from

`̀̀̀̀

A. Under SEFASU:

SUGAR UNIT

Bank of Baroda 60,00,000 6 Half yearly August 2016

State Bank of India 7,00,000 36 Monthly June 2016

Indian Bank 44,00,000 6 Half yearly June 2016

Central Bank of India 15,55,000 6 Half yearly December 2016

Andhra Bank 9,33,333 6 Half yearly August 2016

B. SOFT Loans

Bank of Baroda 8,28,278 36 Monthly September 2016

Indian Bank 6,00,000 36 Monthly October 2016

State Bank of India 3,46,667 60 Monthly October 2017

Central Bank of India 9,62,500 8 Half yearly October 2016

Andhra Bank 1,27,778 36 Monthly September 2016

C. Other Term Loans:

SUGAR UNIT

State Bank of India-Term Loan 18,25,000 20 Quarterly September 2014

Bank of Baroda- Corporate Loan 1,26,00,000 17 Quarterly November 2013

Bank of Baroda- Modernization Loan 6,22,855 36 Monthly October 2013

COGEN

Andhra Bank Corporate Loan 37,50,000 20 Quarterly December 2013

Andhra Bank Term Loan-2 35,71,428 28 Quarterly March 2012

SDF Loan 11,96,000 10 Half Yearly September 2011

KESAVARAM

Indian Bank.,Kkd.-II 19,25,000 78 Monthly February 2012

Bank of Baroda.,Kkd.-III 32,00,000 78 Monthly November 2011

State Bank of India.,Kkd.-II 12,80,000 78 Monthly October 2011

GOPALAPURAM

Standard Chartered Bank 37,50,000 20 Quarterly June 2017

D. Supplier’s Credit

GOPALAPURAM

Supplier’s Credit 2,67,91,000 10 Half Yearly February 2016

Vehicle Loans

Karur Vysya Bank-Hypothecation Loan 49,188 48 Monthly January 2013

ICICI Bank Hypothecation Loan 18,250 60 Monthly April 2015

ICICI Bank Hypothecation Loan 25,041 60 Monthly July 2015

NOTE - 4BDisclosures on Repayment Schedules of the above Term Loans:


41

NOTE 5: Deferred Tax Liability

Deferred Tax Liability: ` ` ` `

Timing difference between book and tax depreciation 36,56,92,578 39,74,17,594

II. Deferred Tax Asset:Items covered under section 43B of the

Income Tax Act, 1961 5,74,35,837 7,04,26,999

Items covered under section 40(a)(ia)

of the Income Tax Act, 1961 - 16,04,068

Provision for Doubtful Debts and Advances 17,53,455 18,38,885

5,91,89,292 7,38,69,952

Deferred Tax Liability (Net) 30,65,03,286 32,35,47,642

NOTE 6: Other Long Term Liabilities

` `

Interest accrued but not due on Public deposits 3,01,791 28,50,530

Deposits Refundable 20,39,94,830 19,24,22,198

Total 20,42,96,621 19,52,72,728

NOTE 7: Long Term Provisions

Employee Benefits: ` `

Compensated Absences 2,40,66,760 2,22,50,390

Total 2,40,66,760 2,22,50,390

NOTE 8: Short Term Borrowings

Secured: ` `

Cash Credit from Banks 128,82,14,902 123,97,73,369Sugar and Distillery Divisions:Cash Credit from Bank of Baroda, Indian Bank,State Bank of India, Central Bank of India andAndhra Bank (Consortium Members) secured bypari-passu first charge on current assets and pari-passu second charge on fixed assets of Sugarand Distillery Units and Bottling Units.

Bottling Divisions:Cash Credit from Bank of Baroda securedexclusive first charge on current assets andsecond charge on fixed assets of Bottling Units.

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

42


Co-generation UnitCash Credit from Andhra Bank exclusive first

charge on current assets including receivables.

All the above loans have been guaranteed by the

Managing Director of the Company in her personal

capacity

Unsecured :Public Deposits (includes ` Nil from Directors-

Previous year ̀ 67,000/- Unclaimed Deposits

` 1,66,000-Previous year ̀ Nil) 1,51,65,000 1,71,20,000

Total 130,33,79,902 125,68,93,369

NOTE 9: Trade Payables

` `

Total outstanding dues of Micro Enterprises and

Small Enterprises - -

Total outstanding dues of creditors other than

Micro Enterprises and Small Enterprises 68,76,10,459 62,99,35,586

Total 68,76,10,459 62,99,35,586

Note 9A: There are no dues as at the end of the year (as at the end of the previous year also) to Micro, Small and Medium

Enterprises, respectively as defined covered under Micro, Small and Medium Enterprises Development Act, 2006, based

on the information available with the Company.

NOTE 10: Other Current Liabilities

`̀̀̀̀ `̀̀̀̀ ` `

Current maturities of term loans from Banks & Sugar

Development Fund 19,96,69,010 21,17,54,377

Current maturities of Suppliers’ Credit 5,35,83,226 -Interest accrued and due on Term Borrowings - 50,41,073

Interest accrued but not due on Term Borrowings 10,40,624 6,14,110

Interest accrued and due on Public Deposits

(Includes interest on unclaimed deposit `̀̀̀̀ 63,910/-Previous year Rs Nil) 2,14,656 -Interest accrued but not due on Public Deposits 36,59,634 33,05,417

Other Liabilities 23,91,82,548 30,71,53,009

Advances from Customers 2,55,38,147 1,53,23,175

Sundry Creditors for Capital Goods 21,12,57,679 14,22,99,939

Statutory Dues Payable 14,86,21,399 16,15,32,085

Deposits Refundable 54,43,620 68,12,434

Unclaimed Dividends 15,12,944 13,72,930

Total 88,97,23,487 85,52,08,549

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015


43

NOTE 11: Short Term Provisions

Provision for Employee Benefits `̀̀̀̀ `

Gratuity (Funded) 2,90,27,848 2,78,14,452

Leave Encashment (Unfunded) 16,88,829 13,64,375

Others:Proposed Dividend 1,52,40,420 1,01,60,280

Provision for Tax on Proposed Dividend 31,02,591 20,68,394

Provision for Taxation (Net of Advance Tax and TDS) 8,90,60,150 -

Total 13,81,19,838 4,14,07,501

NOTE 12: Tangible AssetsDEPRECIATION STATEMENT FROM 01.04.2015 TO 31.03.2016

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

Descr ip t ion As at Add i t ions/ Deductions/ As at As at For the Deductions/ As at As at As at01 .04 .2015 Adjustments Adjustments 31.03 .2016 01.04 .2015 Year Adjustments 31.03 .2016 31.03 .2016 31.03 .2015

` ` ` ` ` ` ` ` ` `

1 Land 23,69,47,562 5,13,945 - 23,74,61,507 - - - - 23,74,61,507 23,69,47,562

2 Buildings 64,97,67,008 2,13,90,388 39,32,907 66,72,24,489 21,31,98,026 3,41,96,644 6,06,469 24,67,88,201 42,04,36,288 43,65,68,982

3 Plant and Equipment 241,34,23,386 4,82,20,229 3,01,07,101 243,15,36,514 107,87,27,797 7,69,80,009 2,37,31,009 113,19,76,797 129,95,59,717 133,46,95,589

4 Furniture and Fixtures 43,23,24,219 4,00,19,755 13,91,884 47,09,52,090 20,69,68,991 11,90,36,302 13,18,659 32,46,86,634 14,62,65,456 22,53,55,228

5 Vehicles 9,87,75,163 31,48,278 38,87,237 9,80,36,204 6,92,19,806 1,00,46,080 35,86,068 7,56,79,818 2,23,56,386 2,95,55,357

6 Office Equipment 1,18,04,404 7,29,408 61,424 1,24,72,388 94,23,418 14,32,190 41,743 1,08,13,865 16,58,523 23,80,986

7 Crates & Glass Bottles 47,84,09,763 9,35,67,981 6,79,41,977 50,40,35,767 9,86,32,236 6,86,21,264 1,68,23,345 15,04,30,155 35,36,05,612 37,97,77,527

Total 432,14,51,505 20,75,89,984 10,73,22,530 442,17,18,959 167,61,70,274 31,03,12,489 4,61,07,293 194,03,75,470 248,13,43,489 264,52,81,231

Previous Year 411,39,66,930 29,83,69,213 9,08,84,638 432,14,51,505 140,89,26,886 30,19,06,109 3,46,62,722 167,61,70,274 264,52,81,231 270,50,40,044

Depreciation for the year includes:

Carrying amount of fixed assets whose revised useful life has exhausted

before 01.04.2015 adjusted to Retained earnings 3,76,55,704

Debited to Profit & Loss Account 27,26,56,785

Total 31,03,12,489

NOTE 12A:Pursuant to Schedule II to the Companies Act, 2013 (‘the Act’) becoming applicable w. e. f. 01.04.2015, depreciation for the

year ended 31st March, 2016 has been provided on the basis of the useful life of all the assets as prescribed in Part ‘C’ of

Schedule II of the Act. Accordingly in respect of the assets whose revised useful life has exhausted before 01.04.2015 the

carrying amount of the said assets amounting to `2,46,23,818/- (net of Deferred Tax of Rs 1,30,31,886 /-) has been

adjusted to retained earnings. Besides the depreciation charge for the year is higher by ̀ 6,34,28,015/-, when compared to

previous year.

As at

31-03-2016

As at

31-03-2015

44


NOTE 13: Capital Works in Progress

` `

Capital Works under Progress 106,47,47,443 11,75,76,056

Expenditure Incidental to Construction Awaiting Allocation 5,19,96,146 1,72,32,210

Total 111,67,43,589 13,48,08,266

NOTE 13A: Expenditure incidental to construction awaiting allocation

` ` ` `

a. Balance at the beginning of the year: 1,72,32,210 55,25,826

b. Net Expenditure incurred during the year: Staff cost 69,80,866 23,52,933

Rent 76,971 65,000

Insurance 8,64,266 4,28,151

Rates & Taxes 47,82,719 8,71,120

Professional and Consultancy Charges 21,22,554 32,09,791

Interest paid and Finance charges 1,60,71,716 44,45,477

Administration Expenses 13,05,673 2,40,174

Other Expenses 26,09,171 4,42,219

3,48,13,936 1,20,54,865

Less: Miscellaneous Receipts 50,000 3,48,481

3,47,63,936 1,17,06,384

Expenditure Awaiting Allocation to Fixed Assets 5,19,96,146 1,72,32,210

NOTE 14: Non-Current Investments

1. In Mutual Funds: `̀̀̀̀ `̀̀̀̀ ` `

1,00,000 units of ̀ 10 each in SBI Growth Fund*** - - - 10,00,000

2. Quoted, Fully Paid Up (Trade) a) 3,044 Equity Shares of ̀ 10/- each in Andhra Bank 2,73,960 2,73,960

b) 6,975 Equity Shares of ̀ 10/- each in Indian Bank 6,34,725 6,34,725

9,08,685 9,08,6853. Unquoted, Fully Paid Up (Non-Trade) a) 1,54,624 Equity Shares of ̀ 10/- each

in Sarvaraya Textiles Limited 25,45,600 25,45,600Less: Diminution in value 25,45,600 - 25,45,600 -

b) 250 Equity Shares of ̀ 100/- eachin Pan Chrome Chemicals Pvt.Ltd., 25,000 25,000Less: Diminution in value 25,000 - 25,000 -

c) 3,56,269 Equity Shares of ̀ 10/- eachin East Coast Salt & Chemicals Ltd. 38,42,518 38,42,518

Less: Diminution in value 38,42,518 - 38,42,518 -

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015


45

d) 2,400 Equity Shares of ̀ 100/- each

in Lord Shoe Makers Pvt. Ltd. 24,46,980 24,46,980

Less: Diminution in value 24,46,980 - 24,46,980 -

Total 9,08,685 19,08,685

NOTE: `̀̀̀̀ `̀̀̀̀ ` `

a) Aggregate of quoted investments: Cost 9,08,685 9,08,685

Market value 8,89,332 14,46,954

b) Aggregate of unquoted investments: At cost - -

( Net of diminution in value)

*** The investments were sold during the financial year 2010-11,

disclosed as prior period item

NOTE 15: Long Term Loans and Advances

` `

Capital Advances 12,32,09,708 25,40,70,991

Advances Recoverable 6,66,685 5,77,164

Total 12,38,76,393 25,46,48,155

NOTE 16: Other Non-Current Assets

Unsecured, considered good, otherwise stated and

recoverable in cash or kind or for value to be received ` `

Deposits Recoverable 2,10,94,689 1,22,46,415

Prepaid Expenses 13,41,172 8,73,725

Total 2,24,35,861 1,31,20,140

NOTE 17: Inventories

` `

a. Stores and Spares 17,38,52,569 20,73,03,540

b. Raw Materials and Components 17,92,84,043 25,80,40,492

c. Stock in Process 58,43,879 51,83,032

d. Finished Goods 75,40,72,666 89,04,10,125

e. Stock of Trading Goods 4,55,60,132 5,19,32,726

Total 115,86,13,289 141,28,69,915

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

46


NOTE 18: Trade Receivables

Trade receivables outstanding for a period ` ` ` `

less than six monthsUnsecured and Considered Good 30,48,44,517 11,25,19,539

Trade receivables outstanding for a periodexceeding six monthsUnsecured and Considered Good 50,05,062 52,62,344

Unsecured and Considered Doubtful 35,66,618 35,66,618

85,71,680 88,28,962

Less: Provision for Doubtful Debts 35,66,618 35,66,618

50,05,062 52,62,344

Total 30,98,49,579 11,77,81,883

NOTE 19: Cash and Bank Balances

` `

a. Balances with Banks in Current Accounts 1,36,84,299 5,33,88,747

This includes:

(Earmarked Balances towards Unpaid Dividend

Accounts - less than seven years ` 15,12,944/-Previous Year ̀ 13,72,930/-)

b. Margin Money Deposits 5,04,52,364 6,04,42,208

(Towards Guarantees taken and

Letters of Credit opened)

c. Cash on Hand 12,40,144 10,08,722

d. Others - Bank Term Deposits(maturing for a period less than 12 months) 84,12,913 87,10,931

Total 7,37,89,720 12,35,50,608

NOTE 20: Short-Term Loans and Advances

Unsecured, Considered Good and Recoverable ` ` ` `

in cash or kind or for value to be received

Advances Recoverable:

Considered Good 20,91,57,333 27,20,65,223

Considered Doubtful 1,85,000 3,43,456

20,93,42,333 27,24,08,679

Less: Provision for Doubtful Advances 1,85,000 3,43,456

20,91,57,333 27,20,65,223

Total 20,91,57,333 27,20,65,223

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015

As at

31-03-2016

As at

31-03-2015


47

Note 20A: Advances recoverable includes interest free advances made to two partnership firms which are distributors for

Company’s aerated water products, for incurring capital expenditure by way of creating infrastructure to develop the market

and increase the turnover for the company’s product, amounting to ̀ 17,62,33,354/- which in the opinion of the Board of

Directors are fully recoverable.

NOTE 21: Other Current Assets

` ` ` `

Prepaid Expenses 1,20,90,920 2,49,98,946

Balances with Excise Authorities 8,75,69,841 3,00,03,722

Accrued Income 14,48,611 12,24,113

Claims Receivable 9,06,70,365 8,46,18,050

Advance Payment of Income Tax (Net of Provision) -

including Tax Deducted at Source - 7,78,789

Direct Taxes Refund Receivable 2,25,02,920 3,83,53,775

Taxes and Duties paid under protest 3,45,99,499 3,57,81,238

Other Deposits Recoverable

Considered Good 99,125 61,62,946

Considered Doubtful 15,00,000 15,00,000

15,99,125 76,62,946

Less: Provision for doubtful deposits 15,00,000 15,00,000

99,125 61,62,946

Total 24,89,81,281 22,19,21,579

NOTE 22: Revenue From Operations

(a) Sale of Manufactured Goods: ` ` ` `

Sugar 33,80,80,200 71,17,97,285

Spirit 41,41,85,506 48,96,39,945

CO2 Gas 50,98,057 1,65,63,088

Aerated Water & PRP Foods 344,05,86,587 441,56,88,959

Packaged Drinking Water 26,80,94,732 37,75,63,468

Electricity 37,24,86,324 55,42,46,620

Biocompost - 23,79,172

Others 63,000 -

483,85,94,406 656,78,78,537

Less: Excise Duty Collected 55,66,68,095 64,09,39,636

428,19,26,311 592,69,38,901

(b) Other Operating Revenues: Sale of Trading Goods

Aerated Water & PRP Foods 44,27,63,825 57,18,78,042

Packaged Drinking Water 19,05,037 -HSD Oil & Motor Spirit 12,38,64,124 20,86,49,106

56,85,32,986 78,05,27,148

Total 485,04,59,297 670,74,66,049

This Year (12 Months) Previous Year (18 Months)

As at

31-03-2016

As at

31-03-2015

48


NOTE 23: Other Income

` `

Interest Received from: Banks 47,24,242 50,03,054

Income Tax 55,74,229 8,79,594

Others 24,24,841 30,83,832

Dividends Received 35,383 36,131

Sales Incentives Received 55,60,217 1,13,90,888

Sales Tax Refund Received 77,048 39,34,208

Rent Received 3,55,580 5,03,470

Profit on Sale of Assets 46,74,666 45,06,785

Miscellaneous Receipts 84,46,594 1,09,35,465

Unclaimed Credit Balances written back 1,12,635 1,19,909

Provisions no longer required written back 26,64,360 10,16,013

Excess provision towards Excise Duty in

earlier years written back # 1,24,36,155 -

Total 4,70,85,950 4,14,09,349

# Provision for Excise Duty provided in earlier years on captive consumption of molasses has been written back during the

year vide Notification No. 67/95-CE.

NOTE 24: Consumption of Raw Materials

` `

Opening Stock 25,80,40,492 7,09,30,487

Add: Purchases ( Net) 194,97,07,894 375,37,86,543

220,77,48,386 382,47,17,030

Less: Closing Stock 17,92,84,043 25,80,40,492

Total 202,84,64,343 356,66,76,538

NOTE 24A: Value of imports of Raw Materials calculated on C I F basis:

` `

Coal 10,01,81,550 24,97,05,374

NOTE 24B: Comparison between consumption of Imported and Indigenous Raw Materials, during the FinancialYear

Value % Value %

`̀̀̀̀ `

Raw Materials

i) Imported 23,15,96,458 11.42 17,18,76,392 4.82

ii) Indigenous 179,68,67,885 88.58 339,48,00,146 95.18

Total 202,84,64,343 100.00 356,66,76,538 100.00






49

NOTE 24C: Particulars of Raw Materials consumed

A. Imported : ` `

1. Coal 24,64,93,994 17,18,76,391

Total (A) 24,64,93,994 17,18,76,391

B. Indigenous :1. Sugar -Sugarcane 51,43,58,537 139,85,92,046

2. Distillery Molasses (Other than own Production) 15,54,99,612 16,07,23,727

3. Aerated Water & Soft Drinks

(a) Essence 61,19,31,619 84,31,54,875

(b) Fruit Juice & Pulp 4,99,55,978 7,41,49,678

(c) Refined Sugar 38,268 -(d) Preforms 16,48,20,591 32,55,95,865

(e) Plastic Closures 3,33,73,140 4,92,53,859

(f) Co2 Gas 2,79,67,681 3,43,95,342

(g) Crowns 7,16,13,666 9,80,78,985

(h) Labels 1,51,45,144 2,10,17,153

(i) Bags 4,60,301 3,31,451

4. Packaged Drinking Water -

(a) Essence 2,83,07,266 4,10,63,835

(b) Preforms 8,68,21,620 13,58,46,124

(c) Plastic Closures 1,58,91,380 2,26,30,358

(d) Labels 57,85,546 88,11,910

5. Biomass - 1,739

6. Coal - 18,11,53,200

Total (B) 178,19,70,349 339,48,00,147

Total (A+B) 202,84,64,343 356,66,76,538

NOTE 25: Cost of Sale of Trading Goods

Opening Stock ` `

Aerated Water, Soft Drinks & 5,10,84,183 54,07,230

Packaged Drinking Water

H S D Oil & Motor Spirit 8,48,543 21,55,159

5,19,32,726 75,62,389

PurchasesAerated Water, Soft Drinks &


H S D Oil & Motor Spirit 12,12,35,241 20,34,16,357

50,05,23,034 76,03,50,917

Closing StockAerated Water, Soft Drinks &


H S D Oil & Motor Spirit 12,28,205 8,48,543

4,55,60,132 5,19,32,726

Cost of Sales 50,68,95,628 71,59,80,580

This Year (12 Months) Previous Year (18Months)

This Year (12 Months) Previous Year (18Months)

50


NOTE 26: Change in Inventories of Finished Goods and Stock-in-Process

A) Closing Stock: ` ` ` `

Finished Goods 75,40,72,666 89,04,10,125

Stock -in-Process 58,43,879 51,83,032

Total (A) 75,99,16,545 89,55,93,157

B) Opening Stock:Finished Goods 89,04,10,125 40,11,84,156

Stock-in-Process 51,83,032 51,84,680

Total (B) 89,55,93,157 40,63,68,836

Change in inventories of Finished Goods andStock in Process (B-A) 13,56,76,612 (48,92,24,321)

NOTE 27: Manufacturing Expenses

` `

Consumption of Stores and Spare Parts 10,45,86,015 19,66,87,055

Packing Materials Consumed 12,77,44,511 20,58,41,662

Power & Fuel 10,61,54,773 15,98,43,729

Repairs & Maintenance to Buildings 1,33,81,232 2,00,88,450

Repairs & Maintenance to Plant and other Assets 11,91,45,427 17,02,17,004

Insurance 79,57,766 1,47,89,439

Research & Development Expenses 80,37,087 1,05,44,583

Tools written off 33,364 4,94,496

Stores written off - 3,99,459

Total 48,70,40,175 77,89,05,877

NOTE 27a: Value of Imports of Components and Spare Parts calculated on CIF basis

` `

Capital Goods 40,92,97,711 25,33,347

Stores and Spares 1,07,66,712 3,44,52,746

NOTE 27b: Comparison between Consumption of Spare Parts and Components during the Financial Year

Spare parts and Components ` `

(debited to respective heads of account)

i) Imported 1,07,66,712 4.63 91,62,936 2.42

ii) Indigenous 22,15,63,814 95.37 39,33,65,781 97.58

Total 23,23,30,526 100.00 40,25,28,717 100.00


This Year(12 Months)

Previous Year

(18 Months)

% %




51

NOTE 28: Employee Benefit Expenses

` `

Salaries and Allowances 41,19,53,328 61,62,95,501

Company’s Contribution to Provident and other Funds 3,60,14,373 5,37,71,748

Contribution to Gratuity Fund 1,41,24,342 2,15,04,841

Workmen and Staff Welfare Expenses 2,73,31,582 4,02,74,568

Remuneration to Whole time Directors,

including Commission 4,35,60,448 3,10,81,163

Total 53,29,84,073 76,29,27,821

NOTE 28A: Employee Benefit Plans:As per Accounting Standard 15 “Employees Benefits” the disclosure of Employee Benefits as defined in the Accounting

Standard are given hereunder:

1. Defined Contribution Plans:Contributions to Defined Contribution Plans, recognized as expense for the year, are as under:


` `

Employer’s Contributions to Provident and Pension Funds 3,06,18,209 4,04,76,319

Employer’s Contributions to Employees State Insurance 17,66,075 35,76,182

Employer’s Contributions to Superannuation 90,30,361 1,47,67,777

2. Defined Benefit Plans:A. The present value of obligation is determined based on Actuarial Valuation using the Projected Unit Credit Method which

recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit

separately to build up the final obligation. The obligation for compensated absences is recognized in the same manner as

gratuity.

I. Reconciliation of Opening and Closing Balances of Defined Benefit Obligations

Gratuity Compensated (Funded) absences (Unfunded)

This year Previous year This year Previous year

(12 Months) (18 Months) (12 Months) (18 Months)

` ` ` `

Defined Benefit Obligation at beginning of the year 11,57,61,597 9,70,25,190 2,36,14,765 1,87,08,348

Interest Cost 97,32,283 1,15,93,902 14,54,988 20,22,035

Current Service Cost 92,13,535 1,05,53,155 39,81,479 41,52,330

Benefits Paid (1,44,98,679) (1,30,22,199) (99,22,143) (78,26,786)

Actuarial Loss / (Gain) on Obligation 20,99,654 96,11,549 66,26,500 65,58,838

Defined Benefit Obligation at year end 12,23,08,390 11,57,61,597 2,57,55,589 2,36,14,765


52


II. Reconciliation of Opening and Closing Balances of fair value of Plan Assets




` ` ` `

Fair Value of Plan Assets at beginning of the year 8,91,61,063 7,29,04,156 - -

Expected Return on Plan Assets 75,06,432 1,05,01,232 - -

Contributions 1,39,68,806 1,75,75,372 99,22,143 70,25,771

Benefits paid (1,69,26,002) (1,30,22,199) (99,22,143) (70,25,771)

Actuarial Loss / (Gain) on Obligation (4,29,758) 12,02,502 - -

Fair Value of Plan Assets as at the end of the year 9,32,80,542 8,91,61,063 - -

III. Reconciliation of Fair Value of Assets and Obligations as at end of the year




` ` ` `

Fair Value of Plan Assets 9,32,80,542 8,91,61,063 - -

Present Value of Obligation 12,23,08,390 11,57,61,597 2,57,55,589 2,36,14,765

Amount recognized as liability in Balance Sheet 2,90,27,848 2,66,00,534 2,57,55,589 2,36,14,765

IV. Expenses recognized during the year (in the Statement of Profit & Loss)




` ` ` `

Current Service Cost 2,15,04,841 1,05,53,155 1,27,33,203 41,52,330

Interest Cost 92,85,257 1,15,93,902 14,54,988 20,22,035

Past Service Cost - (Vested Benefits) (1,23,70,758) (9,55,035) - -

Expected Return on Plan Assets (71,31,596) (8,89,683) 66,26,500 -

Actuarial (Gain)/ Loss 25,29,411 12,02,502 - 65,58,838

Expenses recognized in the Statement of Profit & Loss 1,38,17,156 2,15,04,841 2,08,14,691 1,27,33,203


53

V. Principal Actuarial Assumptions

Gratuity Compensated(Funded) absences (Unfunded)



Discount Rate 8.00% 9.00% 7.80% To 8.00% 9.00%

Salary Escalation Rate 7.00% 7.00% 7.00% To 8.00% 7.00%

VI. As per the Enterprise’s Accounting Policy actuarial gains and losses are recognized immediately during the same year

itself.

VII.The above information is certified by the Actuary.

NOTE 29: Finance Cost

` `

Interest Expense 26,98,39,401 41,22,16,635

Bank Charges 75,80,544 98,01,929

Total 27,74,19,945 42,20,18,564

NOTE 30: Other Expenses

` ` ` `

Rent 10,31,800 13,96,654Rates and Taxes 2,50,47,568 7,81,64,634Directors’ Fees and Expenses 10,00,360 23,03,125

Auditors’ Remuneration towards: Statutory Audit 7,50,000 9,00,000 Tax Audit 2,00,000 1,25,000 Tax Matters 2,04,395 - Certification Charges 5,28,856 5,90,461Cost Audit Fee 7,07,100 5,25,000

Commission on Sales 2,00,145 3,82,068Selling & Distribution Expenses 13,71,48,655 16,81,46,202Advertisement and Publicity Expenses 4,77,16,454 5,65,76,305Donations 21,10,000 24,48,500Administrative Expenses 3,93,53,521 6,53,48,930Expenditure on Corporate Social Responsibility 32,49,357 61,60,736

Loss on Sale of Assets 20,86,586 44,038Loss on Foreign Exchange Fluctuations 29,39,029 3,99,765Bad Debts written off 1,58,456 7,89,793Less: Provision for Doubtful Debts 1,58,456 - 39,043 7,50,750Irrecoverable Advances written off 5,00,000 -Net value of Assets Discarded 3,28,59,006 2,48,30,527

Provision for Doubtful Advances & Deposits - 16,85,000Prior Period Expenses* 10,00,000 -

Total 29,86,32,832 41,07,77,695

*Investments sold during the financial year 2010-11 accounted as claim received, hence expensed.



54


NOTE 30a: Expenditure in Foreign Currency during the Financial Year

Expenditure in Foreign Currency during the ` `

Financial Year on account of travelling NIL NIL

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTSFinancial statements are prepared and presented in accordance with the Generally Accepted Accounting Principles (GAAP)

in India under historical cost convention on the accrual basis and comply all material aspects with the mandatory Accounting

Standards as prescribed under Section133 of the Companies Act, 2013 (‘Act’) read with Rule7 of the Companies (Accounts)

Rules, 2014, the provisions of the Act (to the extent notified) and the relevant provisions prescribed in the Companies Act,

1956, besides the pronouncements/ guidelines of the Institute of Chartered Accountants of India.

2. USE OF ESTIMATES:The preparation of financial statements in conformity with GAAP requires estimates and assumptions to be made that

affect the reported amount of assets and liabilities on the date of the financial statements and reported amount of revenues

and expenses during the reporting period. Although these estimates are based on the management’s best knowledge of

current events and actions, the actual outcome may be different from the estimates. Difference between actual results and

estimates are recognised in the period in which the results are known or materialise.

3. FIXED ASSETS:i) Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is net of Modvat/

Cenvat/VAT credit and is inclusive of freight, duties, taxes, incidental expenses relating to the cost of acquisition and

interest on specified borrowings till the date of commissioning and the cost of installation / erection as applicable.

ii) Direct revenue expenditure including financing cost incurred during the construction period on New / Expansion projects

is treated as expenditure during construction period and is allocated to respective fixed assets as and when capitalised.

4. CLASSIFICATION OF ASSETS AND LIABILITES AS CURRENT AND NON-CURRENT:All assets and liabilities are classified as current and non-current as per the Company’s normal operating cycle and other

criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the

acquisition of assets for processing and their realisation in cash and cash equivalents, 12 months has been considered by

the Company for the purpose of current and non-current classification of assets and liabilities.

5. INVESTMENTS:Investments are stated at cost, inclusive of all expenses relating to acquisition. Provision for diminution in the market value

of long-term investments is made, if in the opinion of the Management, such diminution is permanent in nature.

6. INVENTORIES:i) Finished Goods:

a) Sugar, Aerated Water, Industrial Alcohol and Co2 gas are valued at cost or market value whichever is lower.

b) Molasses and Bagasse which are by-products are valued at estimated realisable value.

ii) Stock in Process is valued at estimated cost of production.

iii) Raw materials, Stores, Spares, Tools and Materials-in-Transit are valued at cost.

Cost includes expenses of procurement, Excise and Customs Duties and is net of credit under Cenvat and VAT schemes.

iv) Scrap is valued at estimated realisable value.

7. REVENUE RECOGNITION:a) Sales are inclusive of Excise Duty, Export Incentives and net of trade and quantity discounts and rebates.

b) Interest income from deposits is accounted on accrual basis and dividend income from investments is accounted

when right to receive payment is established.

c) Insurance and other claims/refunds are accounted for as and when admitted by appropriate authorities

d) Inter Division transfers are eliminated in financial statements.



55

8. EMPLOYEE BENEFITS:

(i) Defined Contribution Plans.Employee Benefits in the form of Superannuation Fund, Provident Fund, ESIC and Labour Welfare Fund are considered

as Defined Contribution Plans and the contributions are charged to the Profit and Loss Account of the year when the

contributions to the respective funds are due.

(ii) Defined Benefit Plans:Company’s liabilities towards Gratuity and Leave Encashment are determined based on actuarial valuation using the

Projected Unit Credit Method as on the date of the Balance Sheet.

(iii) Actuarial gains/losses are immediately taken to Statement of Profit and Loss.

9. DEPRECIATION ON FIXED ASSETS:

(i) Depreciation is provided in the following manner using the rates arrived based on the useful lives of assets specified in

Part C of Schedule II thereto of the Companies Act, 2013 or useful lives of assets estimated by the management based

on technical advice in cases where a useful life different than the useful lives indicated in Part C of Schedule II of the

Companies Act, 2013:

a) In respect of Plant & Machinery, at all its units and Bottles and Crates in Bottling Units at Vemagiri and Kesavaram

under Straight Line Method.

b) In respect of all other assets in Bottling Unit at Kesavaram on Straight Line Method.

c) In respect of all other assets at all other units under Written Down Value Method.

(ii) Based on technical evaluation, the management believes that the useful lives as given below represent the period over

which it expects to use these assets. Hence,the useful lives for these assets is different from the useful lives as

prescribed under PartC of Schedule II of the Companies Act 2013.

Category of Assets Useful life

1. Non Factory Buildings (other than RCC frame structure) 40 Years

2. Carpeted Roads - RCC 15 Years

3. Electrical Installations 15 Years

4. Computers 5 Years

5. Fork lifters 10 Years

6. Sales Generating Assets like Refrigerators, Bottle Coolers, Stabilizers etc 7 Years

7. Glass Bottles 200ML 5 Years

8. Glass Bottles 250/300ML 10 Years

9. Plastic Crates 13 Years

(iii) The residual value of all fixed assets has been considered as 5% of the historical cost of the asset, except in case of

all sizes of glass bottles for which the management expects the residual value as 40% of the historical cost based on

the average realisation on sale of such glass bottle scrap, based on technical evaluation.

(iv) Assets costing up to `5000/- are fully depreciated in the year in which they are put to use.

10. BORROWING COSTS:Borrowing cost is charged to Profit and Loss Account except cost of specific borrowing for acquisition of qualifying assets

which is capitalised till the date of commercial use of the said asset.

11. FOREIGN CURRENCY TRASANCTIONS:Transactions on account of foreign currency are accounted for at the rates prevailing on the date of the transaction. Foreign

Currency assets and liabilities are restated at the rates prevailing as on the date of Balance Sheet. Exchange Rate

differences are dealt with in the Statement of Profit and Loss. Premium or discount on Forward Exchange Contracts are

amortised and recognised in the Statement of Profit and Loss over the period of the contract.

56


NOTE 31: Contingent Liabilities and Commitments

This Year Previous Year

(12 Months) (18 Months)

I. Contingent Liabilities not provided for: ` `

(a) Guarantees executed remaining unexpired 2,71,70,000 3,43,52,410

(b) Disputed Income Tax Demands:

(i) on account of reopening of assessments for the

Assessment Years 2005-2006 to 2008-2009 15,22,210 28,09,321

(ii) on completion of assessments for the

Assessment Year 2010-2011 2,20,48,216 2,20,48,216

(Amounts paid under protest totaling to `̀̀̀̀ 2,35,70,426/ - Previous period

` 2,48,57,537/- has been grouped under “Other Current Assets” )

(c) Disputed Sales Tax Demands (Amount paid ̀̀̀̀̀ 21,44,777/ -Previous period

` 21,44,777/-) paid under protest is grouped under “Other Current Assets” 1,23,34,904 1,10,33,221

(d) Disputed Central Excise and alleged wrong utilisation of CENVAT of

Service Tax Demands. (`̀̀̀̀ 8,03,391/- Previous period ̀ 6,98,019/-)

paid under protest is grouped under “Other Current Assets” 6,16,19,078 93,03,428

(e) Disputed Customs Duty on coal imported, against which an amount of

`̀̀̀̀ 80,80,905/- Previous period ̀ 80,80,905/- paid under protest is grouped

under “Other Current Assets” 80,80,905 80,80,905

(f) Disputed State Excise Demands on Captive Power Generation

(from July 2003 to March 2016) 3,92,66,813 3,81,34,179

II. Commitments:Estimated amount of contracts remaining to be executed on Capital

Account (net of advances given) 22,62,04,273 76,67,40,729

NOTE 32: Derivative Instruments

i) The following are the outstanding Forward Exchange Contract entered into by the Company

As at 31st March, 2016

Currency Buy/Sell No. of Foreign Amount in `Contracts Currency

(in USD)

USD Buy 2 15,35,000 10,17,01,425

As at 31st March, 2015

Currency Buy/Sell No. of Foreign Amount in `Contracts Currency

(in USD)

USD Buy 1 10,00,000 6,29,90,000

Particulars


57

ii) Unhedged Foreign Currency Exposure

The Foreign Currency Exposures that have not been specifically hedged by a derivative instrument or otherwise are

given below:

As at 31st March 2016

Particulars Euro USD `

Suppliers’ Credit 31,98,150 - 24,11,24,519

Trade Payables 2,60,000 9,000 2,01,98,995

Interest Payable 8,022 2,607 7,77,548

NOTE 33: The figures in “Statement of Profit & Loss” for the previous year are not comparable as the same are for 18

months period. Further the previous year’s figures have been regrouped, wherever necessary. Accordingly the figures for

the corresponding previous period are not comparable.

NOTE 34: Segment InformationParticulars for the year disclosed pursuant to Accounting Standard - 17 “Segment Reporting” issued by ICAI are given

hereunder:

PARTICULARS

Revenue: ` ` `

External Sales 119,95,65,031 365,08,94,266 485,04,59,297

Inter-Segment Sales 34,98,23,000 - 34,98,23,000

Total Revenue 154,93,88,031 365,08,94,266 520,02,82,297

Results:

Segment Result 11,15,96,993 51,02,29,973 62,18,26,966

Unallocated Corporate Expenses 4,72,88,360

Operating Profit 66,91,15,327

Interest Expenses 27,74,19,945

Profit before Taxation 39,16,95,383

Income Tax (including Deferred Tax) 12,25,29,800

Net Profit after Taxation 26,91,65,583

Other Information:

Segment Assets 200,68,39,067 368,21,11,493 568,89,50,560

Unallocated Corporate Assets 5,67,48,659

Total Assets 574,56,99,219

Segment Liabilities 242,03,96,645 179,62,81,531 421,66,78,176

Unallocated Corporate Liabilities (4,46,77,844)

Total Liabilities 417,20,00,332

Capital Expenditure incurred during the year 1,49,22,881 19,17,83,134 20,67,06,015

Depreciation 4,03,00,271 23,00,93,643 27,03,93,914

Non-Cash Expenditure other than Depreciation 1,10,51,517 2,68,66,468 3,79,17,985

SUGAR,INDUSTRIAL

ALCOHOL, CO2 &

CAPTIVE POWER

AERATED &TREATEDWATER

TOTAL

58


NOTE 35: PARTICULARS DISCLOSED PURSUANT TO “ACCOUNTING STANDARD - 18” RELATED PARTYDISCLOSURES

LIST OF RELATED PARTIES :

A. Key Management Personnel:

Smt. S.B.Rajarajeswaramma - Managing Director

Dr.S.B.P.P.Rammohan - Joint Managing Director

Sri S.B.P.S.Krishna Mohan - Joint Managing Director

Sri S.B.P.Madan Mohan - Executive Director

Sri S.B.P.Anand Mohan - Executive Director

B. Relatives of Key Management Personnel:

Smt.Asha Rammohan Wife of Dr.S.B.P.P.Rammohan

Smt.Nithya V Rammohan Daughter of Dr.S.B.P.P.Rammohan

Smt.S.B.Radhika Wife of Sri S.B.P.S.Krishna Mohan

Sri S.B.P.V.C.Sanjay Son of Sri S.B.P.S.Krishna Mohan

Sri S.B.P.S.Ajay Son of Sri S.B.P.S.Krishna Mohan

Smt.Radhika Mohan Wife of Sri S.B.P.Madan Mohan

Miss.Prerna Mohan Daughter of Sri S.B.P.Madan Mohan

Smt.Priyadarsini Anand Mohan Wife of Sri S.B.P.Anand Mohan

Sri S.B.Sanjeev Mohan Son of Sri S.B.P.Anand Mohan

Sri S.B.Rajiv Mohan Son of Sri S.B.P.Anand Mohan

Smt.Y.A.S.Ramalakshmi Devi Sister of four whole time Directors, other than Managing Director

C. Enterprises in which Key Management Personnel and/or their relatives have significant influence:

Sri Godavari Transport

Southern Agencies

Sarvaraya Educational Trust

Sri Sarvaraya Dharmica Vidya Trust

The Kapileswarapuram Kothavuru Annasatram


59

This Year Previous Year

(12 Months) (18 Months)

` `

A. Transactions with theKey Management Personnel:

1. Remuneration to:Smt. S.B.Rajarajeswaramma 1,08,71,205 78,06,916

Dr. S.B.P.P.Rammohan 89,47,772 67,94,243

Sri S.B.P.S.Krishna Mohan 89,08,043 63,56,852

Sri S.B.P.Madan Mohan 74,73,858 51,04,547

Sri S.B.P.Anand Mohan 73,59,571 50,18,605

2. Interest Paid on Fixed Deposits & Unsecured Loans to:Smt. S.B.Rajarajeswaramma 34,20,468 60,02,621

Dr. S.B.P.P.Rammohan 22,048 89,223

Sri S.B.P.Anand Mohan 38,660 57,617

B. Transactions with relatives of Key Management Personnel:

Interest Paid on Fixed Deposits to:Smt.Y.A.S.Ramalakshmi Devi 25,811 58,774

Sri S.B.P.S.Ajay 2,10,832 3,43,770

Smt.Nithya V Rammohan 25,105 70,276

Smt.S.B.Radhika - 85,170

Sri S.B.Sanjeev Mohan - 30,270

C. Enterprises in which Key Management Personnel and/or theirrelatives have significant influence:

1. Purchase of Goods from:Southern Agencies 16,45,795 20,87,982

2. Purchase of Fixed Assets from:Southern Agencies 1,08,772 12,28,566

3. Services received from:Sri Godavari Transport 1,57,54,193 55,56,235

Southern Agencies 1,36,56,335 1,89,13,127

4. Rent Paid:Southern Agencies 90,000 -

5. Donations Given to:Sarvaraya Educational Trust 5,00,000 8,00,000

The Kapileswarapuram Kothavuru Annasatram 6,00,000 -

Balances as at the end of the year:Trade Payables to:

Sri Godavari Transport 19,49,170 -

Southern Agencies 50,16,735 32,179

60


NOTE 36: Earning per Share:


a) Profit attributable to Equity Shareholders (`) 26,91,65,583 18,93,47,489

b) Weighted Average Number of Equity Shares 10,16,028 10,16,028

c) Earning Per Share basic and diluted (`) 264.92 186.36

d) Face value per Equity Share (`) 10 10

NOTE 37: According to internal technical assessment, there is no impairment in the carrying cost of cash generating

assets of the Company in terms of Accounting Standard on Impairment of Assets (AS 28) of the Companies (Accounting

Standards) Rules, 2006

NOTE 38:

Details of Prior Period Adjustments `

Interest paid to Banks (Debit) 10,76,930

Profit on sale of Investments (Credit) 76,930

Prior period adjustments (net Debit) 10,00,000

Note 39: Paise have been rounded off.

As per our Report of even date annexed S.B.Rajarajeswaramma On behalf of Board of Directors

For Brahmayya & Co Managing Director N.R.Sivaswamy

M.Narasimha Rao

K.Mohan Naidu

C.V. Ramana Rao S.B.P.P. Rammohan M.Subbarayudu

Partner Joint Managing Director Directors


S.B.P.S. Krishna Mohan S.B.P. Madan Mohan

Joint Managing Director Executive Director

Camp: Chennai S.B.P.Anand Mohan

Date: 26.05.2016 Executive Director


61

CASHFLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016

For 12 Months For 18 Months

ended ended

31.03.2016 31.03.2015

` ` ` `

Cashflow from Operating Activities:

Net Profit Before Tax 39,16,95,383 27,89,06,535

Adjustments for:

Depreciation charged to the Statement of Profit & Loss 31,03,12,489 30,19,06,109

Finance Costs 27,74,19,945 42,20,18,564

Interest Received (1,27,23,311) (89,66,480)

Dividend received on investments (35,383) (36,131)

Profit on Sale of Assets (46,74,666) (45,06,785)

Loss on Sale of Assets 20,86,586 44,038

Net Value of Discarded Assets 3,28,59,006 2,48,30,527

Tools Written Off 33,364 4,94,496

Stores Written Off - 3,99,459

Loss from Foreign Exchange Rate Fluctuations 29,39,029 3,99,765

Provision for Leave Encashment 21,40,824 49,06,416

Provision for Gratuity 12,13,396 24,79,500

Bad Debts Written Off 1,58,456 7,50,750

Sundry Credit Balances Written Back (1,12,635) (1,19,909)

Provisions no longer required (26,64,360) (10,16,013)

Provision for Doubtful Advances and Deposits - 16,85,000

Irrecoverable Advances Written Off 5,00,000 -

Excess Provision for Earlier Years Written Back (26,64,360) -

Excess Provision towards Excise Duty for Earlier

Years Written Back (1,24,36,155) -

59,43,52,225 74,52,69,306

Operating Profit Before Working Capital changes 98,60,47,607 102,41,75,841

Adjustments for:

Trade and Other Receivables (18,06,40,033) (4,15,84,684)

Inventories 25,42,23,262 (78,21,93,857)

Trade Payables 18,10,33,031 80,40,05,115

25,46,16,260 (1,97,73,427)

Cash generated from Operations 124,06,63,867 100,44,02,414

Less: Interest Paid (27,74,19,945) (42,20,18,564)

Income Tax Paid (12,25,29,800) (10,68,94,427)

Net Cash used in Operating Activities (A) 84,07,14,122 47,54,89,423

62


Cash Flow from Investing Activities:

Purchase of Fixed Assets (20,75,89,984) (29,83,69,213)

Change in Capital Work-in-Progress (98,19,35,323) (9,49,06,711)

Sale of Fixed Assets 3,08,74,748 6,06,84,665

Interest Received 1,27,23,311 89,66,480

Dividends Received 35,383 36,131

Net Cash used for Investing Activities (B) (114,58,91,866) (32,35,88,648)

Cash Flow from Financing Activities:

Proceeds from Borrowings (Net) 26,76,45,530 (12,46,85,345)

Dividends Paid (including Dividend Distribution Tax) (1,22,28,674) (1,22,28,674)

Net Cash generated from Financing Activities (C ) 25,54,16,856 (13,69,14,019)

Net increase/ (Decrease) in Cash and Cash Equivalents (4,97,60,887) 1,49,86,756

(A+B+C)

Cash and Cash Equivalents at the beginning of the period 12,35,50,608 10,85,63,852

Cash and Cash Equivalents at the closing of the period 7,37,89,720 12,35,50,608

As per our Report of even date annexed S.B.Rajarajeswaramma On behalf of Board of Directors

For Brahmayya & Co Managing Director N.R.Sivaswamy

M.Narasimha Rao

K.Mohan Naidu

C.V. Ramana Rao S.B.P.P. Rammohan M.Subbarayudu

Partner Joint Managing Director Directors


S.B.P.S. Krishna Mohan S.B.P. Madan Mohan

Joint Managing Director Executive Director

Camp: Chennai S.B.P.Anand Mohan

Date: 26.05.2016 Executive Director

Annual Report 2015 - 2016 - Sri Sarvaraya Sugars Ltd

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Transcript of Annual Report 2015 - 2016 - Sri Sarvaraya Sugars Ltd