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Notes to Accounts of Bannari Amman Sugars Ltd.

Mar 31, 2015

1. Terms / rights attached to equity shares

The company has issued only one class of equity shares having face value of Rs10/- each One equity share carries one vote The members are entitled to vote in accordance with their shareholding The Company declares and pays dividend in Indian rupees The dividend recommended by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting

2. Rupee term loan of Rs 9000 lakhs (Rs 6800 lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the land & building and movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III

The loan carries interest at the rate of Bank's Base rate plus 1% and repayable in 20 equal quarterly instalments starting from January 2016

The loan amount repayable within twelve months is Rs 450 lakhs (Nil) grouped under Other Current Liabilities

3. Rupee term loan of Rs 8550 Lakhs (Rs 7100 Lakhs) from State Bank of India is secured by pari passu first charge on the land & building and movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III

The loan carries Interest at the rate of Bank's Base rate plus 1% and repayable in 20 equal quarterly instalment starting from March 2015

The loan amount repayable within twelve months is Rs 1800 lakhs (Rs 400 Lakhs) grouped under Other Current Liabilities

4. Rupee term loan of Rs 2000 Lakhs (Rs 2000 Lakhs) from The Federal Bank Ltd is secured by pari passu first charge on the land & building and movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III

The loan carries Interest at the rate of Bank's Base rate plus 0.60% and repayable in 20 equal quarterly instalments starting from January 2016

The loan amount repayable within twelve months is Rs 100 lakhs (Nil) grouped under Other Current Liabilities

5. Loan from Sugar Development Fund (Government of India) availed for setting up of co-generation plant in Sugar Unit-IV amounting to Rs 2403.48 Lakhs (Rs 2403.48 lakhs) is secured by way of first charge on the movable and immovable properties of Sugar Unit IV and first pari passu charge on the movable and immovable properties of co-generation plant in Sugar Unit IV

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in ten equal half yearly installments The interest on the loan shall be paid half-yearly from the date of disbursement The loan was disbursed during the financial year 2013

The loan amount repayable within twelve months is Rs 480. 70 lakhs (Nil) grouped under Other Current Liabilities

6. Loan from Sugar Development Fund (Government of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit-II amounting to Rs 540 Lakhs (Rs 540 lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit-II

Repayment of principal commenced after the expiry of three years and in four equal annual installments The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement The loan was disbursed in two instalments of Rs 270 lakhs each The interest on the first instalment of Rs 270 lakhs disbursed during the financial year 2013 is payable annually and the interest on the second instalment of Rs 270 lakhs disbursed during the financial year 2014 is payable half yearly from the date of disbursement

The loan amount repayable within twelve months is Rs 67. 50 lakhs (Nil) grouped under Other Current Liabilities

7. Loan of Rs 7840 Lakhs (Rs 5811.58 Lakhs) under SEFASU notified by Government of India availed from Punjab National Bank HDFC Bank Ltd and Indian Overseas Bank is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I, II, III and IV

The loan availed from Punjab National Bank and HDFC Bank Ltd carries interest at the rate of 12% per annum and loan availed from Indian Overseas Bank carries interest at the rate of Bank's base rate plus 0.50% The loan is eligible interest subvention upto 12% and is repayable in 36 equal monthly instalments after the expiry of 2 years from the date of disbursement

The loan amount repayable within twelve months is Rs 218. 33 lakhs (Nil) grouped under Other Current Liabilities

8. Cash Credit and other Working Capital Limits /Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank Bank of Baroda Canara Bank The Federal Bank Ltd The Karur Vysya Bank Ltd Union Bank of India Indian Overseas Bank State Bank of Travancore State Bank of India State Bank of Hyderabad Bank of India Axis bank Ltd ICICI Bank Ltd and HDFC Bank Ltd to the company's Sugar Units are secured by way of hypothecation of current assets and other movable block assets of the sugar units and third mortgage on the immovable properties of the Sugar units

The credit limit availed as at 31.3.2015 is Rs 56945.04 Lakhs (Rs 48967.42 Lakhs)

The availed limits are repayable on demand and carries interest rates between Bank 's base rate plus 0.25% and 1% per annum

9. Packing Credit Limit and other working capital limits sanctioned by Punjab National Bank and State Bank of India to Granite Division are secured by way of hypothecation of current assets and second mortgage on other movable and immovable properties of Granite Division

The credit limit availed as at 31.3.2015 is Rs 500 Lakhs (Rs 500 Lakhs)

The credit limits availed are repayable on demand and carries interest at the rate of banks base rate plus 0.25% per annum

10. Cash Credit Limits sanctioned by Canara Bank and The Lakshmi Vilas Bank Ltd to Distillery Unit at Tamilnadu are secured by way of Hypothecation of current assets and second charge on other movable and immovable properties of the Distillery Unit in Tamilnadu

The credit limit availed as at 31.3.2015 is Rs 247.60 Lakhs (Rs 148.28 Lakhs)

The cash credit limits are repayable on demand and carries interest ranges between Bank's base rate plus 0.30% and 1.25% per annum

The Unsecured Short Term loan of Rs 5000 lakhs from HDFC Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at the rate of 10% per annum

The Unsecured Short Term loan of Rs 10000 lakhs from HDFC Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 10% per annum

The Unsecured Short Term Export Credit facility of Rs 2000 lakhs from HDFC Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 10% per annum

The Unsecured Short Term Vendor Financing/Purchase Invoice Discounting facility of Rs 2500 lakhs from Axis Bank Ltd is repayable within one hundred and twenty days from the date of availment and carries interest at the rate of 10.25% per annum

11. The Unsecured Short Term Factoring Facility for domestic receivables of Rs 2500 lakhs from Axis Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 10.50% per annum

The Unsecured Short Term Loan of Rs 4649.97 lakhs from Canara Bank is repayable in four monthly equal instalments commencing from fifth month from the date of availment and carries interest at the rate of 10.25% per annum

12. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Contingent liabilities

1 The company has preferred a Writ Appeal before the Division Bench of the Hon'ble High Court Madras challenging the Order dated 28.02.2006 in Writ Petition No 4030/2002 in connection with increase in rate of water charges and the method of computation of water charges The approximate amount under dispute is Rs 387.76 Lakhs (Rs 377.55 Lakhs)

2 Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season Chief Director (Sugar) Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim Injunction has been obtained By virtue of injunction order the entire production was sold as Free Sugar The approximate unprovided quantum under dispute is Rs 683.35 Lakhs

3 Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for a period of 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar In respect of incentive sugar sold by Unit-I from 20.09.1991to 31.01.1994 the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company The Company has filed Writ Petitions in Madras High Court and the Hon'ble High Court disposed the case with direction to submit all explanations before the adjudicating authority Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs149.99 lakhs

4 The Entry Tax of Rs 188.29 lakhs on Inter-state purchase of rough blocks is disputed

5 The Company has received a demand for payment of excise duty for Rs148.44 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance The Company has remitted the amount under protest The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon'ble High Court of Madras

6 The Company has been asked to pay Electricity Tax of 10 Paise per unit with effect from 16th June 2003 for the electricity consumed from own captive power generators at its sugar factories in Tamilnadu under Tamilnadu Tax on Consumption or Sale of Electricity Act 2003 which has been disputed by filing a Writ petition before the Hon'ble High Court of Madras The approximate quantum under dispute is Rs 1546.23 Lakhs (Rs1412.06)

7 The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction for the Assessment year 2012 -13 The quantum under dispute is Rs1579.62 Lakhs

8 As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 10317105

9 Estimated amount of contracts remaining to be executed on capital account-Tangible Assets not provided for is Rs155.10 Lakhs (Rs 3195.75 lakhs)

13. Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below

1. KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Chairman Sri B Saravanan Managing Director

2. RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Relatives

Sri B Saravanan (Son)

Sri B Saravanan Relatives

Sri S V Balasubramaniam (Father)

3. ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

Annamallai Enterprise Limited

Annamallai Retreading Company (P) Limited

Bannari Amman Exports Limited

Madras Sugars Limited

Sakthi Murugan Transports Limited

Shiva Cargo Movers Limited

Shiva Distilleries Limited

14. Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets During the year the company had reviewed the carrying value of assets for finding out impairment if any The review has revealed that there is no impairment as per Accounting Standard 28

15. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure

16. The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Alathukombai Village Sathyamangalam Taluk Erode District Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered has not been provided in the books considering the uncertainty in the realisation of the same

17. As at 31st March 2015 the company has Derivative Contracts in the nature of Forward Contract for USD 3298880 towards hedging the export receivables and there are no Derivative Contracts for speculation


Mar 31, 2014

1 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) Contingent liabilities

1.1 The company has preferred a Writ Appeal before the Division Bench of the Hon''ble High Court Madras challenging the Order pronounced in Writ Petition No 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G O No 474 dated 13.11.2001 for the water drawn for industrial purposes The approximate amount under dispute is Rs 377.55 lakhs (Rs 368.98 lakhs)

1.2 Sugar Unit I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 sugar season Chief Director (Sugar) Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained By virtue of injunction order the entire production was sold as Free Sugar The approximate unprovided quantum under dispute is Rs 683.35 lakhs (Rs 683.35 lakhs)

1.3 Sugar Unit I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for a period of 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar In respect of incentive sugar sold by Unit I from 20.09.1991 to 31.01.1994 the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs 149.99 lakhs (Rs 149.99 lakhs)

1.4 The entry tax of Rs 188.29 lakhs (Rs 188.29 lakhs) on inter-state purchase of rough blocks is disputed

1.5 The Company has received a demand for payment of excise duty for Rs 148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance The Company has remitted the amount under protest The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon''ble High Court of Madras

1.6 The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction for the Assessment years 2007 - 08 and 2011 - 12 The quantum under dispute is Rs 345.73 lakhs

1.7 As at the year end The Company has an obligation under EPCG Scheme to export sugar of a value of USD 10317105

1.8 Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs 3195.75 lakhs (Rs 13789.42 lakhs)

2 Segment Information for the year ended 31st March 2014

The Company has identified business segments as its primary segment and geographic segments as its secondary segment Business segments are primarily Sugar Power Distillery and Granite Products Revenues and expenses directly attributable to segments are reported under each reportable segment Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment Geographical revenues are allocated based on the location of the customer

3 Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below

1 KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Chairman Sri B Saravanan Managing Director

2 RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Relatives

Sri B Saravanan (Son)

Sri B Saravanan Relatives

Sri S V Balasubramaniam (Father)

3 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

Annamallai Enterprise Limited

Bannari Amman Exports Limited

Madras Sugars Limited

Shiva Cargo Movers Limited

Shiva Distilleries Limited

4 Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets During the year the company had reviewed the carrying value of assets for finding out impairment if any The review has revealed that there is no impairment as per Accounting Standard 28

5 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure

6 The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Alathukombai Village Sathyamangalam Taluk Erode District Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered has not been provided in the books considering the uncertainty in the realisation of the same

7 There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date

8 The dividend is paid to Non Resident shareholders in Indian Rupee by crediting to their Rupee Bank account


Mar 31, 2013

1.1 Rupee term loan of Rs. 2800 Lakhs (Rs.4200 Lakhs) from Axis Bank Ltd is secured by pari passu charge on the movable plant and machinery and pari passu second charge on the current assets of the Co-generation Plant at Sugar Unit IV The loan is further secured by mortgage on lands admeasuring 50.93 acres and buildings thereon pertaining to the Co-generation Plant at Sugar Unit-IV

The loan carries interest at the rate of Bank''s Base rate plus 2.25% and repayable in 20 equal quarterly instalments of Rs.350 Lakhs each starting from June 2010

Out of the above loan amount repayable within twelve months is Rs. 1400 lakhs (Rs.1400 Lakhs) is grouped under other current liabilities

1.2 The two years Corporate Loan of Rs.1875 lakhs (Rs.5625 lakhs) from Canara Bank is against assignment of receivables from Electricity Board (free from encumbrance) The loan carries interest at the rate of Bank''s Base rate plus 1% and repayable in 24 equal monthly instalments of Rs.312.50 Lakhs each starting from October 2011 Out of the above loan amount repayable within twelve months is Rs. 1875 lakhs (Rs.3750 lakhs) which is grouped under other current liabilities

1.3 Loan from Sugar Development Fund (Government of India) availed for modernisation/expansion of Sugar Unit I amounting to Rs. 465.23 Lakhs (Rs. 775.39 Lakhs) is secured by way of xclusive second charge on the movable and immovable properties of Sugar Unit I

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal and interest thereon commenced after a period of 8 years from the date of disbursement and in five equal annual instalments The loan was disbursed during the financial year 2002 Out of the above loan amount repayable within twelve months is Rs. 310.16 lakhs (Rs. 310.16 lakhs) which is grouped under other current Liabilities

1.4 Loan from Sugar Development Fund (Government of India) availed for co-generation plant in Sugar Unit IV amounting to Rs. 2403.48 Lakhs (Nil) is secured by way of first charge on the movable and immovable properties of Sugar Unit IV and first pari passu charge on the movable and immovable properties of co-generation plant in Sugar Unit IV

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in ten equal half yearly instalments The interest on the Loan shall be paid half yearly from the date of disbursement The Loan was disbursed during the financial year 2013

1.5 Loan from Sugar Development Fund (Government of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit-II amounting to Rs.270 Lakhs (Nil) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit II

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in four equal annual instalmmmmm The interest on the Loan shall be paid annually from the date of disbursement The loan was disbursed during the financial year 2013

1.6 Loan from Sugar Development Fund (Government of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit III amounting to Rs.266.40 Lakhs (Nil) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit III

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in four equal annual instalments The interest on the Loan shall be paid annually from the date of disbursement The loan was disbursed during the financial year 2013

1.7 Term Loan of Rs.38.83 Lakhs (Rs.136.84 Lakhs) under SEFASU notified by Government of India availed from Punjab

National Bank consortium consists of Punjab National Bank Bank of Baroda Canara Bank The Karur Vysya Bank Ltd Union Bank of India Indian Overseas Bank State Bank of Travancore State Bank of India State Bank of Hyderabad & Bank of India is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I II and III

The loan carries interest subvention at the rate of 12% per annum and is repayable in 24 equal instalments after the expiry of 2 years from the date of disbursement

The loan amount repayable within twelve months is Rs. 38.83 Lakhs (Rs.136.84 Lakhs) is grouped under Other Current Liabilities

2.1 Cash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank Bank of Baroda Canara Bank The Federal Bank Limited The Karur Vysya Bank Limited Union Bank of India Indian Overseas Bank State Bank of Travancore State Bank of India State Bank of Hyderabad Bank of India Axis Bank Limited ICICI Bank Limited and HDFC Bank Limited to the Company''s Sugar Units are secured by way of hypothecation of current assets and other movable block assets of the Sugar Units and third mortgage on the immovable properties of the Sugar Units

The credit limits availed as at 31.3.2013 is Rs. 29642.38 Lakhs (Rs. 19810.30 Lakhs)

The availed limits are repayable on demand and carries interest ranges between Bank''s base rate plus 0.25% and 1.75% per annum

2.2 Packing Credit Limit and other working capital limits sanctioned by Punjab National Bank and State Bank of India to Granite Division are secured by way of hypothecation of current assets and second mortgage on other movable and immovable properties of Granite Division

The credit limits availed as at 31.3.2013 is Nil (Nil)

The credit limits availed are repayable on demand and carries interest ranges between Bank''s Base Rate plus 0.75% and 1.50% per annum

2.3 Cash Credit Limits sanctioned by Canara Bank and The Lakshmi Vilas Bank Ltd to Distillery Unit in Tamilnadu are secured by way of Hypothecation of current assets and second charge on other movable and immovable properties of the Distillery Unit in Tamilnadu

The credit limits availed as at 31.3.2013 is Rs. 119.70 Lakhs (Rs. 148.39 Lakhs)

The cash credit limits are repayable on demand and carries interest ranges between Bank''s base rate plus 0.50% and 2.75% per annum

2.4 The Unsecured Short term loan of Rs. 2000 lakhs (Nil) of availment and carries interest at the rate of 10.45% per annum The Unsecured Short term loan of Rs. 5000 lakhs (Rs. 5000 Lakhs) from HDFC Bank Ltd is repayable within six months from the date of availment and carries interest at the rate of 10.60% per annum

3 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) Contingent liabilities

3.1 The company has preferred a Writ Appeal before the Division Bench of the Hon''ble High Court Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes The approximate amount under dispute is Rs. 368.98 Lakhs (Rs. 360.66 Lakhs)

3.2 Sugar Unit I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season Chief Director (Sugar) Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained By virtue of injunction order the entire production was sold as Free Sugar The approximate unprovided quantum under dispute is Rs. 683.35 Lakhs (Rs.683.35 lakhs)

3.3 Sugar Unit I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar In respect of incentive sugar sold by Unit I from 20.09.1991 to 31.01.1994, the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs.33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs.149.99 lakhs (Rs.149.99 lakhs) 29.4 The Entry Tax of Rs. 289.56 lakhs (Rs. 287.54 Lakhs) on Inter-state purchase of rough blocks is disputed

3.4 The Company has received a demand for payment of excise duty for Rs.148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance The Company has remitted the amount under protest The company opted for obtaining a valid certificate for which steps have been ta

3.5 The company has preferred an appeal before the Commissioner of Income Tax (Appeals); challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction under section 80IA of the Income Tax Act 1961 for the Assessment year 2010-11 The quantum under dispute is Rs.1684.27 Lakhs

3.6 As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 10317105 and to export granite of a value of USD 3184080

3.7 Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs. 13789.42 Lakhs (Rs. 967.87 Lakhs)

4 Segment Information for the year ended 31st March 2013

The Company has identified business segments as its primary segment and geographic segments as its secondary segment

Business segments are primarily Sugar Power Distillery and others Revenues and Expenses directly attributable to segments

are reported under each reportable segment Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment Geographical revenues are allocated based on the location of the customer

5. Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountnts of India are given below

1. KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam, Chairman Sri B Saravanan, Managing Director

2 RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam

Relatives

Sri B Saravanan (Son)

Sri S V Alagappan (Brother)

Sri S V Arumugam (Brother)

Sri B Saravanan

Relatives

Sri S V Balasubramaniam (Father)

3 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

Annamallai Retreading Company Private Limited

Annamallai Enterprise Limited

Bannari Amman Spinning Mills Limited Bannari Amman Exports Limited Madras Sugars Limited Shiva Cargo Movers Limited Shiva Distilleries Limited Shiva Texyarn Limited

6 Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets During the year the company had reviewed the carrying value of assets for finding out impairment if any The review has revealed that there is no impairment as per Accounting Standard 28

7 Previsous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure

8 The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Alathukombai Village Sathyamangalam Erode District Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered has not been provided in the books

9 There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date

10 Foreign currency exposures that are not hedged by a derivative instrument or otherwise are as under :-


Mar 31, 2012

A. Terms / rights attached to equity shares

The company has issued only one class of equity shares having face value of Rs.10/- each. O ne equity share carries one vote. The members are entitled to vote in accordance with their shareholding. The Company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting

1.1 Rupee term loan of Rs. 4200 Lakhs (Rs.5600 Lakhs) is secured by pari passu charge on the movable plant and machinery and pari passu second charge on the current assets of the Co-generation Plant at Sugar Unit IV. The loan is further secured by mortgage on lands admeasuring 50.93 acres and buildings thereon pertaining to the Co-generation Plant at Sugar Unit-IV

The loan carries interest at the rate of Bank s Base rate plus 2.25% and repay able in 20 equal quarterly installments of Rs.350 Lakhs each starting from June 2010

Out of the above loan, amount repayable within twelve months is Rs 1400 lakhs (Rs.1400 Lakhs) is grouped under other current liabilities

1.2 The two years Corporate Loan of Rs.5625 lakhs (Nil) is against assignment of receivables from Electricity Board (free from encumbrance). The loan carries interest at the rate of Bank s Base rate plus 1% and repay able in 24 equal monthly installments of Rs.312.50 Lakhs each starting from October 2011

Out of the above loan, amount repayable within twelve months is Rs 3750 lakhs (Nil) which is grouped under other current liabilities

1.3 Loan from Sugar Development Fund (Government of India) availed for modernization/expansion of sugar unit - I amounting to Rs. 775.39 Lakhs (Rs. 1085.55 Lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit - I

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and interest thereon commenced after a period of 8 years from the date of disbursement and in five equal annual installments. The loan was disbursed during the financial year 2002

Out of the above loan, amount repayable within twelve months is Rs 310.16 lakhs (Rs. 310.16 lakhs) which is grouped under other current Liabilities

1.4 Loan from Sugar Development Fund (Government of India) availed for co-generation plant in unit-II, amounting to Rs. 290.17 Lakhs (Rs.580.34 Lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit-II

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and interest thereon commenced after the expiry of three years and in ten equal half yearly installments. The Loan was disbursed during the financial year 2005

Out of the above loan, amount repayable within twelve months is Rs.290.17 lakhs (Rs.290.17 Lakhs) which is grouped under other current liabilities

1.5 Term loan of Rs. 136.84 lakhs (Rs.2379.55 Lakhs) under SEFASU notified by Government of India availed from Punjab

National Bank consortium consists of Punjab National Bank, Bank of Baroda, Canara Bank, The Karur Vysya Bank Ltd, Union Bank of India, Indian Overseas Bank, State Bank of Travancore, State Bank of India, State Bank of Hyderabad & Bank of India in secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units - I, II and III

The loan carries interest subvention at the rate of 12% per annum and is repayable in 24 equal installments after the expiry of 2 years from the date of disbursement

The loan amount repayable within twelve months is Rs 136.84 lakhs (Rs 2276.72 lakhs) is grouped under other current liabilities

2.1 C ash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank, Bank of Baroda, Canara Bank, The Federal Bank Limited, The K arur Vysya Bank Limited, Union Bank of India, Indian Overseas Bank, State Bank of Travancore, State Bank of India, State Bank of Hyderabad, Bank of India and Axis Bank Limited to the Company s Sugar Units are secured by way of hypothecation of current assets and other movable block assets of the Sugar Units and third mortgage on the immovable properties of the Sugar Units

The credit limits availed as at 31.3.2012 is Rs. 19810.30 Lakhs (Rs. 15903.49 Lakhs)

The availed limits are repayable on demand and carries interest ranges between Bank's base rate plus 0.50% and 3% per annum

2.2 Packing Credit Limit and other working capital limits sanctioned by Punjab National Bank and State Bank of India to Granite Division are secured by way of hypothecation of current assets and second mortgage on other movable and immovable properties of Granite Division

The credit limits availed as at 31.3.2012 is Nil (Rs. 83.78 lakhs)

The credit limits availed are repayable on demand and carries interest ranges between Bank s Base Rate plus 0.75% and 1.50% per annum

2.3 Cash Credit Limits sanctioned by Canara Bank and The Lakshmi Vilas Bank Ltd to Distillery Unit in Tamilnadu are secured by way of hypothecation of current assets and second charge on other movable and immovable properties of the Distillery

Unit in Tamilnadu

The credit limits availed as at 31.3.2012 is Rs. 148.39 Lakhs (Nil)

The cash credit limits are repayable on demand and carries interest ranges between Bank's base rate plus 0.85% and 1 % per annum

2.4 The Unsecured Short term loan of Rs. 3300 lakhs (Nil) from Rabo Bank is repayable within six months from the date of a ailment and carries interest at the rate of 10.95% per annum

The Unsecured Short term loan of Rs. 5000 lakhs (Nil) from HDFC Bank Ltd is repayable within six months from the date of a ailment and carries interest at the rate of 11% per annum

The Unsecured Short term loan of Rs. 8000 lakhs (Rs.7000 Lakhs) from Axis Bank Ltd is repayable within six months from the date of a ailment and carries interest at the rate of 10.50% per annum

The Unsecured Short term loan availed from Yes Bank was repaid in full (Rs.6000 lakhs)

The Unsecured Overdraft loan of Rs.267.24 Lakhs (Rs.2483.60 L akhs) from ICICI Bank Ltd is repayable on demand and carries interest at the rate of Base rate plus 1.75% per annum

The Unsecured Cash Credit loan of Rs.900.64 Lakhs (Nil) from IDBI Bank Ltd is repayable on demand and carries interest at Base rate plus 1% per annum

The vendors of the Company are yet to submit their status under Micro, Small and Medium Enterprises; hence the relevant information is not available with the company. Accordingly no disclosures relating to Micro, Small and Medium Enterprises have been made in the Accounts.

3. Contingent liabilities and commitments (to the extent not provided for) Contingent liabilities

3.1. The company has preferred a Writ Appeal before the Division Bench of the Humble High Court, Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs. 360.66 Lakhs (Rs. 352.34 Lakhs)

3.2. Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 S sugar Season. Chief Director (Sugar), Directorate of Sugar, Department of Food, New Delhi, has restricted the entitlement of Free sale Sugar Incentive to 2,75,000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar. The approximate unprovoked quantum under dispute is Rs. 683.35 Lakhs (Rs.683.35 lakhs).

3.3. Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the sugar production as free sugar for 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar. In respect of incentive sugar sold by Unit-I from 20.09.1991 to 31.01.1994 , the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs.33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company. The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority. Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs.149.99 lakhs (Rs.149.99 lakhs).

3.4. The Entry Tax of Rs. 287.54 lakhs (Rs. 284.78 Lakhs) on Inter-state purchase of rough blocks is disputed

3.5. The Company has received a demand for payment of excise duty for Rs.148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ Petition filed in Honble High Court of Madras.

3.6. The Company has been asked to pay Electricity Tax of 10 Paise per unit with effect from 16th June 2003 for the electricity consumed from own captive power generators which has been disputed by filing a Writ Petition before the Hon'ble High Court of Madras. The approximate quantum under dispute is Rs. 213.85 Lakhs (Rs.194.02 Lakhs).

3.7. The company has preferred an appeal before the Commissioner of Income Tax (Appeals); challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction under section 80IA of the Income Tax Act, 1961 for the assessment year 2009-10. The quantum under dispute is Rs.695.40 Lakhs.

3.8. As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 97,25,647 and to export granite of a value of USD 79,87,176.

3.9. Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs. 967.87 Lakhs (Rs. 1134.56 lakhs).

4. Segment Information for the year ended 31st March 2012

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily Sugar, Power, Distillery and others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts. Income or Expenses which are not attributable or allocable to segments have been disclosed as unallowable Income / Expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Geographical revenues are allocated based on the location of the customer.

5. Related Party disclosures as required under Accounting Standard on "Related Party Disclosures issued by the Institute of Chartered Accountants of India are given below.

1. KEY MANAGEMENT PERSONNEL :

- Sri S V Bala subramaniam, Chairman

- Sri B Saravanan, Managing Director

2. RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Bala subramaniam Relatives :

(1) Sri B Saravanan (Son)

(2) Sri S V Alagappan (B rother)

(3) Dr S V Kandasami (B rother)

(4) Sri S V A rumugam (Brother)

Sri B S aravanan Relatives:

Sri S V Bala subramaniam (Father)

3. ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

1. Annamallai Retreading Company (P) Limited

2. Annamallai Enterprise (P) Limited

3. Bannari Amman Spinning Mills Limited

4. Bannari Amman Exports Limited

5. Madras Sugars Limited

6. Shiva Cargo Movers Limited

7. Shiva Distilleries Limited

8. Shiva Texyarn Limited

9. Vedanayagam Hospital Limited

6. Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets - During the year, the company had reviewed the carrying value of assets for finding out impairment if any. The review has revealed that there is no impairment as per Accounting Standard 28.

7 . The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year s figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure.

8. The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Al athukombai Village, Sathyamangalam, Erode District, Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered, has not been provided in the books, considering the uncertainty in the realization of the same.

9. There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date.


Mar 31, 2011

1 Sugar Development Fund Loan of Rs 134.95 Lakhs (Rs 134.95 Lakhs) is guaranteed by State Bank of Travancore on counter guarantee of the company

2 (a) The company has not received information from vendors regarding their status under Micro, Small and Medium

Enterprises Development Act, 2006 and disclosures relating to their outstanding amount and interest has not been made

(b) Amount credited to Investor Education and Protection Fund as on 31.03.2011 is Rs Nil (Nil)

3 Estimated amount of contracts remaining to be executed on capital account not provided for is Rs 1134.56 Lakhs (Rs 2284.66 lakhs)

4 The annual increase in the rate of power charges for supplies made from 20 MW co-generation plant at Alathukombai Village, Sathyamangalam Taluk, Erode District, Tamilnadu to Tamilnadu Electricity Board as prescribed in the power purchase agreement entered, has not been provided in the books, considering the uncertainty in the realisation of the same

5 Contingent Liabilities

(a) The company has preferred a Writ Appeal before the Division Bench of the Hon'ble High Court, Madras challenging the order pronounced in Writ Petition No. 4030/2002 dated 28.2.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs 352.34 Lakhs (Rs 344.01 Lakhs)

(b) Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 sugar season. Chief Director (Sugar), Directorate of Sugar, Department of Food, New Delhi, has restricted the entitlement of free sale sugar incentive to 2,75,000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as free sugar. The approximate unprovided quantum under dispute is Rs. 683.35 Lakhs (Rs 683.35 Lakhs)

(c) Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the sugar production as free sugar for 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar. In respect of incentive sugar sold by unit-I from 20.9.1991 to 31.1.1994, the Central Excise Department has issued show cause notices to the company to show cause why the difference of Rs 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the company. The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority. Now the matter is pending before the adjudicating authority. The excise duty in dispute is Rs149.99 lakhs (Rs149.99 lakhs)

(d) The Entry tax of Rs 284.78 lakhs (Rs 268.80 Lakhs) on Inter-state purchase of rough blocks is disputed

(e) The Company has received a demand for payment of excise duty for Rs148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a Writ Petition filed in Hon'ble High Court of Madras

(f) The Company has been asked to pay Electricity tax of 10 Paise per unit with effect from 16th June 2003 for the electricity consumed from own captive power generators which has been disputed by filing a Writ Petition before the Hon'ble High Court of Madras. The approximate quantum under dispute is Rs 194.02 Lakhs (Rs 173.82 Lakhs)

(g) The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction under section 80IA of the Income Tax Act 1961 for the assessment year 2008-09. The quantum under dispute is Rs 404.85 Lakhs

(h) As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 9725647 and to export granite of a value of USD 4517414

6 (a) There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date

7 Disclosure pursuant to Accounting Standard 28 (AS 28) on impairment of assets - During the year, the company had reviewed the carrying value of assets for finding out impairment if any. The review has revealed that there is no impairment as per AS 28

8 Amount due from Directors is Nil (Nil ). Maximum amount due from Directors during the year is Nil (Nil)

9 Amount due from officers of the company is Rs 4.98 Lakhs (Rs 11.72 Lakhs). Maximum amount due from officers of the company during the year is Rs 11.00 Lakhs (Rs 12.48 Lakhs)

10 Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below

1 Key Management Personnel

Sri S V Balasubramaniam, Chairman Sri B Saravanan, Managing Director

2 Relatives of Key Management Personnel

Sri S V Balasubramaniam

Relatives :

(1) Sri B Saravanan - Son

(2)Sri S V Alagappan - Brother

(3)Dr S V Kandasami - Brother

(4) Sri S V Arumugam - Brother

Sri B Saravanan

Relatives

(1) Sri S V Balasubramaniam -Father

3 Enterprises over which Key Management Personnel or their Relatives are able to exercise significant influence

1 Annamallai Retreading Company (P) Limited

2 Madras Sugars Limited

3 Anamallais Automobiles (P) Limited

4 Bannari Amman Spinning Mills Limited

5 Shiva Distilleries Limited

6 Vedanayagam Hospital Limited

7 Shiva Texyarn Limited

Notes : (1) Remuneration to key management personnel is disclosed in Schedule No. 17 (read with item No. 14 in notes attached to and forming part of accounts)

(2) Sitting fees to Directors is disclosed in Schedule No. 17

(3) Balance outstanding as on 31st March 2011 is Nil (Nil)

18 Earnings per share

(a) Weighted average number of equity shares of Rs.10/-each (i) Number of shares at the beginning of the year

(ii) Number of shares at the end of the year

Weighted average number of equity shares outstanding during the year

(b) Net Profit after tax available for equity shareholders (Rs in Lakhs)

(c) Basic and diluted earnings per share (Rs)

11 Figures for the previous year have been suitably regrouped wherever necessary to confirm to this year's classification

 
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