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Oudh Sugar Mills
BSE: 507260|NSE: OUDHSUG|ISIN: INE594A01014|SECTOR: Sugar
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« Jun 11
Notes to Accounts Year End : Jun '12
1.  CORPORATE INFORMATION
 
 The Oudh Sugar Mills Limited (the Company) is a public limited Company
 domiciled in India and an existing company under the provisions of the
 Companies Act, 1956. Its shares are listed on two stock exchanges in
 India. The Company is primarily engaged in manufacture and sale of
 Sugar and its By-products (Molasses and Bagasse), Spirits including
 Ethanol, Power and Food Processing Products. The Company presently has
 manufacturing facilities at Hargaon District Sitapur, Dhadha Bujurg
 District Kushinagar, Rosa District Shahjahanpur and Allahabad in the
 State of Uttar Pradesh and at Narkatiaganj District West Champaran in
 the State of Bihar.
 
 2.  BASIS OF PREPARATION
 
 The financial statements of the Company have been prepared in
 accordance with generally accepted accounting principles in India
 (Indian GAAP). The Company has prepared these financial statements to
 comply in all material respects with the Accounting Standards notifi ed
 under the Companies (Accounting Standards) Rules, 2006, (as amended)
 and the relevant provisions of the Companies Act, 1956. The financial
 statements have been prepared on an accrual basis and under the
 historical cost convention.
 
 The accounting policies adopted in the preparation of financial
 statements are consistent with those used in the previous year, except
 for the change in accounting policy explained in 2.1 (a) below.
 
 (a) Terms / rights attached to Equity Shares
 
 Each holder of equity shares is entitled to one vote per share.
 
 In the event of liquidation of the Company, the holders of equity
 shares will be entitled to receive remaining assets of the Company,
 after distribution of all preferential amounts. The distribution to
 equity shareholders will be in proportion to the amount paid up or
 credited as paid up.
 
 (b) Terms of redemption of Preference Shares
 
 The Non-Convertible Cumulative Redeemable Preference Shares (CRPS)
 issued during the year carries dividend @ 8.5% per annum.
 
 CRPS shall be redeemable at par upon expiry of a period of twelve years
 and one day from the date of allotment i.e. 1st August 2011 with a
 right vested to the Board of Directors to redeem earlier, subject to
 the consent of the lenders. However, no redemption will take place
 before 30th June 2014.
 
 Dividend is payable at the time of redemption of the CRPS. However, the
 Board reserves the right to pay the dividend arlier with the consent of
 the Lenders and subject to the availability of profit.
 
 (a) Term Loans and FITL from Banks carry interest rate in the range of
 13.77% to 14.99%. The loans are repayable in quarterly instalments
 starting from 30th September, 2012 and are secured by first mortgage /
 charge on all the immovable and movable assets (save and except book
 debts), present and future, of the Company''s Sugar Units at Hargaon,
 Narkatiaganj and Dhadha Bujurg (Hata) and Distillery Unit at Hargaon,
 ranking pari-passu amongst the various lenders, subject to prior
 charges created on movables for working capital borrowings from the
 Company''s bankers.
 
 The above Term Loans including FITL are further secured as follows.
 
 (i) - Second charge on current assets of Sugar Unit at Dhadha Bujurg
 (Hata) ranking pari-passu amongst the various lenders.
 
 - Second charge on fixed assets of Sugar Unit at Rosa ranking
 pari-passu amongst the various lenders.
 
 (ii) Third charge on current assets of Sugar Unit at Narkatiaganj.
 
 (iii) Third charge on current assets of Sugar & Distillery Units at
 Hargaon.
 
 (iv) Pledge of 64,79,294 equity shares of the Company held by promoter
 group companies, ranking pari-passu amongst the various lenders.
 
 (b) Term loans under Financial Assistance Scheme (Excise Duty Loan)
 were secured by a residual charge on entire Fixed Assets (movable and
 immovable), present and future of the Company''s Sugar units at Hargaon,
 Rosa and Narkatiaganj.  The said loan has been repaid during the year
 as per the stipulated terms of repayments.
 
 (c) Term loans from the Sugar Development Fund, carry interest of 4%
 p.a., are secured by a second charge on all the immovable / movable
 assets (save and except book debts) present and future of the Company''s
 Sugar Units at Hargaon and Narkatiaganj.
 
 3.  LEASES
 
 Operating lease :
 
 Certain office premises, godowns, cane purchasing centre etc. are held
 on operating lease. The lease term is ranging upto 3 years and
 renewable for further year either mutually or at the option of the
 Company. There is no escalation clause in the lease agreement. There
 are no restrictions imposed by lease agreements. There are no
 subleases. The leases are cancellable.
 
 4.
 
 Bearer Equity Share Coupons having a realised value of 0.06 lacs (30th
 June, 2011 : 0.06 lacs) has been shown separately under Shareholders''
 Funds as the holders of such coupons are yet to tender coupon
 certifcates to claim the underlying security i.e. equity shares of
 equal paid up value.
 
 5.
 
 The Company had received Preference Share Application Money 3,750 lacs
 during the year ended 30 June 2011 against 8.5% Non-Convertible
 Cumulative Redeemable Preference Shares (CRPS) of 10 each to be issued
 at par. The Company has issued, during the reporting year, CRPS against
 the said share application money.
 
 6.
 
 During the year, Company has paid 2,422.19 lacs towards differential
 cane price for its Hargaon and Rosa Sugar units in Uttar Pradesh for
 the sugar season 2007-08 in term of the order of the Hon''ble Supreme
 Court dated 17th January, 2012, which has been shown as Exceptional
 Item in the statement of profit and loss.
 
 7.  SEGMENT INFORMATION
 
 The primary segment reporting format is determined to be business
 segments as the Company''s risks and rates of return are affected
 predominantly by differences in the products produced. Secondary
 information is reported geographically. The operating businesses are
 organised and managed separately according to the nature of the
 products and services provided, with each segment representing a
 strategic business unit that offers different products and serves
 different markets. Accordingly, the Company has identified Sugar,
 Spirits, Co-generation and Food processing as the operating
 segments:
 
 Sugar - Consists of manufacture, trading and sale of Sugar, Molasses
 and Bagasse
 
 Spirits - Consists of manufacture and sale of Industrial Spirits
 (including Ethanol), Fusel Oil and Bio-Compost
 
 Co-generation - Consists of generation and transmission of Power
 
 Food Processing Products - Consists of Canned Fruits and Vegetables,
 Jams, Jellies, Squashes and Juices
 
 Others - Consist of Miscellaneous business comprising of less than 10%
 revenues.
 
 The Company primarily operates in India and therefore the analysis of
 geographical segments is demarcated into its Indian and Overseas
 Operations.
Source : Dion Global Solutions Limited
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