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Notes to Accounts of DCM Shriram Industries Ltd.

Mar 31, 2015

I. Banks

a) Nil (2013-14 - Rs. 200.00 lacs), Rs. 141.00 lacs (2013-14 - Rs. 713.00 lacs), Rs.1250.00 lacs (2013-14 - Rs.1875.00 lacs), Rs.1178.13 lacs (2013-14 - Rs. 1450.00 lacs) and Rs.1050.00 lacs (2013-14 - Rs. 276.33 lacs) currently carrying interest between 7.75% to 13.00% (net of interest subvention) and repayable in 0, 1,8, 13 and 20 quarterly installments respectively are secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of existing first charge holders for their respective term loans.

b) Rs. 555.33 lacs (2013-14 - Rs. 1025.92 lacs) carrying interest of 12.50% and repayable in 5 quarterly installments is secured by first pari-passu charge on entire fixed assets of the Company, both present and future, excluding the assets exclusively charged and those pertaining to Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of existing first charge holders for their respective term loans / debentures. Also exclusive charge on assets to be acquired in Daurala Organics, a unit of the Company.

c) Nil (2013-14 - Rs.163.71 lacs), Rs. 240.00 lacs (2013-14 - Rs. 360.00 lacs), Rs. 840.00 lacs (2013-14 - Rs. 1120.00 lacs) and Rs. 721.87 lacs (2013-14 - Rs. 414.88 lacs) currently carrying interest between 7.50% to 12.75% (net of interest subvention) and repayable in 0, 8, 12 and 14 quarterly installments respectively are secured by first charge on specific movable assets of Shriram Rayons, a unit of the Company.

d) Rs. 81.00 lacs (2013-14 - Rs. 231.00 lacs) currently carrying interest of 14.25% repayable in 3 quarterly installments is secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of existing first charge holders for their respective term loans.

e) Rs. 459.92 lacs (2013-14 - Rs.124.46 lacs) currently carrying interest of 12.50% repayable in 14 quarterly installments is secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, both present and future, excluding the assets exclusively charged subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of existing first charge holders for their respective term loans.

f) Rs. 1900.00 lacs (2013-14 - Rs.1900.00 lacs) and Rs. 235.00 lacs (2013-14 - Nil) carrying Nil interest (net of interest subvention) repayable in 36 monthly installments is secured by residual charge on fixed assets of sugar factory at Daurala Sugar Works, a unit of the Company.

g) Rs. 1560.00 lacs (2013-14 -Nil) carrying Nil interest (net of interest subvention) repayable in 12 quarterly installments is secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of existing first charge holders for their respective term loans and 2nd pari-passu charge on all current assets of sugar division of the company excluding stocks pledged with Distt. Co-operative Banks.

h) Rs. 17.90 lacs (2013-14 - Rs. 24.72 lacs) currently carrying interest of 11.25% repayable in 38 monthly installments are secured by hypothecation of specific assets.

II. Others

Rs. 721.98 lacs (2013-14 - Rs.1082.97 lacs) carrying interest of 4% and repayable in 2 yearly installments is secured by exclusive second charge on immovable and movable assets of sugar factory at Daurala Sugar Works, a unit of the Company.

2. Provision for contingencies of Rs. 100 lacs (2013-14 Rs. 100 lacs) in Note 7 represents the maximum possible exposur on ultimate settlement of issues relating to reorganisation arrangement of the Company.

As at As at 31.03.2015 31.03.2014

3. Contingent liabilities not provided for:- (Rs. lacs) (Rs. lacs)

a) Income tax matters* 196.55 196.55

b) Excise and Service tax matters* 388.74 122.08

c) Claims against the Company not acknowledged as debts (excluding claims by employees, where amount is not ascertainable)* 773.03 784.04

d) Bills discounted 3635.81 3045.21

* Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position.

4. a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounts to Rs. 104.73 lacs (2013-14 - Rs. 1216.15 lacs).

b) The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreement in normal course of business. The Company does not have any long term commitments / contracts including derivative contracts for which there will be any material foreseeable losses.

5. Research and development expenses amounting to Rs. 146.50 lacs (2013-14 - Rs. 128.63 lacs) have been charged to the respective revenue accounts. Capital expenditure relating to research and development amounting to Rs. 58.76 lacs (2013-14 - Rs. 30.04 lacs) has been included in fixed assets.

6. Parties covered under "The Micro, Small and Medium Enterprise Development Act, 2006" (MSMED Act, 2006) have been identified on the basis of confirmation received.

Based upon the information available, the balance due to the Micro and Small Enterprises as defined under the MSMED Act, 2006 is Rs. 1.35 lacs (2013-14 - Nil). Further no interest during the year has been paid or is payable under the terms of the MSMED Act, 2006.

7. Segment reporting

A. Business segments

Based on the guiding principles given in Accounting Standard (AS) 17 "Segment Reporting" as notified under the Companies (Accounting Standards) Rules, 2006, the Company's business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yarn, cord, fabric etc.) and Chemicals (comprising Organics & Fine Chemicals).

B. Geographical segments

The Company's geographical segments are Domestic and Overseas, by location of customers.

C. Segment accounting policies

In addition to the significant accounting policies applicable to the segments as set out in note 1 of notes forming part of the financial statement, the accounting policies in relation to segment accounting are as under :-

i) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities allocable to two or more segments are allocated to the segments on a reasonable basis.

ii) Segment revenue and expenses

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segment.

iii) Unallocated expenses

Unallocated expenses represent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results.

iv) Inter segment sales

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

A. Names of related parties and nature of related party relationship

Subsidiary : Daurala Foods & Beverages Private Limited (DFBPL).

Associate : DCM Hyundai Limited (DHL).

Key management personnel : Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr. D.C. Mittal (upto 30/06/2014), Mr. Madhav B. Shriram, Mr. Anil Gujral (upto 31/01/2014) and Mr. K. N. Rao (w.e.f. 01/02/2014).

Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs. Kiran Mittal (upto 30/06/2014), Mr. Akshay Dhar, Ms. Kanika Shriram, Mrs. Divya Shriram, Ms. Aditi Dhar, Ms. Ritu Bansal (upto 30/06/2014), Mr. Rudra Shriram (w.e.f. 22/08/2013), Mrs. K. Rao (w.e.f. 01/02/2014) and M/s. Bansi Dhar & Sons - HUF (BDS).

Others (Enterprise over which key management personnel or their relatives are able to exercise significant influence) : Bantam Enterprises Private Limited (BEPL) and H.R. Travels Private Limited (HRTPL).

B. Transactions with related parties referred to in 38 (A)

i) Transactions with subsidiary and associate

i) The Company has entered into operating leases agreements for various premises taken for accommodation of Company's officers / directors and various offices of the Company. As at March 31,2015 the future minimum lease payments under non- cancellable period which is not later than one year are Rs. Nil (2013-14 - Rs. Nil).

ii) Lease rent charged to the Statement of Profit & Loss relating to operating leases entered or renewed after April 1,2001 are Rs. 502.33 lacs (2013-14 - Rs. 468.74 lacs).

8. Proceedings in a Petition filed by a shareholder before the Hon'ble Company Law Board (CLB) u/s 397/398 of the Companies Act, 1956 in November 2007, challenging the preferential issue of equity warrants by the Company, are continuing.

9. Employee benefits

a) Defined contribution plans

Rs. 642.24 lacs (2013-14 - Rs. 577.30 lacs) for provident fund contribution and Rs.154.96 lacs (2013-14 -

Rs. 140.67 lacs) for superannuation fund contribution have been charged to the Statement of Profit and Loss.

The contributions towards these schemes are at rates specified in the rules of the schemes. In case of provident fund administered through a trust, shortfall if any, shall be made good by the Company.

b) Defined benefit plans

i) Liability for gratuity, privilege leaves and medical leaves is determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in the gratuity fund.

ii) Gratuity Scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.

10. The Government of Uttar Pradesh has announced subsidy on sugar cane purchased during the sugar season 2014-15 linked to average selling price of sugar and its by-products during the period 1st October, 2014 to 31st May, 2015 to be finalised by a Committee to be constituted by the Government of Uttar Pradesh. Based on prevailing and expected prices, the Company is confident of realising the full subsidy of Rs. 28.60 per qtl. aggregating to Rs. 3972.41 lacs. Pending final determination of the amount of subsidy, the company has on a conservative basis accounted for Rs. 3277.93 lacs in the Statement of Profit & Loss for the year by adjustment of raw material consumption in note 23. Necessary adjustments would be made on final determination of the amount of subsidy.

11. Schedule II of the Companies Act, 2013 became applicable w.e.f. April 1,2014. Accordingly :

a) depreciation for the year computed in accordance with the useful life of fixed assets as prescribed in Schedule II is lower by Rs. 530.37 lacs and Rs. 138.62 lacs, being an amount equivalent to the additional charge arising due to revaluation has been transferred from Revaluation reserve to General reserve.

b) in respect of fixed assets where the remaining useful life as per Schedule II is Nil, the carrying amount (after retaining residual value) of Rs. 556.06 lacs (including revalued amount Rs. 316.94 lacs and net of deferred tax Rs. 123.13 lacs) has been adjusted against the opening balance of Surplus in Statement of Profit & Loss and the revalued amount has been transferred from Revaluation reserve to General reserve.

12. Previous year's figures have been regrouped / recast wherever necessary to correspond with the current year's classification / disclosures.


Mar 31, 2014

As at As at 31.03.2014 31.03.2013

1. Contingent liabilities not provided for:- (Rs. lacs) (Rs. lacs)

Income tax matters* 196.55 193.40

Excise / Service tax / Customs duty matters* 122.08 759.35 Claims against the Company not acknowledged as debts (excluding claims by employees, where amount is not ascertainable)* 784.04 1069.60

Bills discounted 3045.21 2729.45

* Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position.

2. a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounts to Rs. 1216.15 lacs (2012-13 - Rs. 297.66 lacs).

b) The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreement in normal course of business. The Company does not have any long term commitments or material non-cancellable contractual commitments / contracts, which might have material impact on the financial statements.

3. Research and development expenses amounting to Rs. 128.63 lacs (2012-13 - Rs. 113.67 lacs) have been charged to the respective revenue accounts. Capital expenditure relating to research and development amounting to Rs. 30.04 lacs (2012-13 - Rs. 53.27 lacs) has been included in fixed assets.

4. Parties covered under "The Micro, Small and Medium Enterprise Development Act, 2006" (MSMED Act, 2006) have been identified on the basis of confirmations received.

Based upon the information available, the balance due to the Micro and Small Enterprises as Defined under the MSMED Act, 2006 is Nil (2012-13 - Nil). Further no interest during the year has been paid or payable under the terms of the MSMED Act, 2006.

5. Segment reporting

A. Business segments

Based on the guiding principles given in Accounting Standard (AS) 17 "Segment Reporting" as notifed under the Companies (Accounting Standards) Rules, 2006, the Company''s business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yarn, cord, fabric etc.) and Chemicals (comprising Organics & fne Chemicals).

B. Geographical segments

The Company''s geographical segments are Domestic and Overseas, by location of customers.

C. Segment accounting policies

In addition to the significant accounting policies applicable to the segments as set out in note 1 of notes forming part of the financial statements, the accounting policies in relation to segment accounting are as under :-

i) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities allocable to two or more segments are allocated to the segments on a reasonable basis.

ii) Segment revenue and expenses

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segment.

iii) Unallocated expenses

Unallocated expenses represent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results.

iv) Inter segment sales

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

6. Related party disclosures under Accounting Standard (AS)18

A. Names of related parties and nature of related party relationship

Subsidiary : Daurala Foods & Beverages Private Limited (DFBPL)

Associate : DCM Hyundai Limited (DHL).

Key management personnel : Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr. D.C. Mittal, Mr. Madhav B. Shriram, Mr. Anil Gujral (upto 31/01/2014) and Mr. K. N. Rao (w.e.f. 01/02/2014).

Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs. Kiran Mittal, Mr. Akshay Dhar, Ms. Kanika Shriram, Mrs. Divya Shriram, Ms. Aditi Dhar, Ms. Ritu Bansal, Mr. Rudra Shriram (w.e.f. 22/08/2013), Mrs. K. Rao (w.e.f. 01/02/2014) and M/s. Bansi Dhar & Sons - HUF (BDS).

Others (Enterprises over which key management personnel or their relatives are able to exercise significant infuence): Bantam Enterprises Private Limited (BEPL) and H.R. Travels Private Limited (HRTPL).

7. The Company does not have any Finance Lease. Disclosures in respect of assets taken on Operating Lease under Accounting Standard (AS) 19 "Leases" is as under:

i) The Company has entered into operating leases agreements for various premises taken for accommodation of Company''s officers / directors and various offices of the Company. As at March 31, 2014 the future minimum lease payments under non- cancellable period which is not later than one year are Rs. Nil (2012-13 - Rs. 58.64 lacs).

ii) Lease rent charged to the Statement of profit & Loss relating to operating leases entered or renewed after April 1, 2001 are Rs. 468.00 lacs (2012-13 - Rs. 448.85 lacs).

8. Proceedings in a Petition fled by a shareholder before the Hon''ble Company Law Board (CLB) u/s 397/398 of the Companies Act, 1956 in November 2007, challenging the preferential issue of equity warrants by the Company, are continuing.

9. Employee benefits

a) Defined contribution plans

Rs. 577.30 lacs (2012-13 - Rs. 512.86 lacs) for provident fund contribution and Rs.140.67 lacs (2012-13 - Rs. 186.09 lacs) for superannuation fund contribution have been charged to the Statement of profit and Loss. The contributions towards these schemes are at rates specified in the rules of the schemes. In case of provident fund administered through a trust, shortfall if any, shall be made good by the Company.

b) Defined benefit plans

i) Liability for gratuity, privilege leaves and medical leaves is determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in the gratuity fund.

ii) Gratuity Scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.


Mar 31, 2013

1. A) Pursuant to the Scheme of Arrangement as approved by the High Court of Delhi vide its Order dated April 16, 1990 under sections 391 / 394 of the Companies Act, 1956, assets and liabilities relating to certain units and certain reserves of the undivided DCM Limited were transferred /allocated to the Company w.e.f. April 1,1990, being the effective date; Theexcess of net assets acquired over the share capital and reserves had been transferred to the securities premium account. b) There are various issues relating to sales tax, income-tax, interest, etc. arisen / arising out of the reorganisation arrangement which will be settled and accounted for in terms of the Scheme of Arrangement of DCM Limited as and when the liabilities / benefits are finally determined. The ultimate effect of these is not ascertainable at this stage.

As at As at 31.03.2013 31.03.2012

2. Contingent liabilities not provided for:- (Rs. lacs) (Rs. lacs)

Income tax matters* 193.40 1661.60

Excise / Service tax / Customs duty matters* 759.35 734.79 Claims against the Company not acknowledged as debts

(excluding claims by employees, where amount is not ascertainable)* 1069.60 1025.54

Bills discounted 2729.45 2336.53

* Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position.

3. a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounts to Rs. 297.66 lacs (2011-12 - Rs. 104.02 lacs).

b) The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee''s benefits including union agreement in normal course of business. The Company does not have any long term commitments or material non-cancellable contractual commitments / contracts, which might have material impact on the financial statements.

4. Research and development expenses amounting to Rs. 113.67 lacs (2011 -12 - Rs. 90.52 lacs) have been charged to the respective revenue accounts. Capital expenditure relating to research and development amounting to Rs. 53.27 lacs (2011-12 - Rs. 28.32 lacs) has been included in fixed assets.

5. Parties covered under "The Micro, Small and Medium Enterprise Development Act, 2006" (MSMED Act, 2006) have been identified on the basis of confirmation received.

Based upon the information available, the balance due to the Micro and Small Enterprises as defined under the MSMED Act, 2006 is Nil (2011-12 - Nil). Further no interest during the year has been paid or payable under the terms of the MSMED Act, 2006.

6. Segment reporting

A. Business segments

Based on the guiding principles given in Accounting Standard (AS) 17 "Segment Reporting" as notified under the Companies (Accounting Standards) Rules, 2006, the Company''s business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yam, cord, fabric etc.) and Chemicals (comprising Organics & fine Chemicals).

B. Geographical segments

The Company''s geographical segments are Domestic and Overseas, by location of customers.

C. Segment accounting policies

In addition to the significant accounting policies applicable to the segments as set out in note 1 of notes forming part of the financial statement, the accounting policies in relation to segment accounting are as under :-

i) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include aU operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities allocable to two or more segments are allocated to the segments on a reasonable basis.

ii) Segment revenue and expenses

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and.expenses are directly attributable to the segment.

iii) Unallocated expenses

Unallocated expenses represent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results.

ivy Inter segment sales

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

7. Related party disclosures under Accounting Standard (AS)18 A. Names of related party and nature of related party relationship

Subsidiary: Daurala Foods & Beverages Private Limited (DFBPL)

Associate: DCM Hyundai Limited (DHL).

Key management personnel : Mr. Tilak Ohar, Mr. Alok B. Shriram, Mr. D.C. Mittal, Mr. Madhav B. Shriram and Mr. Anil Gujral.

Relatives/HUF of key management personnel: Mrs. Karuna Shriram, Mrs. Kiran Mittal, Mr. Akshay Dhar, Ms. Kanika Shriram (w.e.f. 03/10/11), M/s. Bansi Dhar & Sons - HUF (BDS), Mrs. Divya Shriram, Ms. Aditi Dhar and Ms. Ftitu Bansal.

Others (Enterprise over which key management personnel or their relatives are able to exercise significant influence): Bantam Enterprises Private Limited (BEPL) and H.R. Travels Private Limited (HRTPL).

8. The Company does not have any Finance Lease. Disclosures in respect of assets taken on Operating Lease under Accounting Standard (AS) 19 "Leases" is as under:

i) The Company has entered into operating leases agreements for various premises taken for accommodation of Company''s officers / directors and various offices of the Company. As at March 31,2013 the future minimum lease payments under non- cancellable period which is not later than one year are Rs. 58.64 lacs (2011-12 Nil).

ii) Lease rent charged to the Statement of Profit & Loss relating to operating leases entered or renewed after April 1, 2001 are Rs. 448.85 lacs (2011-12 - Rs. 447.66 lacs).

9. A Petition filed by a shareholder before the Hon''ble Company Law Board (CLB) u/s 397/398 of the Companies Act in November 2007, challenging the preferential issue of equity warrants by the Company, is pending.

10. The Company had in earlier year accounted for cane purchases for crushing season 2007-08 at a price of Rs. 110 per qtl in terms of the interim Order passed by the Hon''ble Supreme Court as against the State Advised Price of Rs. 125 per qtl. Pursuant to Hon''ble Supreme Court''s Order dated 17.1.2012, the differential cane price liability of Rs. 1875.06 lacs has been accounted for during 2011-12 under exceptional item.

11. Employee benefits

a) Defined contribution plans

Rs. 512.86 lacs (2011-12 - Rs. 480.60 lacs) for provident fund contribution and Rs. 186.09 lacs {2011-12 - Rs. 133.92 lacs) for superannuation fund contribution have been charged to the statement of profit and loss account. The contributions towards these schemes are at rates specified in the rules of the schemes. In case of provident fund administered through a trust, shortfall if any, shall be made good by the Company.

b) Defined benefit plans

i) Liability for gratuity, privilege leaves and medical leaves is determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in the gratuity fund.

ii) Gratuity Scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.

12. Previous year''s figures have been regrouped/ recast wherever necessary to correspond with the current year''s classification/ disclosures.


Mar 31, 2012

I. Debentures

Nil (2010-11 - 8,98,000) privately placed 12.50% secured redeemable non convertible debentures of Rs.100 each allotted w.e.f. June 18, 2001, redeemable at par in 26 equal quarterly instalments commencing from April 15, 2005. The instalments due for redemption have been redeemed. These debentures were secured by a first mortgage over all the immovable properties and a first charge by way of hypothecation of all the movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, both present and future (save and except book debts), subject to prior charges created / to be created in favour of the Company's bankers for securing borrowings for working capital requirements, the charges ranking pari-passu with the mortgages and charges created / to be created in favour of existing first charge holders for their respective term loans/debentures. These debentures were also secured by second charge on current assets of the Company excluding those of Daurala Organics, a unit of the Company.

II. Banks

a) Nil (2010-11 - 125.00 lacs), Rs.60.74 lacs (2010-11 - Rs.182.74 lacs), Rs.777.68 lacs (2010-11 - Rs.1222.16 lacs), Rs.700.00 lacs (2010-11 - Rs.1500 lacs), Rs.1857.00 lacs (2010-11 - Rs.2000.00 lacs), Rs.1800.00 lacs (2010-11 - Rs.2000.00 lacs) and Rs.2500.00 lacs (2010-11 - Nil) currently carrying interest between 12% to 14.50% and repayable in 0, 2, 7, 4, 13, 9 and 16 quarterly instalments respectively are secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of existing first charge holders for their respective term loans / debentures.

b) Rs.1083.64 lacs (2010-11 - Nil) carrying interest of 12.50% and repayable in 17 quarterly instalments is secured by first pari-passu charge on entire fixed assets of the Company, both present and future, excluding the assets exclusively charged and those pertaining to Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created / to be created in favour of existing first charge holders for their respective term loans / debentures. Also exclusive charge on assets to be acquired in Daurala Organics, a unit of the Company.

c) Rs.183.40 lacs (2010-11 - Rs.366.72 lacs), Rs.114.22 lacs (2010-11 - Rs.205.90 lacs), Rs.570.00 lacs (2010-11 - Rs.300.00 lacs) and Rs.465.00 lacs (2010-11 - Nil) currently carrying interest between 8.75 % to 13.25% (net of interest subvention) and repayable in 4, 5, 19 and 20 quarterly instalments respectively are secured by first charge on specific movable assets of Shriram Rayons, a unit of the Company.

d) Rs.382.11 lacs (2010-11 - Rs.446.92 lacs) currently carrying interest of 8.50% (net of interest subvention) repayable in 14 quarterly instalments is secured by first mortgage and charge on specific immovable and movable assets of Shriram Rayons, a unit of the Company.

e) Rs.441.00 lacs (2010-11 - Rs.561.00 lacs) currently carrying interest of 14.25% and repayable in 15 quarterly instalments is secured by a first mortgage and charge on all the immovable and movable properties (save and except book debts) of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of existing first charge holders for their respective term loans.

f) Rs.32.13 lacs (2010-11 - Rs.962.47 lacs) carrying Nil rate of interest (net of interest subvention) and repayable in 2 monthly instalments is secured by residual charge on fixed assets of sugar division of the Company.

g) Rs.2.53 lacs (2010-11 - Rs.7.19 lacs) carrying interest between 10% to 13% and repayable in 14 monthly instalments are secured by hypothecation of specific assets.

III. Others

a) Nil (2010-11 - Rs.139.72 lacs) was secured by a first mortgage and charge on all the immovable and movable properties of the Company excluding all assets of Daurala Organics, a unit of the Company, subject to prior charges created / to be created in favour of the Company's bankers for securing the borrowings for working capital requirements, the charges ranking pari-passu with the charges created/to be created in favour of existing first charge holders for their respective term loans / debentures. This was further secured by second charge on current assets of the Company excluding those of Daurala Organics, a unit of the Company.

b) Rs.1804.94 lacs (2010-11 - Rs.1804.94 lacs) carrying interest of 4% and repayable in 5 yearly instalments is secured by exclusive second charge on immovable and movable assets of sugar factory at Daurala Sugar Works, a unit of the Company.

1. a) Pursuant to the Scheme of Arrangement as approved by the High Court of Delhi vide its Order dated April 16, 1990 under sections 391 / 394 of the Companies Act, 1956, assets and liabilities relating to certain units, and certain reserves of the undivided DCM Limited were transferred / allocated to the Company w.e.f. April 1, 1990, being the effective date. The excess of net assets acquired over the share capital and reserves had been transferred to the securities premium account.

b) There are various issues relating to sales tax, income-tax, interest, etc. arisen / arising out of the reorganisation arrangement which will be settled and accounted for in terms of the Scheme of Arrangement of DCM Limited as and when the liabilities / benefits are finally determined. The ultimate effect of these is not ascertainable at this stage.

As at As at 31.03.2012 31.03.2011

2. Contingent liabilities not provided for :- (Rs. lacs) (Rs. lacs)

Income tax matters* 1661.60 193.40

Excise / Service tax / Customs duty matters* 734.79 928.61

Claims against the Company not acknowledged as debts (excluding claims by employees, where amount is not ascertainable)* 1025.54 1088.51

Bills discounted 2336.53 1422.50

* Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position.

3. a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs.104.02 lacs (2010-11-Rs.177.83 lacs).

b) The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee's benefits including union agreement in normal course of business. The Company does not have any long term commitments or material non-cancellable contractual commitments / contracts, which might have material impact on the financial statements.

4. Due to loss suffered in the year 2011-12, remuneration paid to one of the managerial personnel for the said year as minimum remuneration, has exceeded by Rs. 8.07 lacs and the same is subject to the approval of the shareholders at the ensuing Annual General Meeting as required under para 1(B) of part II of Section II of Schedule XIII to the Act.

5. Research and development expenses amounting to Rs. 90.52 lacs (2010-11 - Rs. 29.65 lacs) have been charged to the respective revenue accounts. Capital expenditure relating to research and development amounting to Rs. 28.32 lacs (2010-11 - Rs. 14.65 lacs) has been included in fixed assets.

6. Parties covered under "The Micro, Small and Medium Enterprise Development Act, 2006" (MSMED Act, 2006) have been identified on the basis of confirmation received.

Based upon the information available, the balance due to the Micro and Small Enterprises as defined under the MSMED Act, 2006 is Nil (2010-11 - Rs. 1.93 lacs). Further no interest during the year has been paid or payable under the terms of the MSMED Act, 2006.

7. Segment reporting

A. Business segments

Based on the guiding principles given in Accounting Standard (AS) 17 "Segment Reporting" as notified under the Companies (Accounting Standards) Rules, 2006, the Company's business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yarn, cord, fabric etc.) and Chemicals (comprising Organics & fine Chemicals).

B. Geographical segments

The Company's geographical segments are Domestic and Overseas, by location of customers.

C. Segment accounting policies

In addition to the significant accounting policies applicable to the segments as set out in note 1 of notes forming part of the financial statements, the accounting policies in relation to segment accounting are as under :-

i) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities allocable to two or more segments are allocated to the segments on a reasonable basis.

ii) Segment revenue and expenses

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segment.

iii) Unallocated expenses

Unallocated expenses represent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results.

iv) Inter segment sales

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

8. Related party disclosures under Accounting Standard (AS)18 A. Names of related party and nature of related party relationship

Subsidiary : Daurala Foods & Beverages Private Limited (DFBPL)

Associate : DCM Hyundai Limited (DHL).

Key management personnel : Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr. D.C. Mittal, Mr. Madhav B. Shriram, Mr. G. Kumar (upto 31/01/11) and Mr. Anil Gujral (w.e.f. 1/02/11).

Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs. Kiran Mittal, Mr. Akshay Dhar, Ms. Kanika Shriram (w.e.f. 3/10/11), M/s. Bansi Dhar & Sons - HUF (BDS), Mrs. Divya Shriram, Ms. Aditi Dhar and Ms. Ritu Bansal.

Others (Enterprises over which key management personnel or their relatives are able to exercise significant influence) : Bantam Enterprises Private Limited (BEPL) and H.R. Travels Private Limited (HRTPL).

* Does not include provision for leave salary and contribution / provision towards gratuity, since the contribution /provision is made for the Company as a whole on actuarial basis.

# Refer note 34

9. The Company does not have any Finance Lease. Disclosures in respect of assets taken on Operating Lease under Accounting Standard (AS) 19 "Leases" are as under :

i) The Company generally enters into cancellable operating leases for office premises and residence of its employees, normally renewable on expiry.

ii) Lease rent charged to the profit and loss account relating to operating leases entered or renewed after April 1, 2001 is Rs. 447.66 lacs (2010-11 - Rs. 419.51 lacs).

10. A Petition filed by a shareholder before the Hon'ble Company Law Board (CLB) u/s 397/398 of the Companies Act in November 2007, challenging the preferential issue of equity warrants by the Company, is pending.

11. The Company had in earlier year accounted for cane purchases for crushing season 2007-08 at a price of Rs. 110 per qtl in terms of the interim Order passed by the Hon'ble Supreme Court as against the State Advised Price of Rs. 125 per qtl. Pursuant to Hon'ble Supreme Cout's Order dated 17.1.2012, the differential cane price liability of Rs. 1875.06 lacs has been accounted for during the year under exceptional item.

12. Employee benefits

a) Defined contribution plans

Rs. 480.60 lacs (2010-11 - Rs. 477.80 lacs) for provident fund contribution and Rs. 133.92 lacs (2010-11 - Rs. 166.58 lacs) for superannuation fund contribution have been charged to the statement of profit and loss account. The contributions towards these schemes are at rates specified in the rules of the schemes. In case of provident fund administered through a trust, shortfall if any, shall be made good by the Company.

b) Defined benefit plans

i) Liability for gratuity, privilege leaves and medical leaves is determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in the gratuity fund.

ii) Gratuity Scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.

13. The Revised Schedule - VI has become effective from April 1, 2011 for the preparation of financial statements. Pursuant to the same, the required changes in presentation and disclosures have been incorporated in these financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosures.


Mar 31, 2010

1.a) Pursuant to the Scheme of Arrangement as approved by the High Court of Delhi vide its Order dated April 16, 1990 under sections 391 / 394 of the Companies Act, 1956, assets and liabilities relating to certain units, and certain reserves of the undivided DCM Limited were transferred / allocated to the Company w.e.f. April 1,1990, being the effective date. The excess of net assets acquired over the share capital and reserves had been transferred to the share premium account.

b) There are various issues relating to sales tax, income-tax, interest, etc. arisen / arising out of the reorganisation arrangement which will be settled and accounted for in terms of the Scheme of Arrangement of DCM Limited as and when the liabilities / benefits are finally determined. The ultimate effect of these is not ascertainable at this stage.

As at As at 31.03.2010 31.03.2009

Contingent liabilities not provided for:- (Rs. lacs) (Rs. lacs)

Income tax matters* 210.22 196.70

Excise / Service tax / Customs Duty matters* 698.39 665.93

Claims against the Company not acknowledged as debts (excluding claims by employees, where amount is not ascertainable)* 1000.34 842.95

Bills discounted 2540.73 1718.04

* Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in the opinion of the management, have a material effect on the results of the operations or financial position.

3. Research and development expenses amounting to Rs. 33.53 lacs (2008-09 - Rs. 45.77 lacs) have been charged to the respective revenue accounts.

4. Parties covered under The Micro, Small and Medium Enterprise Development Act, 2006" (MSMED Act, 2006) have been identified on the basis of confirmation received.

Based upon the information available, the balance due to the Micro and Small Enterprises as defined under the MSMED Act, 2006 is nil. Further no interest during the year has been paid or payable under the terms of the MSMED Act, 2006.

5. Segment reporting

A. Business segments

Based on the guiding principles given in Accounting Standard (AS) 17 "Segment Reporting" as notified under the Companies (Accounting Standards) Rules, 2006, the Companys business segments are Sugar (comprising sugar, power and molasses based alcohols), Industrial Fibres and related products (comprising rayon, synthetic yarn, cord, fabric etc.) and Chemicals (comprising Organics & fine Chemicals).

B. Geographical segments

The Companys geographical segments are Domestic and Overseas, by location of customers.

C. Segment accounting policies

In addition to the significant accounting policies applicable to the segments as set out in note 1 of schedule 11 "Notes to the Accounts", the accounting policies in relation to segment accounting are as under :-

i) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include investments, share capital, reserves and surplus, loan funds, income tax - current and deferred and certain other assets and liabilities not allocable to the segments on a reasonable basis. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities to two or more segments are allocated to the segments on a reasonable basis.

ii) Segment revenue and expenses

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segment.

iii) Unallocated expenses

Unallocated expenses represent general administrative expenses, head-office expenses and other expenses that arise at the Company level and relate to the Company as a whole. As such, these expenses have not been considered in arriving at the segment results.

iv) Inter segment sales

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

6. Related party disclosures under Accounting Standard (AS)18

A. Names of related party and nature of related party relationship

Subsidiary : Daurala Foods & Beverages Pvt. Ltd. (DFBPL)

Associates : DCM Hyundai Ltd. (DHL).

Key management personnel: Mr. Tilak Dhar, Mr. Alok B. Shriram, Mr. D.C. Mittal, Mr. Madhav B. Shriram and Mr. G. Kumar.

Relatives/HUF of key management personnel : Mrs. Karuna Shriram, Mrs. Kiran Mittal, Mrs. Manju Kumar, Mr. Akshay Dhar and M/s. Bansi Dhar & Sons - HUF (BDS).

Others (Enterprise over which key management personnel or their relatives are able to exercise significant influence): Hindustan Vacuum Glass Pvt. Ltd. (HVGPL) and Bantam Enterprises Pvt. Ltd. (BEPL).

B. Transactions with related parties referred to in 10 (A) i) Transactions with subsidiary and associates

B. Operating Lease

i) The Company generally enters into cancellable operating leases for office premises and residence of its employees, normally renewable on expiry.

ii) Lease rent charged to the profit and loss account relating to operating leases entered or renewed after April 1, 2001 are Rs. 401.34 lacs (2008-09 - Rs. 447.63 lacs).

7. A Petition filed by a shareholder before the Honble Company Law Board under Section 397 / 398 of the Companies Act in November 2007, challenging the preferential issue of equity warrants by the Company, is pending. The same shareholder also filed a Civil Suit challenging some of the items in the Agenda for the Annual General Meeting (AGM) held on 25.9.2008 before the Honble Delhi High Court. The said Suit was dismissed by the Honble Delhi High Court by its Order dated 25.8.2009. Subsequently, the shareholder filed an appeal against the Order before the Division Bench. The Division Bench by its Order dated 25.5.2010 declined to interfere with the Order of the learned Single Judge.

8. The Company has accounted for cane purchases for crushing season 2007-08 at a price of Rs. 110 per qtl in terms of the interim Order passed by the Honble Allahabad High Court. Subsequently the Honble High Court passed final Order directing sugar mills to pay State Advised Price at Rs. 125 per qtl. Appeal against the Order of the Honble High Court has been filed with the Honble Supreme Court which has directed to pay Rs. 110 per qtl as interim arrangement. Necessary adjustments, if any, will be made in accordance with the final Order of the Honble Supreme Court.

9. Employee benefits

a) Defined contribution plans

Rs. 397.72 lacs (previous year Rs. 364.65 lacs) for provident fund contribution and Rs. 155.91 lacs (previous year Rs. 137.91 lacs) for superannuation contribution have been charged to the profit and loss account. The contributions towards these schemes are at rates specified in the rules of the schemes. In case of Provident Fund administered through a trust, shortfall if any, shall be made good by the Company.

b) Defined benefit plans

i) Liability for gratuity, Privilege leaves and Medical leaves is determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in the gratuity fund.

ii) Gratuity Scheme provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service, except death while in employment.

10. The Company has impaired certain plant & machinery based on net realizable value of such assets determined by an independent valuer. The impairment loss has been recognised at Rs. 127.14 lacs out of which Rs. 27.99 lacs has been adjusted from revaluation reserve being revaluation amount included in carrying value of these assets and the resultant loss (Gross - Rs. 99.15 lacs, net of deferred taxes Rs. 66.21 lacs) has been included in Schedule 9- Manufacturing and Other Expenses.

11. Previous year figures have been regrouped / recast, wherever necessary.

 
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