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Notes to Accounts of Dharani Sugars & Chemicals Ltd.

Mar 31, 2015

1. Background:

Dharani Sugars and Chemicals Limited (Company') was incorporated on 4th June 1987as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar, generation of electricity and production of industrial alcohol.

2.1 Note on Corporate Debt Restructuring (CDR)

The Corporate Debt Restructuring proposal was referred by the Company to Corporate Debt Restructuring Cell ("CDR Cell") and the said proposal was recommended by the consortium of lenders by the Indian Bank (Chennai). The CDR proposal was approved by the CDR Cell on January 16, 2015 and communicated vide final letter of Approval dated February 2, 2015. The cut-off date for the CDR proposal was 1st July 2014.

The Company has been sanctioned Working Capital Term Loan (WCTL) and Funded Interest Term Loan (FITL) and reschedulement of the existing term loans. The promoters are to arrange Rs. 8.59 Crores by way of unsecured loan / equity as their contribution to the said CDR package.

2.2 Taxation

i. Provision for current tax:

The tax Provision for the current year is Rs. NIL (Previous year Rs.NIL)

ii. Deferred tax:

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

2.3.1 Leases: a. Operating Lease

The Company has entered into operating lease arrangements for its office premises. The leases are non-cancellable for a period of five Years from June'2011 to May'2016 based on mutual agreement of the parties. The lease agreements provide for an increase in the lease payments by 10 % for every two years

b. Financial Lease

There were no financial leases entered into by the Company.

2.3.2. Deposits with Bank

Deposits with bank as of March 31, 2015 and March 31, 2014 include restricted deposits of Rs.536.18 lakhs and Rs.670.38 lakhs respectively. The restrictions are primarily on account of bank balances held as margin money deposits against guarantees.

2.3.3 Other Information

i. Realizable value of Current Assets, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year - Rs.41.53 Lakhs (Previous year - Rs.41.53 Lakhs)

2.3.4 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system.

The Company's operations predominantly relate to manufacture of Sugar, Co-Generation of power and production of Industrial Alcohol. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

2.3.5 Foreign currency exposures

The Company had used derivative financial instruments in the form of forward exchange contracts to hedge its risks associated with foreign currency fluctuations during the year. Accounting policy for forward exchange contracts is given in note 1.k above. There are open forward contracts at the end of current and not for the previous year. The details of Foreign Exchange Exposures as at the end of the year are given below:

2.3.6 Previous year comparatives

The Company has reclassified the previous yearfigures in accordance with the requirements applicable in the current year.


Mar 31, 2014

1. Background:

Dharani Sugars and Chemicals Limited (Company'') was incorporated on 4th June 1987as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar, generation of electricity and production of industrial alcohol.

2 Term Loans for Unit III at Kalayanallur, Sankarapuram Taluk, Tamilnadu from Bank of India, Union Bank of India, Indian Bank, State Bank of India, Indian Overseas Bank, IREDA and Sugar development fund are secured on a pari-passu basis by an equitable mortgage of all the immovable properties of the Kalayanallur, Unit III, both present and future, and a charge on Company''s movable assets including plant and machinery Kalayanallur Unit III, and also save and except inventory and book debts and subject to prior charge of specified items in favour of the Company''s bankers for securing working capital facilities and joint mortgage by deposit of title deed with the Banks. Further pledge of 51,21,500 Equity Shares of Rs 10/- each held by the Company in M/s Appu Hotels Limited in favour of above mentioned Banks as additional securities.

3 Term loans from Indian Bank and State Bank of India for Distillery for Dharani Nagar Unit and Staff Quarters at Polur Unit are secured on a pari-passu basis by an equatible mortgage of all the immovable properties of the Dharani Vasudevanallur Unit and Polur unit, both present and future and a charge on companies movable assets including plant & machinery and also save and except inventory and book debts and subject to prior charge of specified items in favour of the companies bankers for securing working capital facilities and joint mortgage by deposit of title deeds with the banks.

4 Rupee Term Loan from ICICI Bank is secured by exclusive charge (including charge of ECB of USD 9 million sanctioned by ICICI Bank) on all the Borrowers movable assets including harvester machines pertaining to refinery unit at Sankarapuram funded out of this facility. The loan also have the first pari-passu Charge on immovable assets of Vasudevanallur & polur unit.

5 The outstanding Rupee Term Loan of Rs. 970.14 lakhs from Sugar Development Fund, Government of India in respect of Polur Expansion Project is secured by bank guarantee and is repayable in annual instalment from financial year (FY) 2014-15 to (FY) 2017-18 and it carries an interest rate of 4% p.a.

6 The outstanding Rupee Term Loan of Rs.716.40 lakhs from Banks in respect of Dharani Vasudevanallur Distillery expansion and Dharani Polur staff Quarters is repayable in monthly installments from financial year (FY) 2014-15 to (FY) 2015-16 and it carries an average interest rate of 14.73% p.a.

7 The outstanding Rupee Term Loan of Rs. 19945.04 lakhs from Banks, IREDA and Sugar Development Fund, Government of India in respect of Dharani Sankarapuram projects of Distillery, Power and Sugar is repayable in monthly /annual instalment from financial year(FY) 2014-15 to (FY) 2020-21 and it carries an average interest rate of 11.05% p.a

8 The outstanding Foreign Currency Loan of Rs.6268.38 lakhs from ICICI Bank and State Bank of India in respect of Dharani Sankarapuram projects of Distillery, Power and Sugar is repayable in monthly / half yearly instalment from financial year(FY) 2014-15 to (FY) 2019-20 and it carries an average interest rate of 7.14 % p.a.

9 The outstanding Rupee corporate Loan of Rs.1019.30 lakhs from State Bank of India is secured through second charge on the current assets of the Company and is repayable monthly installments from the financial year (FY) 2014-15 to (FY) 2016-17 and it carries an average interst rate of 14% p.a.

10 During the year the Company has received Excise Rupee Loan of Rs. 5539.60 lakhs from Indian Bank and is repayable on monthly instalment from financial year(FY) 2016-17 to (FY) 2019-20 and it carries an interest rate of 13.70 % p.a.

11 During the year the Company has received Rupee Term Loan of Rs.2000 lakhs from IREDA for Dharani Polur power project and is repayable in quarterly instalment from financial year(FY) 2016-17 to (FY) 2026-27 and it carries an interest rate of 13.71 % p.a.

12 Term Loan from Sugar Development Fund, Government of India, for the polur unit is secured through a Guarantee from Indian Bank to the extent of Rs. 1350 lakhs, which is secured by an equitable mortgage on Pari Passu basis of all the immovable properties of the Company and by a charge on Company''s movable assets including Plant and Machinery.

13 The Executive Chairman Dr. Palani G.Periasamy has given Personal guarantees for the loans availed from financial institutions / Banks and the aggregate amount outstanding as at the end of the year is Rs.31900 lakhs.

14 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs.743.44 lakhs (Previous year - Rs.1289.92 lakhs).

15 Contingent Liabilities

Claims against the Company not acknowledged as debt Rs.1928.70 Lakhs (Previous year Rs.287.08 lakhs)

16 Leases:

a. Operating Lease:

The Company has entered into operating lease arrangements for its office premises. The leases are non- cancellable for a period of five Years from June''2011 to May''2016 based on mutual agreement of the parties. The lease agreements provide for an increase in the lease payments by 10 % for every two years.

b. Financial Lease:

There were no financial leases entered into by the Company.

17 Deposits with Bank

Deposits with bank as of March 31, 2014 and March 31, 2013 include restricted deposits of Rs.670.38 lakhs and Rs.452.41 lakhs respectively. The restrictions are primarily on account of bank balances held as margin money deposits against guarantees.

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs. 670.38 lakhs (Previous year Rs.452.41 lakhs)

18 Capitalization of Borrowing Cost:

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets which are under development.

Interest capitalized during the year on Capital assets amounts to Rs.27.90 Lakhs and with respect to amount lying in work-in-progress is Rs.103.68 Lakhs (Previous Year Rs.2991.34 Lakhs)

19 Other Information

i. Realizable value of Current Assets, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year Rs.41.53 Lakhs (Previous year Rs.41.53 Lakhs)

20 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system.

The Company''s operations predominantly relate to manufacture of Sugar, Co-Generation of power and production of Industrial Alcohol. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

21 Previous year comparatives

The Company has reclassified the previous year figures in accordance with the requirements applicable in the current year.


Mar 31, 2013

Background

Dharani Sugars and Chemicals Limited (Company) was incorporated on 4th June 1987 as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar, generation of electricity and production of industrial alcohol.

1.1 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. 1,289.92 lakhs (Previous year – Rs. 2,220.18 lakhs).

1.2 Contingent Liabilities

Claims against the Company not acknowledged as debt Rs.287.08 lakhs (Previous year- Rs. 276.96 lakhs)

1.3 Taxation

i. Provision for current tax:

The tax Provision for the current year is determined under MAT. The MAT liability is Rs.349.65 Lakhs (Previous year- Rs.334.75 lakhs)

ii. Deferred tax:

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

1.4.1 Deposits with Bank

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs.452.41 lakhs (Previous year Rs.425.08 lakhs)

1.4.2 Capitalisation of Borrowing Cost

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets which are under development.

Interest capitalized during the Year on capital assets under development amounts to Rs.2,991.34 Lakhs (Current Year Rs.1115.13 Lakhs and carryover from Previous Year Rs. 1876.21 Lakhs) (Previous Year Rs.1,156.67 Lakhs)

1.4.3 Other Information

i. Realizable value of Current Assets, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53 Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year - Rs.41.53 Lakhs (Previous year - Rs.41.53 Lakhs)

The above information and that given in Note 8.1 regarding Micro Small and Medium Enterprises have been determined to the extent the Company has received information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act,2006.

1.4.4 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system.

The Company''s operations predominantly relate to manufacture of Sugar, Co-generation of Power and Production of Industrial Alcohol. Other business segments reported are Distillery and power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy – (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

1.4.5 Foreign currency exposures

The Company had used derivative financial instruments in the form of forward exchange contracts to hedge its risks associated with foreign currency fluctuations during the year. Accounting policy for forward exchange contracts is given in note 24.2 above. There are no open forward contracts at the end of current and previous years. The details of Foreign Exchange Exposures as at the end of the year are given below:

1.4.6 Previous year comparatives

The Company had reclassified the previous year figures in accordance with the requirements applicable in the current year.


Mar 31, 2012

Background:

Dharani Sugars and Chemicals Limited (Company') was incorporated on 4th June 1987 as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar , generation of electricity and production of industrial alcohol.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs.1.00(31 March 2011: Nil)In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1. Term Loans for Sankarapuram project from Bank of India, Union Bank of India, Indian Bank, State Bank of India, Indian Overseas Bank, IREDA and Sugar development fund are secured on a pari-passu basis by an equitable mortgage of all the immovable properties of the Company, both present and future, and a charge on Company's movable assets including plant and machinery and also save and except inventory and book debts and subject to prior charge of specified items in favour of the Company's bankers for securing working capital facilities and joint mortgage by deposit of title deed with the Banks. Further pledge of 5121500 Equity Shares of Rs 10/- each held by the Company in M/s Appu Hotels Limited in favour of above mentioned Banks as additional securities.

2. Term loans from IDBI bank, Indian Bank and State Bank of India are secured on a pari- passu basis by an equitable mortgage of all the immovable properties of the Dharani Nagar unit and Polur unit, both present and future and a charge on companies movable assets including plant & machinery and also save and except inventory and book debts and subject to prior charge of specified items in favour of the companies bankers for securing working capital facilities and joint mortgage by deposit of title deeds with the banks.

3. Rupee Term Loan from ICICI Bank is secured by exclusive charge (including charge of ECB of USD 9 million sanctioned by ICICI Bank) on all the Borrowers' moveable assets including harvester machines pertaining to refinery unit at Sankarapuram funded out of this facility. The loan also has the first pari-passu Charge on immovable assets of Vasudevanallur & Polur sugar plant.

a. The outsatnding Rupee Term Loan of Rs. 205 lakhs from Sugar Development Fund, Government of India in respect of Dharani II Raw sugar Project Cane development and Dharani I is repayable a Annual installments from financial year (FY) 2012-13 to FY 2013-14.

b. The outsatnding Rupee Term Loan of Rs. 1125.97 lakhs from Banks and Sugar Development Fund, Government of India in respect of Dharani II Expansion Project is repayable in monthly / Annual installments from financial year (FY) 2012-13 to FY 2018-19.

c. The outsatnding Rupee Term Loan of Rs. 1632 lakhs from Banks and Sugar Development Fund, Government of India in respect of Dharani I Distillery Expansion and Dharani II Staff Quarters is repayable in monthly installments from financial year (FY) 2012-13 to FY 2015-16.

d. The outsatnding Rupee Term Loan of Rs. 30998.08 lakhs from Banks / Financial Institution / Sugar Development Fund in respect of Dharani III Projects of Distillery, Power and Sugar is repayable in monthly / Quarterly and Half yearly installments from financial year (FY) 2012-13 to FY 2018-19.

4 Term Loan from Sugar Development Fund, Government of India, for the Polur unit is secured through a Guarantee from Indian Bank to the extent of Rs.1350 lakhs, which is secured by an equitable mortgage on Pari Passu basis of all the immovable properties of the Company and by a charge on Company's movable assets including Plant and Machinery.

5 The company has received Rs. 410 Lakhs from Sugar Development Fund, Government of India for cane development and raw sugar machinery which is secured against bank guarantee to the extent of Rs.410 lakhs.

6 The Executive Chairman Dr. Palani G. Periasamy has given Personal guarantees for the loans/working capital facilities availed from Financial Institutions/Banks.

# Excise duty on sales amounting to Rs.1072.47 lakhs (31 March 2011: 1825.08 lakhs) has been reduced from sales in Statement of Profit & Loss and excise duty on increase in stock amounting to Rs.81.54 lakhs (31 March 2011 Rs.708.22 lakhs) has been considered as income in note 22 of financial statement

1. Notes on Accounts

1.1 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. 2220.18 lakhs (Previous year - Rs. 2654.71 lakhs).

1.2 Contingent Liabilities

i. Claims against the Company not acknowledged as debt Rs. 276.96 lakhs (Previous year Rs. 604.74 lakhs)

ii. The Company has so far exported 213295 MT of white sugar (Including 34747 MT in previous year). With this the Company has completely fulfilled all its export obligations.

1.3 Taxation

i. Provision for current tax:

The tax Provision for the current year is determined under MAT. The MAT liability is Rs.334.75 lakhs.

ii. Deferred tax:

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

Break up of Deferred Tax Asset / Liability as on 31.03.2012 is as follows:

1.4.1 Deposits with Bank

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs. 425.08 lakhs (Previous year Rs.271.56 lakhs)

1.4.2 Capitalisation of Borrowing Cost:

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets which are under development.

Interest capitalized during the Year on capital assets under development amounts to Rs.1156.67Lakhs (Previous Year Rs.514.40 Lakhs)

1.4.3 Other Information

i. Realisable value of Current Assents, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53 Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year Rs.41.53 Lakhs (Previous year Rs.41.53 Lakhs)

The above information and that given in Note 8 regarding Micro Small and Medium Enterprises have been determined to the extent the Company has received information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act,2006.

iv. No balances in respect of the related parties have been provided for/written back / written off except as stated above.

1.4.4 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system.

The Company's operations predominantly relate to manufacture of Sugar. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

1.4.5 Foreign currency exposures

The Company had used derivative financial instruments in the form of forward exchange contracts to hedge its risks associated with foreign currency fluctuations during the year. Accounting policy for forward exchange contracts is given in note 23.2 above. There are no open forward contracts at the end of current and previous years. The details of Foreign Exchange Exposures as at the end of the year are given below:

1.4.6 Previous year comparatives

Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.


Mar 31, 2011

1.1. Background

Dharani Sugars and Chemicals Limited (Company) was incorporated on 4" June 1987 as a Limited

1.2.1 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. 2654.71 lakhs (Previous year- Rs. 4333.39 lakhs).

1.3.2 Contingent Liabilities

i. Claims against the Company not acknowledged as debt Rs.619.66 lakhs (Previous year -Rs.487.90 lakhs)

ii. Purchase Tax demand contested Rs.Nil (Previous year- Rs.745.68 lakhs)

iii. The Company has imported 381167.66 MT of raw sugar during the previous years and out of which 223957 MT has been imported under Advance License. As per the terms and conditions of License 213295 MT of white sugar will have to be exported within the prescribed period of the respective License.

The Company has so far exported 178548 MT of white sugar (Including 88758 MT in previous year). The Company is hopeful of fulfilling its balance export obligations. In the unlikely event of not fulfilling the export obligation, the Company has to pay the amount of duty concession availed in respect of its imports along with interest.

1.3.3 Taxation

i. Provision for current tax

Inview of current year losses under the provisions of the lncome Tax Act, 1961,and on the basis of the assessments carried out, the tax liability to Income-tax during the year is lower than the Minimum Alternate Tax. Hence, Minimum Alternate Tax (MAT) of Rs.93.11 lakhs is provided during the year.

ii. Deferred taxation

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

1.3.4 Deposits with Bank

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year- Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs.Z71.56 lakhs (Previous year- Rs.370.Z9 lakhs)

1.3.5 Capitalisation of Borrowing Cost:

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets at the New Unit lll at Sankarapuram.

Interest amount included in Capital Work in Progress Rs.539.85 Lakhs. (Previous Year - Rs. 60.16 Lakhs)

1.3.6 Other Information

i. Managerial Remuneration

Within the limit prescribed under Schedule XIII of the Companies Act, 1956 and approved by the Central Government and the shareholders.

The above working for commission is made in line with the approval received from Central Government. The managerial remuneration for the current year is in accordance with the provisions of Section 198 read with Schedule XIII of the Companies Act, 1956.

iii. Realisable value of Current Assents, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53 Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding atanyonetimeduringtheyearRs.41.53 Lakhs (Previous year Rs.41.53 Lakhs)

The above information and that given in Schedule 11 regarding Micro Small and Medium Enterprises have been determined to the extent the Company has received information from vendors regarding their status under Micro Small and Medium Enterprises Development Act,2006.

1.3.7 Related Party

i. Names of Related Parties:

Nature of relationship Name

Associate Enterprises M/s. Dharani Finance Limited(DFL)

M/s. Appu Hotels Limited (AHL)

M/s. PGP Educational & Welfare Society (PGPE&WS)

M/s. Dharani Developers Private Limited (DDPL)

Key Management Personnel Dr. Palani G. Periasamy, Executive Chairman

Mr. M. Ramalingam, Managing Director,

Mr. A. Sennimalai, Director

Enterprises Significantly M/s. Ananthi Developers Limited influenced by Key Management (ADL) Personnel

ii. The above information regarding related parties have been determined to the extent such parties have been identified on the basis of information available with the company.

iv. No balances in respect of the related parties have been provided for/written back/ written of except as stated above.

1.3.8 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns the organisation structure and internal reporting system.

The Company's operations predominantly relate to manufacture of Sugar. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segmentas also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter segment Transfer Pricing Policy (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

1.3.9 Previous year comparatives

Previous year's figures have been regrouped/rearranged and reclassified wherever necessary to conform to current year's classifications.