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Notes to Accounts of DCM Shriram Ltd.

Mar 31, 2016

1. The Company has taken credit of Rs 85.54 Crores during the current year, pursuant to notification of cane subsidy of Rs.28.60/- per quintal for sugar season 2014-15, by Government of Uttar Pradesh.

2. Deposits received under Section 76 of the Companies Act, 2013 are repayable upto March 2018 based on the maturity dates, (due within 1 year Rs.0.07 Crores; 2014-15 Rs.0.57 Crores).

3. During the financial year 2015-16, the Company has incurred Rs 5.03 Crores (2014-15 - Rs 3.19 Crores), being the gross amount required to be spent on corporate social responsibility activities under section 135 of the Companies Act 2013.

4. ''Excise duty'' on sales has been deducted from gross sales on the face of statement of profit and loss. ''Increase/ (decrease) in excise duty on finished goods'' has been shown under the head "Other expenses" in note 2.25.

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


Mar 31, 2015

This Year Previous Year Rs. Crores Rs. Crores

1.1 (i) Contingent liabilities not provided for:

Claims* (excluding claims by employees where amount not ascertainable) not acknowledged as debts:

Sales tax matters 1.33 1.33

Excise matters - 2.12

Service tax matters 31.66 -

Additional premium on land 8.11 8.11

Others 5.93 5.93

Total 47.03 17.49

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

(ii) Capital commitments (net of advances) 60.34 19.18

(iii) Guarantees given to financial institutions, banks and other parties in respect of loans availed by subsidiaries and other parties:

Amount guaranteed - 1.85

Amount of loans outstanding - 0.04

2. In accordance with past practice, the Company has taken revenue credits aggregating Rs.123.83 crores (2013-14 - Rs. 18.25 crores) for urea subsidy claims, which are pending notification/ final acceptance by ''Fertiliser Industry Coordination Committee'' (FICC), Government of India, in pursuance of the Retention Price Scheme administered for nitrogenous fertilisers. Necessary adjustments to revenue credits so accrued will be made on issuance of notification by FICC, Government of India.

3. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting", the Company''s business segments include: Fertilisers (manufacturing of urea), Chloro-Vinyl (manufacturing of poly-vinyl chloride, carbide and chlor alkali products), Shriram Farm solutions (trading of di-ammonium phosphate, muriate of potash, super phosphate, other fertilisers, seeds and pesticides), Sugar (manufacturing of sugar products and co-generation of Power), Cement (manufacturing of cement), Hariyali Kisaan Bazaar (Rural retail), Bioseed (production of hybrid seeds), Others (UPVC window systems, textiles and plaster of paris). Sale of power from the power generation facilities set up for the business segments is included in their respective results.

B. Geographical segments:

Since the Company''s activities/ operations are primarily within the country and considering the nature of products/ services it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting policies applicable to the business segments as set out in note 1 above, the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

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

b) 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 deferred income taxes. While most of the assets/ liabilities can be directly attributed to individual segment, the carrying amount of certain assets/ liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis.

c) Inter segment sales:

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

4. Related party disclosures under Accounting Standard AS-18 "Related Party Disclosures":

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

Holding company:

Sumant Investments Private Limited

1. Subsidiaries:

DCM Shriram Credit and Investments Limited, Bioseed India Limited, DCM Shriram Infrastructure Limited, DCM Shriram Aqua Foods Limited, DCM Shriram Foundation (formerly Hariyali Rural Foundation), Hariyali Rural Ventures Limited, Hariyali Services Limited (formerly Hariyali Insurance Broking Limited), Fenesta India Limited, Shri Ganpati Fertilizers Limited, Shriram Bioseed (Thailand) Ltd., Bioseeds Limited, Bioseed Research Philippines Inc., Bioseeds Holdings PTE. Ltd., Bioseed Vietnam Limited, Shriram Bioseed Ventures Limited, Shriram Bioseeds Ltd., Shridhar Shriram Foundation, PT Shriram Seed Indonesia, Bioseed Research USA Inc., PT Shriram Genetics Indonesia, DCM Shriram Thermal Energy Limited #, Hariyali India Limited #, DCM Shriram Energy and Infrastructure Limited #, DCM Shriram Hydro Energy Limited #, Zeus Investments Limited #

# dissolved during current year

2. Joint Venture:

Shriram Axiall Private Limited (formerly Shriram Vinyl PolyTech Pvt. Limited, a 100% subsidiary of the Company upto April 9, 2014]

3. Key Managerial Persons, their relatives and HUFs:

Mr. Ajay S. Shriram, Mr. Vikram S. Shriram, Mr. Rajiv Sinha*, Mr. Ajit S. Shriram, Mr. N.J. Singh, Mr. K.K. Kaul **, Mr. Aditya A. Shriram (relative of Mr. Ajay S. Shriram), Mr. Anand A. Shriram (relative of Mr. Ajay S. Shriram), Mrs. Divya Sinha* (relative of Mr. Rajiv Sinha), Ms. Arunima Sinha* (relative of Mr. Rajiv Sinha), Mrs. Anuradha Bishnoi (relative of Mr. Ajay S. Shriram), M/s. Ajay S. Shriram (HUF), M/s. Vikram S. Shriram (HUF), M/s. Ajit S. Shriram (HUF).

* (upto 31.10.2013)

** (w.e.f. 02.07.2014)

5. Secured loan

a. Short term working capital borrowings from banks:

1. Loans from banks on cash credit account of Rs. 101.27 Crores (2013-14 - Rs. 98.80 Crores) are secured by first pari passu charge on whole of the current assets, both present and future, of the company (except Shriram Bioseed Genetics, Hyderabad and Bioseed Research India , Hyderabad). These loans are further secured by a third charge by way of mortgage/hypothecation of all the immovable/movable properties (other than current assets) of the Company''s undertakings at Kota in Rajasthan and Ajbapur, Rupapur, Loni and Hariawan in Uttar Pradesh.

2. Short Term Loans of Rs. 196.53 Crores (2013-14 - Rs. 227.09 Crores) are secured by first pari passu charge on whole of the current assets, both present and future, of the Company (except Shriram Bioseed Genetics, Hyderabad and Bioseed Research India, Hyderabad), and a third charge by way of mortgage/hypothecation of all the immovable/movable properties (other than current assets) of the Company''s undertakings at Kota in Rajasthan and Ajbapur, Rupapur, Loni and Hariawan in Uttar Pradesh.

6. Employee share based payments

The Company has an Employees Stock Purchase Scheme (''Scheme'') 2010, which is administered through DSCL Employees Benefits Trust based on acquisition of shares from the market to provide equity based incentives to employees. Under the Scheme, the Company has granted shares to employees with specified lock-in period. The expenses on the Scheme is accounted for at intrinsic value i.e. excess of market price on the date of grant over the exercise price of the shares granted and is amortized on a straight line basis over the lock-in period, if any.

7. With effect from April 1, 2014, depreciation on fixed assets is computed in accordance with Schedule II of the Companies Act 2013. Consequent thereto, depreciation charge for the year is lower by Rs. 18.61 crores and depreciation amounting to Rs. 10.92 crores (net of deferred tax Rs 5.62 crores) has been adjusted from the opening balance of retained earnings.

8. The Company has sold its textile spinning unit at Tonk, Rajasthan as a going concern, on slump sale basis for a lump sum consideration of Rs. 17.13 crores w.e.f. June 24, 2014. Consequent to the above, Rs 0.24 crores representing the excess of sales consideration over the net assets transferred has been shown as ''other income'' in note 2.22.

9. Deposits received under Section 76 of the Companies Act, 2013 are repayable upto March 2018 based on the maturity dates. (due within 1 year Rs. 0.57 crores; 2013-14 Rs. 5.48 crores).

10. Provision for contingencies aggregating to Rs. 12.09 crores (2013-14 - Rs. 12.09 crores) in note 2.6 represents the maximum possible exposure on ultimate settlement of issues relating to reconstruction arrangement of the companies.

11. Research and development expenses included under relevant heads in the statement of profit and loss Rs. 44.21 crores (2013-14- Rs. 40.68 crores).

12. ''Excise duty'' on sales has been deducted from gross sales on the face of statement of profit and loss. ''Increase/ (decrease) in excise duty on finished goods'' has been shown under the head ''Other expenses'' in note 2.26.

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

14. Notes 1 to 25 and the statement of additional information form an integral part of the financial statements.


Mar 31, 2014

This Year Previous Year Rs. Crores Rs. Crores

1.(i) Contingent liabilities not provided for:

Claims* (excluding claims by employees where amount not ascertainable) not acknowledged as debts:

Sales tax matters 1.33 1.33

Excise matters 2.12 2.12

Additional premium on land 8.11 8.11

Others 5.93 5.93

Total 17.49 17.49

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

(ii) Capital commitments (net of advances) 19.18 2.33

(iii) Guarantees given to financial institutions, banks and other parties in respect of loans availed by subsidiaries and other parties:

Amount guaranteed 1.85 5.07

Amount of loans outstanding 0.04 2.88

(iv) Guarantees given for dealers in respect of short term financing - 7.81 arrangement

Amount of loans outstanding - 7.81

2. In accordance with past practice, the Company has taken revenue credits aggregating Rs. 18.25 crores (2012-13 - Rs. Nil) for urea subsidy claims , which are pending notification/ final acceptance by 'Fertiliser Industry Coordination Committee' (FICC), Government of India, in pursuance of the Retention Price Scheme administered for nitrogenous fertilisers. Necessary adjustments to revenue credits so accrued will be made on issuance of notification by FICC, Government of India.

3. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" notified under Companies (Accounting Standard) Rules, 2006, the Company's business segments include: Fertilisers (manufacturing of urea), Chloro-Vinyl (manufacturing of poly-vinyl chloride, carbide and chlor alkali products), Shriram Farm solutions (trading of di-ammonium phosphate, murite of potash, super phosphate, other fertilisers, seeds and pesticides), Sugar (manufacturing of sugar products and co-generation of Power), Cement (manufacturing of cement), Hariyali Kisaan Bazaar (Rural retail and agri businesses), Bioseed (production of hybrid seeds), Others (UPVC window systems, textiles, plaster of paris and compounds). Sale of power from the power generation facilities set up for the business segments is included in their respective results.

B. Geographical segments:

Since the Company's activities/ operations are primarily within the country and considering the nature of products/ services it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting policies applicable to the business segments as set out in note 1 above, the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

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

b) 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 deferred income taxes. While most of the assets/ liabilities can be directly attributed to individual segment, the carrying amount of certain assets/ liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis.

c) Inter segment sales:

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

4. Related party disclosures under Accounting Standard AS-18 "Related Party Disclosures" notified under Companies (Accounting Standard) Rules, 2006 :

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

Holding company: Sumant Investments Private Limited

Subsidiaries: DCM Shriram Credit and Investments Limited, Bioseed India Limited, DCM Shriram Infrastructure Limited, DCM Shriram Thermal Energy Limited, Hariyali India Limited, DCM Shriram Aqua Foods Limited, DCM Shriram Foundation (formerly Hariyali Rural Foundation), Hariyali Rural Ventures Limited, Hariyali Insurance Broking Limited, DCM Shriram Energy and Infrastructure Ltd., DCM Shriram Hydro Energy Limited, Shriram Vinyl PolyTech Pvt. Limited (formerly Shriram Vinyl PolyTech Limited), Fenesta India Ltd., Shri Ganpati Fertilizers Limited, Shriram Bioseed (Thailand) Ltd., Bioseeds Limited, Bioseed Research Philippines Inc., Bioseeds Holdings PTE. Ltd., Bioseed Vietnam Limited, Shriram Bioseed Ventures Limited, Shriram Bioseeds Ltd., Zeus Investments Ltd., Shridhar Shriram Foundation, PT Shriram Seed Indonesia, Bioseed Research USA Inc., PT Shriram Genetics Indonesia*.

*from current year

Key Managerial Persons, their relatives and HUFs: Mr. Ajay S. Shriram, Mr. Vikram S. Shriram, Mr. Rajiv Sinha*, Mr. Ajit S. Shriram, Mr. N.J. Singh, Mr. Aditya A. Shriram (relative of Mr. Ajay S. Shriram), Mr. Anand A. Shriram (relative of Mr. Ajay S. Shriram), Mrs. Divya Sinha* (relative of Mr. Rajiv Sinha), Ms. Arunima Sinha* (relative of Mr. Rajiv Sinha), Mrs. Anuradha Bishnoi (relative of Mr. Ajay S. Shriram), M/s. Ajay S. Shriram (HUF), M/s. Vikram S. Shriram (HUF), M/s. Ajit S. Shriram (HUF)

*(upto 31.10.2013)

5. Based on the information available with the Company, the principal amount and interest due to Micro and Small Enterprise as defined under the "The Micro, Small, and Medium Enterprises Development Act, 2006" is Rs. 1.38 crores (2012-13 - Rs. 2.88 crores) and Rs. 0.03 crore (2012-13 - Rs. 0.01 crore) respectively.

6. Donation includes Rs. 2 crores (2012-13 - Rs. Nil) to Satya Electoral Trust as political contribution.

7. Employee share based payments

The Company has an Employees Stock Purchase Scheme ('Scheme') 2010, which is administered through DSCL Employees Benefits Trust based on acquisition of shares from the market to provide equity based incentives to employees. Under the Scheme, the Company has granted shares to employees with specified lock in period. The expenses on the Scheme is accounted for at intrinsic value i.e. excess of market price on the date of grant over the exercise price of the shares granted and is amortized on a straight line basis over the lock-in period, if any.

8. Exceptional items represents the expenses relating to restructuring and rationalization of Hariyali Kisaan Bazaar's operations during financial year 2012-13.

8. Deposits received under Section 58A of the Companies Act, 1956 are repayable upto March 2017 based on the maturity dates. (Rs. 5.48 crores due within 1 year; 2012-13 Rs. 15.90 crores).

10. Provision for contingencies aggregating to Rs. 12.09 crores (2012-13 - Rs. 12.09 crores) in note 2.6 represents the maximum possible exposure on ultimate settlement of issues relating to reconstruction arrangement of the companies.

10. Research and development expenses included under relevant heads in the statement of profit and loss Rs. 40.68 crores (2012-13- Rs. 0.95 crores).

12. 'Excise duty' on sales has been deducted from gross sales on the face of statement of profit and loss. 'Increase/ (decrease) in excise duty on finished goods' has been shown under the head 'Other expenses" in note 2.26.

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

14. Notes 1 to 24 and the statement of additional information form an integral part of the financial statements.


Mar 31, 2013

1. In accordance with past practice, the Company has taken revenue credits aggregating Rs Nil (2011-12 - Rs. 9.15 crores) for urea subsidy claims , which are pending notification/ final acceptance by ''Fertiliser Industry Coordination Committee'' (FICC), Government of India, in pursuance of the Retention Price Scheme administered for nitrogenous fertilisers. Necessary adjustments to revenue credits so accrued will be made on issuance of notification by FICC, Government of India

2. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard 17 "Segment Reporting" notified under Companies (Accounting Standard) Rules, 2006, the Company''s business segments include: Fertilisers (manufacturing of urea), Chloro-Vinyl (manufacturing of poly-vinyl chloride, carbide and chlor alkali products), Shriram Farm solutions (trading of di-ammonium phosphate, murite of potash, super phosphate, other fertilisers, seeds and pesticides), Sugar (manufacturing of sugar products and co-generation of Power), Cement (manufacturing of cement), Hariyali Kisaan Bazaar (Rural retail and agri businesses), Bioseed (production of hybrid seeds), Others (UPVC window systems, textiles, plaster of paris and compounds). Sale of power from the power generation facilities set up for the business segments is included in their respective results.

B. Geographical segments:

Since the Company''s activities/ operations are primarily within the country and considering the nature of products/ services it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting policies applicable to the business segments as set out in note 1 above, the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

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

b) 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 deferred income taxes. While most of the assets/ liabilities can be directly attributed to individual segment, the carrying amount of certain assets/ liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis.

c) Inter segment sales:

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

3. Based on the information available with the Company, the principal amount and interest due to Micro and Small Enterprise as defined under the "The Micro, Small, and Medium Enterprises Development Act, 2006" is Rs. 2.88 crores (2011-12 - Rs. 0.95 crores) and Rs. 0.01 crores (2011-12 - Rs. 0.04 crores) respectively.

4. Related party disclosures under Accounting Standard 18 "Related Party Disclosures" notified under Companies (Accounting Standard) Rules, 2006:

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

Holding company: Sumant Investments Private Limited

Subsidiaries: DCM Shriram Credit and Investments Limited, Bioseed India Limited, DCM Shriram Infrastructure Limited, DCM Shriram Thermal Energy Limited, Hariyali India Limited, DCM Shriram Aqua Foods Limited, Hariyali Rural Foundation, Hariyali Rural Ventures Limited, Hariyali Insurance Broking Limited, DCM Shriram Energy and Infrastructure Ltd., DCM Shriram Hydro Energy Limited, Shriram Vinyl PolyTech Limited (formerly SBM Yarn Limited), Fenesta India Limited, Shri Ganpati Fertilizers Limited, Shriram Bioseed (Thailand) Limited, Bioseeds Limited, Bioseed Research Philippines Inc., Bioseeds Holdings PTE. Limited, Bioseed Vietnam Limited, Bioseed Research India Limited (formerly Bioseed Research India Private Limited), Shriram Bioseed Ventures Limited, Shriram Bioseeds Limited, Zeus Investments Limited, Shridhar Shriram Foundation, PT Shriram Seed Indonesia, Bioseed Research USA Inc.*

* from current year

Key Managerial Persons, their relatives and HUFs: Mr. Ajay S. Shriram, Mr. Vikram S. Shriram, Mr. Rajiv Sinha, Mr. Ajit S. Shriram, Mr. N.J. Singh, Mr. Aditya A. Shriram (relative of Mr. Ajay S. Shriram), Mr. Anand A. Shriram (relative of Mr. Ajay S. Shriram), Mrs. Divya Sinha (relative of Mr. Rajiv Sinha), Ms. Arunima Sinha (relative of Mr. Rajiv Sinha), M/s. Ajay S. Shriram (HUF), M/s. Vikram S. Shriram (HUF)

5. The PVC Compounds business of the Company has been transferred to Shriram Vinyl Polytech Ltd (Formerly SBM Yarn Limited) (a 100% subsidiary), as a going concern, on slump sale basis for a lump-sum consideration of Rs 33 crores w.e.f. closing date i.e. 15th March 2013. Consequent to the above, Rs. 0.26 crores representing the excess of sales consideration over the net assets transferred has been shown as ''other income'' in note 2.21.

6. Employee share based payments

The Company has an Employees Stock Purchase Scheme (''Scheme'') 2010, which is administered through DSCL Employees Benefits Trust based on acquisition of shares from the market to provide equity based incentives to employees. Under the Scheme, the Company has granted shares to employees with specified lock in period. The expenses on the Scheme is accounted for at intrinsic value i.e. excess of market price on the date of grant over the exercise price of the shares granted and is amortized on a straight line basis over the lock-in period, if any.

7. Exceptional items represents:

(a) Financial year 2012-13: Charge on account of expenses incurred, losses on sale and provision for impairment of surplus assets consequent to restructuring and rationalization of Hariyali Kisaan Bazaar''s operations during the year.

(b) Financial Year 2011-12: Differential cane price for the sugar season 2007-08 accounted for pursuant to the Hon''ble Supreme Court Order.

8. The Hon''ble High Court of Delhi vide its order dated March 22, 2013 has approved the Scheme of Amalgamation for merger of Bioseed Research India Limited (a 100% subsidiary) with the Company w.e.f. Appointed date April 1, 2013.

9. Deposits received under Section 58A of the Companies Act, 1956 are repayable upto March 2015 based on the maturity dates. (Rs. 15.90 crores due within 1 year; 2011-12 Rs. 8.76 crores)

10. There are no disputed dues of wealth tax, customs duty and cess matters. The details of disputed Excise duty, Service tax, Income-Tax and Sales-tax dues as on March 31, 2013 are as follows:

11. Provision for contingencies aggregating to Rs. 12.09 crores (2011-12 - Rs. 12.09 crores) in note 2.6 represents the maximum possible exposure on ultimate settlement of issues relating to reconstruction arrangement of the companies.

12. Research and development expenses included under relevant heads in the statement of profit and loss Rs. 0.95 crores (2011-12- Rs. 1.13 crores).

13. Category wise quantitative data about Derivative Instruments:

14. ''Excise duty'' on sales has been deducted from gross sales on the face of statement of profit and loss. ''Increase/ (decrease) in excise duty on finished goods'' has been shown under the head ''Other expenses" in note 2.26.

15. Disclosure in respect of operating leases under Accounting Standards - 19 "Leases" are as under: a. Assets taken on lease:-

(i) The Company has entered into lease agreements for lease of offices, retail outlets etc., generally for a period of 5/15 years, which can be terminated, by serving notice period as per the terms of the agreements.

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


Mar 31, 2012

This Year Previous Year

(Rs. Crores) (Rs. Crores)

1.(i) Contingent liabilities not provided for: Claims* (excluding claims by employees where amount not ascertainable) not acknowledged as debts:

Sales tax matters 1.36 1.36

Excise matters 2.12 2.17

Additional premium on land 8.11 8.11

Others 5.91 6.01

Total 17.50 17.65

2. In accordance with past practice, the Company has taken revenue credits aggregating Rs 9.15 crores (2010-11 - Rs. 27.00 crores) for urea subsidy claims , which are pending notification/ final acceptance by 'Fertiliser Industry Coordination Committee' (FICC), Government of India, in pursuance of the Retention Price Scheme administered for nitrogenous fertilisers. Necessary adjustment to revenue credits so accrued will be made on issuance of notification by FICC, Government of India

3. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" notified under Companies (Accounting Standard) Rules, 2006, the Company's business segments include: Fertilisers (manufacturing of urea), Chloro-Vinyl (manufacturing of poly-vinyl chloride, carbide and chlor alkali products), Farm solutions (trading of di-ammonium phosphate, murite of potash, super phosphate, other fertilisers, seeds and pesticides), Sugar (manufacturing of sugar products and co-generation of Power), Cement (manufacturing of cement), Hariyali Kisaan Bazaar (Rural retail and agri businesses), Bioseed (production of hybrid seeds), Others (UPVC window systems, textiles, plaster of paris and compounds). Sale of power from the power generation facilities set up for the business segments is included in their respective results.

B. Geographical segments:

Since the Company's activities/operations are primarily within the country and considering the nature of products/services it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting policies applicable to the business segments as set out in note

1 above, the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

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

b) 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 deferred income taxes. While most of the assets/ liabilities can be directly attributed to individual segment, the carrying amount of certain assets/ liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis.

c) Inter segment sales:

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

4. Related party disclosures under Accounting Standard AS-18 "Related Party Disclosures" notified under Companies (Accounting Standard) Rules, 2006:

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

Holding company: Sumant Investments Private Limited

Subsidiaries: DCM Shriram Credit and Investments Limited, Bioseed India Limited, DCM Shriram Infrastructure Limited, DCM Shriram Thermal Energy Limited, Hariyali India Limited, DCM Shriram Aqua Foods Limited, Hariyali Rural Foundation, Hariyali Rural Ventures Limited, Hariyali Insurance Broking Limited, DCM Shriram Energy and Infrastructure Ltd., DCM Shriram Hydro Energy Limited, SBM Yarn Limited, Fenesta India Limited, Shri Ganpati Fertilizers Limited, Shriram Bioseed (Thailand) Limited, Bioseeds Limited, Bioseed Research Philippines Inc., Bioseeds Holdings PTE. Limited, Bioseed Vietnam Limited, Bioseed Research India Private Limited, Shriram Bioseed Ventures Limited, Shriram Bioseeds Limited, Zeus Investments Limited, Shridhar Shriram Foundation, PT Shriram Seed Indonesia *

* from current year

Key Managerial Persons, their relatives and HUFs: Mr. Ajay S. Shriram, Mr. Vikram S. Shriram, Mr. Rajiv Sinha, Mr. Ajit S. Shriram, Mr. N.J. Singh, Mr. Aditya A. Shriram (relative of Mr. Ajay S. Shriram), Mr. Anand A. Shriram (relative of Mr. Ajay S. Shriram), Mrs. Divya Sinha (relative of Mr. Rajiv Sinha), Ms. Arunima Sinha (relative of Mr. Rajiv Sinha), M/s. Ajay S. Shriram (HUF), M/s. Vikram S. Shriram (HUF)

5. Deposits received under Section 58A of the Companies Act, 1956 are repayable upto March 2015 based on the maturity dates. (Rs. 8.76 crores due within 1 year; 2010-11 Rs. 7.86 crores)

6. There are no disputed dues of wealth tax, customs duty and cess matters. The details of disputed Excise duty, Service tax, Income-Tax and Sales-tax dues as on March 31, 2012 are as follows:

7. Provision for contingencies aggregating to Rs. 12.09 crores (2010-11 - Rs. 12.09 crores) in note 2.6 represents the maximum possible exposure on ultimate settlement of issues relating to reconstruction arrangement of the companies.

8. Research and development expenses included under relevant heads in the statement of profit and loss Rs.1.13 crores (2010-11 - Rs. 2.96 crores).

9. 'Excise duty' on sales has been deducted from gross sales on the face of Statement of profit and loss. 'Increase/ (decrease) in excise duty on finished goods' has been shown under the head 'Other expenses" in note 2.25.

10. Schedule VI to the Companies Act, 1956 directing the preparation, disclosure and presentation of financial statements has been revised effective from 1 April, 2011. Accordingly, previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification / disclosure.

11. Notes 1 to 20 and the statement of additional information form an integral part of the financial statements.


Mar 31, 2010

This Year Previous Year (Rs. Crores) (Rs. Crores)

1. (i) Contingent liabilities not provided for: Claims* (excluding claims by employees where amount not ascertainable) not acknowledged as debts:

Income tax matters 0.53 0.31

Sales tax matters 1.36 1.33

Excise matters 2.23 2.22

Additional premium on land 8.11 8.11

Others 5.84 6.10

Total 18.07 18.07

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

(ii) Capital commitments (net of advances) 2.83 9.90

(iii) Guarantees given to financial institutions, banks and other parties in respect of loans availed by subsidiaries and other parties: Amount guaranteed 4.73 2.44

Amount of loans outstanding 1.15 0.65

2. In accordance with past practice, the Company has taken revenue credits aggregating Rs. Nil (2008-09 - Rs. 46.81 crores) for urea subsidy claims, which are pending notification/ final acceptance by Fertiliser Industry Coordination Committee (FICC), Government of India, in pursuance of the Retention Price Scheme administered for nitrogenous fertilisers. Similarly, revenue credits aggregating Rs. Nil (2008-09- Rs. 17.38 crores) for subsidy claims relating to Di-Ammonium Phosphate, Murite of Potash and Single Super Phosphate have been taken which are pending notification of final rates of concession/subsidy by the Government of India, Ministry of Chemicals and Fertilisers. Necessary adjustment to revenue credits so accrued will be made on issuance of notification by FICC/Government of India, Ministry of Chemicals and Fertilisers or final settlement thereof.

3. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" notified under Companies (Accounting Standard) Rules, 2006, the Companys business segments include: Fertilisers (manufacturing of urea), Chloro-Vinyl (manufacturing of poly-vinyl chloride, carbide and chlor alkali products), Agri inputs (trading of di-ammonium phosphate, murite of potash, super phosphate, other fertilisers, seeds and pesticides), Sugar (manufacturing of sugar products and co-generation of Power), Cement (manufacturing of cement), Hariyali Kisaan Bazaar (Rural retail and agri businesses), Others (UPVC window systems, textiles, plaster of paris and compounds). Sale of power from the power generation facilities set up for the business segments is included in their respective results.

B. Geographical segments:

Since the Companys activities/ operations are primarily within the country and considering the nature of products/ services it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting policies applicable to the business segments as set out in note 1 above, the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

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

b) 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 deferred income taxes. While most of the assets/ liabilities can be directly attributed to individual segment, the carrying amount of certain assets/ liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis.

c) Inter segment sales:

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

4. Based on the information available with the Company, the principal amount and interest due to Micro and Small Enterprise as defined under the "The Micro, Small, and Medium Enterprises Development Act, 2006" is Rs. 0.74 crore (2008-2009 - Rs. 0.92 Crore) and Rs. Nil (2008-2009 - Rs. 0.07 crore) respectively.

5. The Company has filed a Scheme of Arrangement with the Honble High Court of Delhi for Merger of Shriram Bioseed Genetics India Limited (a 100% subsidiary) with the Company w.e.f. April 1, 2009. Pending approval from the Honble High Court, the effect of the Scheme has not been considered in the accounts.

6. Related party disclosures under Accounting Standard AS-18 "Related Party Disclosures" notified under Companies (Accounting Standard) Rules, 2006:

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

Subsidiaries: DCM Shriram Credit and Investments Limited, Bioseed India Limited (formerly DCM Shriram International Limited), DCM Shriram Infrastructure Limited, DCM Shriram Thermal Energy Limited, Hariyali India Limited, DCM Shriram Aqua Foods Limited, Hariyali Rural Foundation, DSCL Energy Services Company Limited*, Hariyali Rural Ventures Limited, Hariyali Insurance Broking Limited, DCM Shriram Energy and Infrastructure Ltd., DCM Shriram Hydro Energy Limited, SBM Yarn Limited, Fenesta India Limited (Formerly Fenesta Building Systems Limited), Shri Ganpati Fertilizers Limited, Shriram Bioseed Genetics India Limited, Shriram Bioseed (Thailand) Limited, Bioseeds Limited, Bioseed Research Philippines Inc., Bioseeds Holdings PTE Limited, Bioseed Vietnam Limited, Bioseed Research India Private Limited, Shriram Bioseed Ventures Limited, Shriram Bioseeds Limited, Zeus Investments Limited, Shridhar Shriram Foundation** * ceased to be a subsidiary w.e.f. 14 December, 2009 ** subsidiary from current year

Key Managerial Persons, their relatives and HUFs: Mr. Ajay S. Shriram, Mr. Vikram S. Shriram, Mr. Rajiv Sinha, Mr. Ajit S. Shriram, Mr. N.J. Singh, Mr. Aditya A. Shriram (relative of Mr. Ajay S. Shriram), Mrs. Divya Sinha (relative of Mr. Rajiv Sinha), Ms. Arunima Sinha (relative of Mr. Rajiv Sinha), M/s. Ajay S. Shriram (HUF), M/s. Vikram S. Shriram (HUF),

7.Excise duty on sales has been deducted from gross sales on the face of profit and loss account. Increase/ (decrease) in excise duty on finished goods has been shown under the head Manufacturing and other expenses in schedule 10.

Provision for incremental gratuity liability and leave encashment for the current year in respect of directors has not been considered above, since the provision is based on an actuarial basis for the Company as a whole.

Computation of net profit in accordance with section 198/349 of the Companies Act, 1956 and commission payable to directors.

8. Amount of borrowing costs capitalised to fixed assets during the year Rs. Nil (2008-2009 - Rs. 12.19 crores)

9. Provision for contingencies aggregating to Rs. 12.09 crores (2008-2009 - Rs. 12.09 crores) in Schedule 8 represents the maximum possible exposure on ultimate settlement of issues relating to reconstruction arrangement of the companies.

10. Research and development expenses included under relevant heads in the profit and loss account Rs. 2.50 crores (2008-2009 - Rs. 2.13 crores).

11. The Company had accounted for cane purchases for sugar season 2007-08 at Rs. 110 per quintal, the rate at which it has made payment to the cane growers as per the interim order of the Honble Supreme Court, against the price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government. Necessary adjustments will be made in accordance with the orders of the Honble court in the matter.

12. Disclosure in respect of assets taken on lease under Accounting Standards AS-19 "leases": (i) General description of the lease ;

The Company has entered into lease agreements for lease of offices, retail outlets etc., generally for a period of 5/15 years, which can be terminated, by serving notice period as per the terms of the agreements.

13. Previous years figures have been recast, wherever necessary.

14. Schedules 1 to 1 2 and the statement of additional information form an integral part of the financial statements.

NOTES :

1. The Licences acquired from undivided DCM Limited, pursuant to the Scheme of Arrangement, are pending endorsement in the name of the Company.

2. Installed capacity is as certified by officials of the Company and relied upon by the auditors, being a technical matter.

3. The figures of production, sales, opening /closing stocks of caustic soda consist of liquid and flakes, both.

4. The figures of production, sales, opening /closing stocks of chlorine consist of liquid chlorine and chlorine gas, both.

5. The sales quantities are net of samples/shortages.

6. Where one class of goods is used in the manufacture of another, consumption of materials has been arrived at after deducting internal transfers.

7. Production details in respect of a class of goods captively consumed have not been indicated.

8. Interest paid/payable to financial institutions/ banks in India on foreign currency loans is not included under item 4(b) above, as such payments have been/will be made in Indian Rupees to the financial institutions.

 
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