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Notes to Accounts of EID Parry (India) Ltd.

Mar 31, 2014

Corporate information

E.I.D. Parry is a significant player in Sugar with interests in promising areas of Bio Pesticides and Nutraceuticals. The company also has a significant presence in Farm Inputs business through its subsidiary, Coromandel International Limited.

EID Parry together with its subsidiaries has nine sugar factories having a capacity to crush 37,550 Tonnes of Cane per day, generate 153 MW of power and four distilleries having a capacity of 230 KLPD. In the Bio Pesticides business, the Company offers a unique neem extract, Azadirachtin, having a good demand in the developed countries'' bio pesticide markets. In the Nutraceuticals business, it holds a strong position in the growing wellness segment mainly catering to the world markets with its organic products.

1.1 The above equity share capital is net off 62,69,402 Equity Shares of Rs. 1 each, bought back by the company during the year 2008-09.

1.2 Under the Employee Stock Option Plan – ESOP 2007, options not exceeding 89,24,850 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting.

Total options outstanding as at March 31, 2014 - 3,48,096 (March 2013- 6,40,342) equity shares of Rs. 1 each. Refer Note No. 43 for other details about the scheme.

1.3 Terms attached to Equity shares

The Company has only one class of Equity share having a par value of Rs. 1 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital on liquidation will be in proportion to the number of equity shares held.

2.1 During the year, 19,132 equity shares (2013: 2,65,810 equity shares) of Rs. 1/- each were issued to the employees as exercise of employees stock option for an aggregate premium of Rs. 17 lakh (2013: Rs. 188 lakh)

2.2 Deduction during the year represents Rs. 16 Lakh (2013 - Rs. 14 Lakh) transferred to Statement of Profit and Loss.

3.1 1000 - 10.25% Secured Redeemable Non-convertible Debentures of Rs.10 Lakh each aggregating to Rs.10,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties/fixed assets both present and future situated at Pugalur and Nellikuppam. Debentures are redeemable in full at par on 6th January 2017.

3.2 2000 - 8.97% Secured Redeemable Non-convertible Debentures of Rs.10 Lakh each aggregating to Rs.20,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties/fixed assets both present and future situated at Pugalur. Debentures are redeemable in full at par on 3rd May 2016.

3.3 1,000 - 9.25% Secured Redeemable Non-convertible Debentures of Rs.10 Lakh each aggregating to Rs.10,000 Lakh to be secured by a pari passu first charge by way of a registered mortgage deed on the Company''s specific immovable properties. Debentures are redeemable in full at par on 18th March 2016.

3.4 600 - 9.15% Secured Redeemable Non-convertible Debentures of Rs.10 Lakh each aggregating to Rs.6,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties situated at Pugalur. Debentures are redeemable in full at par on 23rd October 2015.

3.5 600 - 10.40% Secured Redeemable Non-convertible Debentures of Rs.10 Lakh each aggregating to Rs.6,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties/fixed assets both present and future situated at Pettavaithalai and Pugalur and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai and Thyagavalli. Debentures are redeemable in full at par on 4th January 2015.

3.6 400 - 10.25% Secured Redeemable Non-convertible Debentures of Rs.10 Lakh each aggregating to Rs.4,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties/fixed assets both present and future situated at Pettavaithalai and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai and Thyagavalli. Debentures are redeemable in full at par on 12th July 2014.

3.7 400 - 9.40% Secured Redeemable Non-convertible Debentures of Rs.10 Lakh each aggregating to Rs.4,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties/fixed assets both present and future situated at Pettavaithalai and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai and Thyagavalli. The Debentures have been redeemed at full on the due date i.e 25th January, 2014.

3.8.1 The Rupee term loans from State Bank of India amounting to Rs. 10 Lakh are secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaithalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur and a second charge on current assets.

3.8.2 The Rupee term loans from State Bank of India amounting to Rs. 1,195 Lakh are secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaithalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur and a second charge on current assets.

3.8.3 The External Commercial Borrowings (ECB) Loan from HSBC Bank (Mauritius) Ltd., Mauritius amounting to Rs. 2,197 Lakh (Current outstanding) secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli and to be further secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaithalai, Pudukottai, Thyagavalli and Ariyur.

3.8.4.1 Rupee term loans from Axis Bank Limited are secured by pari passu first charge on fixed assets of Sankili and Haliyal plants.

3.8.4.2 Rupee term loans from ICICI Bank Limited were secured by pari passu first charge on fixed assets of Sankili and Haliyal Plants.

3.8.4.3 Rupee term loans from State Bank of India are secured by pari passu first charge on fixed assets of Sankili and Haliyal plants.

3.8.4.4 The Financial Assistance loan from State Bank of India amounting to Rs. 10,000 Lakh is secured by a pari passu first charge on fixed assets (both present and future) of the Company and second charge on the Company''s current assets . As per terms of this loan, interest @12% per annum will be directly paid by the Government to the Bank.

3.8.4.5 Term Loans extended by State Bank of India & State Bank of Mysore are primarily secured by pari passu first charge on the Plant & Machinery of the company and pari passu first charge by way of equitable mortgage of Land and Factory buildings of the Bagalkot Plant and collaterally secured by pari passu charge on the fixed assets of the Bagalkot Plant.

3.9.1The loans are secured by way of a Bank Guarantee from State Bank of India. It carries interest rate of 4% and repayable over 7 to 10 years.

3.9.2The loans are secured by way of pari passu first charge on fixed assets of Haliyal and Sankili respectively. It carries interest rate of 4% and repayable over 7 to 14 years.

3.9.3The loans are secured by way of Bank Guartantee. It carries interest rate of 6.75% and repayable over 6 to 7 years.

3.10 The Interest free loan is repayable after 11 years.

3.11There is no default in repayment of the loans and interest thereon.

4.1 Working Capital facilities from State Bank of India of Rs. 38,887 lakh are secured by hypothecation of sugar and other stocks, stores, book debts and liquid assets and further secured by a second charge over the immovable properties of the company (other than Pugalur unit) and a third charge on the movable and immovable properties of the Pugalur sugar unit.

4.2 Working Capital facility from State Bank of Mysore of Rs. 4 lakh is secured by way of first charge on current assets of the company and collaterally secured by pari passu charge on the fixed assets of the Bagalkot sugar unit.

4.3. Packing credit facility is covered by letter of credit or confirmed and irrevocable order for the export of goods / services.

4.4. Maximum amount outstanding at any time during the year was Rs.70,000 lakh (2013: Rs.50,000 lakh)

5.1 There are no dues to enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, as at March 31, 2014 which is on the basis of such parties having been identified by the management and relied upon by the auditors.

6.1 These amounts represent warrants issued to the Shareholders which remained unpresented as on March 31, 2014.

6.2 There are no amounts due to be credited to Investor Education and Protection Fund as on March 31, 2014.

6.3 Other Miscellaneous Liabilities includes liability towards Capital goods, Collections payable to bank etc.,

7.A Till last year the company has been charging depreciation on certain plant and machineries at rates higher than those specified in Schedule XIV of the Companies Act, 1956. During the year the Company carried out technical assessment of the useful lives of these assets and based on such assessment, the depreciation rates have been brought down to those as specified in Schedule XIV of the Companies Act, 1956. Consequent to the said revision in depreciation rate, the depreciation charge for the year is lower by Rs. 2,917 lakh.

8.1. During the previous year Coromandel International Ltd, a subsidiary company, has issued 17,71,55,580 Numbers of 9% Redeemable Bonus Debentures of Rs. 15 each aggregating to Rs. 26,574 Lakh to the company. This has been recognised as dividend income and disclosed as an exceptional item in the previous year. These Debentures have been fully redeemed during the year.

8.2. During the year, Company has invested in 11,00,000 fully paid Redeemable Cumulative Preference shares of Rs. 100/ - each of Silkroad Sugar Private Limited, aggregating to Rs. 1,100 Lakh.

8.3. During the year, Company has converted loans to Parrys Sugar Industries Limited amounting to Rs. 2,500 lakh into 25,00,000 fully paid Redeemable Cumulative Preference shares of Rs. 100 each and further invested in 5,00,000 fully paid Redeemable Cumulative Preference shares of Rs. 100 each of Parrys Sugar Industries Limited aggregating to Rs. 500 Lakh.

8.4. During the year, Company has converted loans to Parry Phytoremedies Private Limited amounting to Rs. 394 lakh into 3,94,000 fully paid Equity shares of Rs. 100 each and further invested in 13,06,000 fully paid Equity shares of Rs. 100/- each of Parry Phytoremedies Private Limited aggregating to Rs. 1,306 Lakh.

8.5 Fifteen Shares in Kulittalai Cane Farms Private Limited and One hundred and twenty five shares in Hawker Siddley Group Limited are in the process of being transferred in the name of the Company.

9.1 Of the above, the balances that meet the definition of Cash and cash equivalents as per AS 3 Cash Flow Statements is Rs. 3,919 Lakh (2013 - Rs. 1,144 Lakh)

9.2 Balances with banks include deposits amounting to Rs. 108 Lakh (2013 - Rs. 67 Lakh) which have an original maturity of more than 12 months.

10. Other monies for which the Company is contingently liable

Rs. in Lakh 2013-14 2012-13

(a) Letters of Credit and Bank Guarantees established for Purchases of Raw Materials, Spares and 15,128 9,638 Capital Goods

(b) Letter of comfort given to ICICI Bank in connection with the rupee term loan granted by them - 3,263 to Parrys Sugar Industries Limited, a subsidiary company.

(c) Disputed Income Tax demands which are under various stages of appeal (out of which Rs.1,578 2,056 2,232 lakh (2013 - Rs.1,578 lakh) have been paid under protest).

(d) Disputed Sales Tax , Excise Duty , Service Tax and Customs Duty demands (out of which Rs. 253 6,338 5,978 lakh (2013 - Rs. 157 lakh) have been deposited under protest).

(e) Other claims against the Company not acknowledged as debts - 173

(f) Cane price (Refer note 28.1) 5,948 -

(g) Certain Industrial Disputes are pending before Tribunal / High Courts. The liability of the Company in respect of these disputes depends upon the final outcome of such cases and the quantum of which is not currently ascertainable.

11.1 The Sugar Cane Control Board formed by the Government of Karnataka under the Karnataka Sugar Cane (Regulation of Purchase and Supply) Act , 2013, had declared a cane procurement price of Rs.2500/MT for the sugar season 13-14. This has been challenged by South India Sugar Mills Association - Karnataka (SISMA-K) before the Hon''ble High Court of Karnataka and the matter is subjudice.

12. (b) As on March 31, 2014, the Company has foreign currency borrowings of USD 3.67 million (PY USD 5 Million). The Company has marked to market the foreign currency borrowings and the exchange difference arising thereon have been recognised in the Statement of Profit and Loss.

13. DERIVATIVE TRANSACTIONS

The Company uses forward exchange contracts, interest rate swap, currency swap and currency options to hedge its exposure in foreign currency. The information on derivative instruments is as follows:

(a) Derivative Instruments outstanding as at March 31, 2014

(b) All the foreign exchange forward contracts are designated as cash flow hedges

(c) Foreign exchange currency exposures not covered by derivative instruments as at March 31, 2014 - Nil (March 2013 - Nil)

14. Amalgamation of Sadashiva Sugars Limited with the Company.

i . Pursuant to the scheme of amalgamation of Sadashiva Sugars Limited- a wholly owned subsidiary ("Transferor Company") with the Company, as sanctioned by the Honourable High Court of Karnataka vide their order dated April 4, 2014 , the assets and liabilities of the Transferor Company were transferred to and vested with the Company with effect from the appointed date, April 1, 2013. The effective date of amalgamation is May 8, 2014, on which date all the relevant requirements under the Companies Act., 1956 have been complied with.

ii. The Transferor Company is engaged in the business of manufacture and sale of Sugar and generation and sale of electricity.

iii. The amalgamation has been accounted for under the ''Pooling of interest'' method as prescribed by Accounting Standard 14 "Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules,2006 (as amended). Accordingly the assets and liabilities of the transferor company as at April 1, 2013, have been taken over at their book values.

iv. Consequent to the scheme of amalgamation, the authorized equity share capital of the Company stands increased from 51,50,00,000 equity shares of Rs.1/- each, aggregating to Rs. 5,150 Lakh to 1,62,50,00,000 equity shares of Rs. 1/- each aggregating to Rs. 16,250 Lakh.

15. EMPLOYEE BENEFIT PLANS

A. Defined contribution plans

The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 375 Lakh (Year ended March 31, 2013 - Rs. 321 Lakh) for Provident Fund contributions, Rs. 339 Lakh (Year ended March 31, 2013 - Rs. 308 Lakh) for Superannuation Fund contributions and Rs. 2 Lakh (Year ended March 31, 2013 - Rs. 2 Lakh) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

B. Defined benefit plans :

Gratuity

The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the Balance Sheet and Statement of Profit and Loss. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC).

The Company has invested the plan assets with the insurer managed funds. The insurance company has invested the plan assets in Government Securities, Debt Funds, Equity shares, Mutual Funds, Money Market Instruments and Time Deposits. The expected rate of return on plan asset is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligation. Expected contribution to the fund during the year ending March 31, 2015 is Rs.50 lakh (2013: Nil).

C. Note on Provident Fund:

With respect to the Provident Fund Trust administered by the company, the company shall make good deficiency, if any, in the interest rate declared by Trust over statutory limit. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

16. EMPLOYEE STOCK OPTION PLAN – ESOP 2007

a) Pursuant to the decision of the shareholders, at their meeting held on July 26, 2007, the Company has established an ''Employee Stock Option Scheme 2007'' (''ESOP 2007'' or ''the Scheme'') to be administered by the Compensation and Nomination Committee of the Board of Directors.

b) Under the Scheme, options not exceeding 89,24,850 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting.

c) The exercise price of the option is equal to the latest available closing market price of the shares on the stock exchange where there is highest trading volume as on the date prior to the date of the Compensation and Nomination Committee resolution approving the grant.

d) Pursuant to the above mentioned scheme, on the recommendation of the Compensation and Nomination Committee the Company has, upto March 31, 2014, granted 40,34,000 options vesting over a period of four years commencing from the respective dates of grant. The exercise price being equal to the closing market price prevailing on the date prior to the date of grant, there is no deferred compensation cost to be amortised in this regard. The company has not granted any stock options during the year 2013-14.

17. RELATED PARTY DISCLOSURE FOR THE YEAR ENDED MARCH 31, 2014 A Subsidiary Companies/ Entities

1. Coromandel International Limited

2. Parry Chemicals Limited

3. CFL Mauritius Limited

4. Coromandel Brasil Limitada – Partnership.

5. Liberty Phosphate Limited (Upto March 31, 2013)

6. Liberty Urvarak Limited ((Upto March 31, 2013)

7. Liberty Pesticides and Fertilisers Limited

8. Dare Investments Limited

9. Sabero Organics Gujarat Limited

10. Sabero Europe BV

11. Sabero Australia Pty. Limited

12. Sabero Organics America Ltda

13. Sabero Argentina SA

14. Sabero Organics Mexico S.A De C.V.

15. Parrys Sugar Industries Limited

16. Alagawadi Bireshwar Sugars Private Limited

17. Sadashiva Sugars Limited (Upto March 31, 2013)

18. Parry America Inc.,

19. Parrys Investments Limited

20. Parrys Sugar Limited

21. Parry Infrastructure Company Private Limited

22. Parry Phytoremedies Private Limited

23. US Nutraceuticals LLC

24. Parry Agrochem Exports Limited

25. Valensa Europe AG (Upto May 31, 2013)

26. La Belle Botanics LLC

27. Silkroad Sugar Private Limited (From December 12, 2012)

Joint Venture Company

1. Silkroad Sugar Private Limited (Upto December 11, 2012)

Investing Party

1. Murugappa Holdings Limited

B. Key Management Personnel (KMP)

Mr.Ravindra S Singhvi, Managing Director (upto April 10, 2013)

Mr.V Ramesh, Managing Director, (from January 30, 2014)

Note : Related Party Relationships are as identified by the management and relied upon by the auditors.

18. As part of the growth strategy for the Nutraceuticals Business, E.I.D.-Parry (India) Limited., has acquired 100% stake in Alimtec S.A., Chile, part of the Bayer Group. The acquisition is by way of purchase of the stake from Bayer Finance and Portfolio Management S.A., and Nunhems Chile S.A., subsidiaries of Bayer AG. on 25th April 2014.

19. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification / disclosure. The financial statements for the current year include the figures relating to Sadashiva Sugars Limited whose assets and liabilities have been transferred to and vested with the Company with effect from April 1, 2013 pursuant to the Scheme of Amalgamation (Refer Note 31). Hence the current year figures are not comparable with that of the previous year.


Mar 31, 2013

Corporate information

E.I.D. Parry is a significant player in Sugar with interests in promising areas of Bio Pesticides and Nutraceuticals. The company also has a significant presence in Farm Inputs business through its subsidiary, Coromandel International Limited.

EID Parry together with its subsidiaries has nine sugar factories having a capacity to crush 34,750 Tonnes of Cane per day, generate 146 MW of power and four distilleries having a capacity of 230 KLPD. In the Bio Pesticides business, the Company offers a unique neem extract, Azadirachtin, having a good demand in the developed countries'' bio pesticide markets. In the Nutraceuticals business, it holds a strong position in the growing wellness segment mainly catering to the world markets with its organic products.

1.1 The above equity share capital is net off 62,69,402 Equity Shares of Rs. 1/- each, bought back by the company during the year 2008-09.

1.2 Under the Employee Stock Option Plan - ESOP 2007, options not exceeding 89,24,850 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting.

Total options outstanding as at March 2013 - 6,40,342 (March 2012- 11,53,654) equity shares ofRs. 1/- each. Refer note 42 for other details about the scheme.

1.3 Terms attached to Equity shares

The Company has only one class of Equity share having a par value of Rs. 1/- per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital on liquidation will be in proportion to the number of equity shares held.

During the year ended 31st March 2013, the amount of interim dividend recognized as distributions to equity shareholders is Rs. 6/- per share (2012- Rs. 4/- per share).

2.1 1,000 - 9.25% Secured Redeemable Non-convertible Debentures ofRs. 10 Lakh each aggregating to Rs. 10,000 Lakh to be secured by a pari passu first charge by way of a registered mortgage deed on the Company''s specific immovable properties. Debentures are redeemable in full at par on 18th March 2016.

2.2 600 - 9.15% Secured Redeemable Non-convertible Debentures ofRs. 10 Lakh each aggregating to Rs. 6,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties situated at Pugalur. Debentures are redeemable in full at par on 23rd October 2015.

2.3 600 - 10.40% Secured Redeemable Non-convertible Debentures ofRs. 10 Lakh each aggregating to Rs. 6,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties / fixed assets both present and future situated at Pettavaithalai and Pugalur and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai and Thyagavalli. Debentures are redeemable in full at par on 3rd January, 2015.

2.4 400 - 10.25% Secured Redeemable Non-Convertible Debentures ofRs. 10 Lakh each aggregating to Rs. 4,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties/fixed assets both present and future situated at Pettavaithalai and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai and Thyagavalli. Debentures are redeemable in full at par on 11th July, 2014.

2.5 400 - 9.40% Secured Redeemable Non-Convertible Debentures of Rs. 10 Lakh each aggregating to Rs. 4,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties/fixed assets both present and future situated at Pettavaithalai and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai and Thyagavalli. Debentures are redeemable in full at par on 27th January, 2014.

2.6 500 - 8.65% Secured Redeemable Non-Convertible Debentures of Rs. 10 Lakh each aggregating to Rs. 5,000 Lakh are secured by a pari passu first charge by way of a registered mortgage deed on the Company''s immovable properties / fixed assets both present and future situated at Pugalur and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai and Thyagavalli. Debentures are redeemed in full at par on 4th September, 2012.

2.7.1 The Rupee term loans from State Bank of India amounting to Rs. 20 Lakh are secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaithalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur and a second charge on current assets.

2.7.2 The Rupee term loans from State Bank of India amounting to Rs. 2,173 Lakh are secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaithalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur and a second charge on current assets.

2.7.3 The External Commercial Borrowings (ECB) Loan from HSBC Bank (Mauritius) Ltd., Mauritius amounting to Rs. 2,741 Lakh (US$ 5 Million) is secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli and further secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaitalai, Pudukottai, Thyagavalli and Ariyur.

2.7.4.1Rupee term loans from Axis Bank Limited are secured by pari passu first charge on fixed assets of Sankili and Haliyal plants.

2.7.4.2Rupee term loans from ICICI Bank Limited are secured by pari passu first charge on fixed assets of Sankili and Haliyal Plants.

2.7.4.3Rupee term loans from State Bank of India are secured by pari passu first charge on fixed assets of Sankili and Haliyal plants.

2.8.1 The loans are secured by way of a Bank Guarantee from State Bank of India. It carries interest rate of 4% and repayable over 7 to 14 years.

2.8.2 The loans are secured byway of pari passu first charge on fixed assets of Haliyal and Sankili respectively. It carries interest rate of 4% and repayable over 7 to 14 years.

2.9 The Interest free loan is repayable after 12 years.

2.10 There is no default in repayment of the loans and interest thereon.

3.1 Working Capital facilities from State Bank of India are secured by hypothecation of sugar and other stocks, stores, book debts and liquid assets and further secured by a second charge over the immovable properties of the company (other than Pugalur unit).

3.2. Packing credit facility is covered by letter of credit or confirmed and irrevocable order for the export of goods / services.

4.1 There are no dues to enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, as at March 31, 2013 which is on the basis of such parties having been identified by the management and relied upon by the auditors.

5.1 These amounts represent warrants issued to the Shareholders which remained unpresented as on March 31, 2013.

5.2 There are no amounts due to be credited to Investor Education and Protection Fund as on March 31, 2013.

5.3 Other Miscellaneous Liabilities includes liability towards Cane Differential price, capital goods etc.,

6.1. Coromandel International Ltd, a subsidiary company, has issued 17,71,55,580 Numbers of 9% Redeemable Bonus Debentures of Rs. 15/- each aggregating to Rs. 26,574 Lakh to the company. This has been recognised as dividend income and disclosed as an exceptional item. The Debentures are redeemable in 3 equal annual installments of Rs. 8,858 Lakh from 2014-15.

6.2 During the year, a portion of unsecured loans given to Sadashiva Sugars Ltd has been converted into 5,00,00,000 Equity shares of Rs. 10/- each.

6.3 During the year, the Company has increased its stake in Silkroad Sugar Private limited, from 50% to 99% by buying out the entire stake of its foreign Joint Venture partner- Cargill Asia Pacific Holdings Pte Limited for a consideration ofRs. 3,557 Lakh. Consequent to this acquisition, Silkroad Sugar Private Limited has become a subsidiary of the Company, with effect from 12th December, 2012.

6.4. During the year, a portion of unsecured loan given to Parrys Sugar Industries Ltd has been converted into 1,50,00,000 Nos. of 8% Redeemable Preference Share Capital ofRs. 10/- each.

6.5 15 Shares in Kulittalai Cane Farms Private Limited and 125 shares in Hawker Siddley Group Limited are in the process of being transferred in the name of the Company.

6.6 Refer note 1.10 for valuation of investments.

7.1 Of the above, the balances that meet the definition of Cash and cash equivalents as per AS 3 Cash Flow Statements is Rs. 1,146 Lakh (2012 - Rs. 2,810 Lakh)

7.2 Balances with banks include deposits amounting to Rs. 67 Lakh (2012 - Rs. 15 Lakh) which have an original maturity of more than 12 months.

8.1 Other borrowing costs include interest and finance charges relating to working capital loan, commercial papers, commitment charges, loan processing charges, loan facilitation charges, discounts /premiums on borrowings and other ancillary costs.

9.1 Total Excise Duty on Sales for the year has been disclosed as reduction from the turnover. Excise duty related to the difference between the closing stock and opening stock amounting to Rs. 1,688 Lakh (2012 - Rs. 250 Lakh ) has been included in Rates and Taxes.

NOTE 10 (B)

As on March 31, 2013, the Company has foreign currency borrowings of US$ 5 million (2012 - US$ 4 Million). The Company has marked to market the foreign currency borrowings and the exchange difference arising thereon have been recognised in the Statement of Profit and Loss.

NOTE 11

Derivative transactions

The Company uses forward exchange contracts, interest rate swap, currency swap and currency options to hedge its exposure in foreign currency.The information on derivative instruments is as follows:

NOTE 12

SCHEME OF ARRANGEMENT

Pursuant to the Scheme of Arrangement (Demerger), herein after referred to as "the Scheme", between subsidiary company Parrys Sugar Industries Limited (Demerged Company), and the Company, as sanctioned by the Hon''ble High Court of Judicature at Madras, vide their order dated February 18,2013, the entire assets and liabilities and duties and obligations of manufacturing facilities at Haliyal and Sankili (Demerged Undertaking) pertaining to the Demerged Company , was transferred to and vested in the Company with effect from April 1, ,2012 (Appointed Date). The scheme became effective on March 18, 2013 and accordingly has been given effect to in these financial statements.

12.1) The Company has issued 18,38,578 equity shares of Rs. 1/- each aggregating to Rs. 18.38 Lakh to the shareholders of the demerged company other than the company, on March 28, 2013, in the ratio of five equity shares ofRs. 1/- each credited as fully paid up, for every nineteen equity shares ofRs. 10/-each held in the Demerged Company.

12.2) The cost of the investments held in the Parrys Sugar Industries Ltd as appearing in the Company''s books has been reduced in the proportion of the Net Book value of the assets of the Demerged Undertaking bears to the Net worth of the Demerged Company immediately before the appointed date. The said reduction in cost of investments amounted to Rs. 6,806 Lakh.

12.3) (a) The entire 10,00,00,000-8% Redeemable Cumulative Preference Shares ofRs. 10/- each held by the Company in the Demerged Company has been cancelled.

(b) The 1,05,05,460 8% Redeemable Cumulative Preference Shares ofRs. 11/- each held by the Company in the Demerged Company has been cancelled. The reduction in cost of investments on account of this cancellation isRs. 1,156 Lakh.

12.4) The excess of liabilities over book value of assets after making adjustments for 2 to 4 above amounting to Rs. 12,542 Lakh has been debited to Goodwill account. Such goodwill to the extent of Rs. 1,348 lakh has been adjusted against Capital Reserve Account and the balance amount ofRs. 11,194 Lakh has been adjusted against the General Reserve.

12.5) The results for the year ended March 31, 2013 also include the results of Haliyal and Sankili units of Demerged Company.

NOTE 13

EMPLOYEE BENEFIT PLANS

A. Defined contribution plans

The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Linder the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 321 lakh (Year ended March 31, 2012 -Rs. 277 Lakh) for Provident Fund contributions, Rs. 308 Lakh (Year ended March 31, 2012- Rs. 271 Lakh) for Superannuation Fund contributions and Rs. 2 Lakh (Year ended March 31, 2012 - Rs. 1 Lakh) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

B. Defined benefit plans :

Gratuity -

The following table sets forth the status of the Gratuity Plan of the Company and the amount recognized in the Balance Sheet and Statement of Profit and Loss.

14. Employee Stock Option Plan - ESOP 2007

a) Pursuant to the decision of the shareholders, at their meeting held on July 26, 2007, the Company has established an ''Employee Stock Option Scheme 2007'' (''ESOP 2007'' or ''the Scheme'') to be administered by the Compensation and Nomination Committee of the Board of Directors.

b) Under the Scheme, options not exceeding 89,24,850 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting.

c) The exercise price of the option is equal to the latest available closing market price of the shares on the stock exchange where there is highest trading volume as on the date prior to the date of the Compensation and Nomination Committee resolution approving the grant.

d) Pursuant to the above mentioned scheme, on the recommendation of the Compensation and Nomination Committee the Company has, upto 31st March 2013, granted 40,34,000 options vesting over a period of four years commencing from the respective dates of grant. The exercise price being equal to the closing market price prevailing on the date prior to the date of grant, there is no deferred compensation cost to be amortised in this regard. The company has not granted any stock options during the year 2012-13.

15. Related Party Disclosure for the year ended March 31, 2013

15.1. Subsidiary Company/ Entities

1. Coromandel International Ltd

2. Parry Chemicals Ltd

3. CFL Mauritius Limited

4. Coromandel Brasil Limitada - Partnership.

5. Liberty Phosphate Ltd

6. Liberty Urvarak Limited

7. Liberty Pesticides and Fertilisers Limited

8. Dare Investments Ltd

9. Sabero Organics Gujarat Limited

10. Sabero Europe BV

11. Sabero Australia Pty.Ltd

12. Sabero Organics America Ltda

13. Sabero Argentina SA

14. Parrys Sugar Industries Ltd

15. Alagawadi Bireshwar Sugars Private Limited

16. Sadashiva Sugars Ltd

17. Parry America Inc.,

18. Parrys Investments Limited

19. Parrys Sugar Limited

20. Parry Infrastructure Company Private Limited

21. Parry Phytoremedies Private Limited

22. US Nutraceuticals LLC

23. Parry Agrochem Exports Limited

24. Valensa Europe AG

25. La Belle Botanies LLC

26. Silkroad Sugar Private Limited (From December 12, 2012)

Joint Venture Company

1. Silkroad Sugar Private Limited (Upto December 11, 2012)

Associate Company (Investing Party)

1. Murugappa Holdings Limited

15.2 Key Management Personnel (KMP)

Mr. Ravindra S Singhvi, Managing Director

Note : Related Party Relationships are as identified by the management and relied upon by the auditors.

Transactions with Parrys Sugar Industries Limited represents those with Ramdurg unit only, (pursuant to a scheme of arrangement (demerger)- (Refer note 30), Sankili and Haliyal units of Parrys Sugar Industries Limited have merged with the Company.

15.3.1 During the year Rs. 5,000 Lakh has been converted into Equity shares out of the loans given to Sadashiva Sugars Limited.

15.3.2 During the year Rs. 1,500 Lakh has been converted into Preference shares out of the loans given to Parrys Sugar Industries Limited.

16. Mr. Ravindra S Singhvi, Managing Director resigned from the Company on April 10, 2013 and Mr. P. Gopalakrishnan has been appointed as the Manager by the Board of Directors, subject to the approval of the Shareholders.

17. The financial statements for the current year include the figures relating to Haliyal & Sankili units of Parrys Sugar Industries Limited whose assets and liabilities have been transferred to and vested with the Company with effect from April 1, 2012 pursuant to a scheme of arrangement (demerger)- (Refer note 30). Hence the current year figures are not comparable with that of the previous year.

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


Mar 31, 2012

Corporate information

E.I.D. Parry is a significant player in Sugar with interests in promising areas of Bio Pesticides and Nutraceuticals. The company also has a significant presence in Farm Inputs business through its subsidiary, Coromandel International Limited.

EID Parry together with its subsidiaries has nine sugar factories having a capacity to crush 34,750 Tonnes of Cane per day, generate 146 MW of power and four distilleries having a capacity of 230 KLPD. In the Bio Pesticides business, the Company offers a unique neem extract, Azadirachtin, having a good demand in the developed countries' bio pesticide markets. In the Nutraceuticals business, it holds a strong position in the growing wellness segment mainly catering to the world markets with its organic products.

1.1 The above equity share capital is net off 6,269,402 Equity Shares of Re.1 each, bought back by the company during the year 2008-09.

1.2 Under the Employee Stock Option Plan - ESOP 2007, options not exceeding 8,924,850 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting.

Total options outstanding as at March 2012 - 1,153,654 (March 2011- 1,733,120) equity shares of Re.1 each. Refer Note No. 41 for other details about the scheme.

1.3 Terms attached to Equity shares

The Company has only one class of equity share having a par value of Re.1 per share. Each holder of equity share is entitled to one vote per share. The dividend when proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Repayment of capital on liquidation will be in proportion to the number of equity shares held.

During the year ended 31st March 2012, the amount of dividend recognized as distributions to equity shareholders is Rs. 4 per share (2011- Rs. 2 per share).

Note

2.1 During the year 464,276 equity shares of Re.1 each were issued to the employees on exercise of Employees Stock Option for an aggregate premium of Rs. 360 Lakhs (2011 : Rs. 365 Lakhs)

2.2 Debenture Redemption Reserve account has been created for Rs.1,583 Lakhs (2011 - Rs. 750 Lakhs) by transfer from statement of profit and loss for Non-convertible Debentures of Rs. 19,000 Lakhs (2011 - 9,000 Lakhs).

2.3 Deduction during the year represents Rs. 14 Lakhs (2011 - Rs. 14 Lakhs) transferred to Statement of profit and loss.

3.1 600 - 10.40% Secured Redeemable Non-convertible Debentures of Rs.10 Lakhs each aggregating to Rs.6,000 Lakhs are secured by a pari passu first charge by way of a registered mortgage deed on the Company's immovable properties/fixed assets both present and future situated at Pettavaithalai and Pugalur and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli. Debentures are redeemable in full at par on 4th January 2015.

3.2 400 - 10.25% Secured Redeemable Non-convertible Debentures of Rs.10 Lakhs each aggregating to Rs.4,000 Lakhs are secured by a pari passu first charge by way of a registered mortgage deed on the Company's immovable properties/fixed assets both present and future situated at Pettavaithalai and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli. Debentures are redeemable in full at par on 12th July 2014.

3.3 400 - 9.40% Secured Redeemable Non-convertible Debentures of Rs.10 Lakhs each aggregating to Rs.4,000 Lakhs are secured by a pari passu first charge by way of a registered mortgage deed on the Company's immovable properties/fixed assets both present and future situated at Pettavaithalai and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli. Debentures are redeemable in full at par on 27th January 2014.

3.4 500 - 8.65% Secured Redeemable Non-convertible Debentures of Rs.10 Lakhs each aggregating to Rs.5,000 Lakhs are secured by a pari passu first charge by way of a registered mortgage deed on the Company's immovable properties/ fixed assets both present and future situated at Pugalur and further secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli. Debentures are redeemable in full at par on 4th September 2012.

3.5.1 The Rupee term loan from HDFC Bank Limited amounting to Rs. 13 Lakhs is secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Pugalur and Pudukottai and further secured by a pari passu first charge on the immovable properties both present and future situated at Pugalur and Pudukottai.

3.5.2 The Rupee term loans from State Bank of India amounting to Rs. 1,200 Lakhs are secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur and a second charge on current assets.

3.5.3 The Rupee term loan from Canara Bank amounting to Rs. 1,250 Lakhs is secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur.

3.5.4 The Rupee term loans from State Bank of India amounting to Rs. 3,151 Lakhs are secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur and a second charge on current assets.

3.5.5 The Rupee term loan from IndusInd Bank Limited amounting to Rs. 5,000 Lakhs is secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaittalai, Pudukottai, Thyagavalli and Ariyur and further secured by a pari passu first charge on the immovable properties situated at these places except Ariyur.

3.5.6 The External Commercial Borrowings (ECB) Loan from HSBC Bank (Mauritius) Ltd. Mauritius amounting to Rs. 1,989 Lakhs (USD 4 Million) is secured by a pari passu first charge on the immovable properties situated at Nellikuppam, Pugalur, Pudukottai, and Thyagavalli and to be further secured by a pari passu first charge by way of hypothecation of all the movable plant and machinery and other movable assets both present and future situated at Nellikuppam, Pugalur, Pettavaitalai, Pudukottai, Thyagavalli and Ariyur. The company has entered into currency swap arrangement for hedging principal and interest payments.These arrangements have been recognized and the amount of borrowings has been stated in the books in Rupee values as per the said arrangement.

3.6 Loan from Sugar Development Fund (Government of India) for modernisation/expansion/ cogeneration amounting to Rs. 8,775 Lakhs is secured by way of a Bank Guarantee from State Bank of India. It carries interest rate of 4% and repayable over 7 to 14 years.

3.7 The Interest free loan is repayable after 13 years.

3.8 There is no default in repayment of the loans and interest thereon.

4.1 Working Capital facilities from State Bank of India are secured by hypothecation of sugar and other stocks, stores, book debts and liquid assets and further secured by a second charge over the immovable properties of the company (other than Pugalur unit) and a third charge on the movable and immovable properties of the Pugalur sugar unit.

4.2. Packing credit facility on the basis of letter of credit or confirmed and irrevocable order for the export of goods / services.

5.1 There are no dues to enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, as at March 31, 2012 which is on the basis of such parties having been identified by the management.

6.1. Amortization of Leasehold land for the year is Rs.0.08 Lakhs (2011 - 0.08 Lakhs).

6.2 Includes cost of Rs.31 Lakhs ( 2011 - Rs.31 Lakhs) for which title deeds are yet to be received from the Registrar.

6.3 Includes Building on Leasehold land : Cost: Rs. 884.41 Lakhs (2011 - Rs. 884.41 Lakhs) and Accumulated Depreciation : Rs.229.27 Lakhs (2011 - Rs. 214.54 Lakhs).

6.4 Additions for the year 2012 includes Rs. 14.87 Lakhs (2011 - Rs. 28 Lakhs) of Fixed Assets additions made in the Approved In-house R & D Centres.

7.1 1 Shares in Kulittalai Cane Farms Private Limited and 125 shares in Hawker Siddley Group Limited are in the process of being transferred in the name of the Company.

7.2 The company has acquired additional stake of 42.52% in US Nutraceuticals LLC, for a consideration of Rs. 2,230 Lakhs during October 2011. The company has thereby obtained 100% voting rights in that company.

7.3 Refer note 1.10 for valuation of investments.

7.4 The Joint Venture company Silkroad Sugar Private Limited had set up a sugar refinery and a power plant (project) in a Special Economic Zone at Kakinada, Andhra Pradesh. The Joint Venture Company commenced commercial production from October 1, 2010.The project envisaged that the gas for operations will be available in adequate quantities for its operations and would give good returns on capital employed. The operations were commenced with the partial availability of gas with an expectation that there will be an increased availability. However due to inadequate supply of gas, the operations had to be discontinued from 2nd November 2011. In order to meet minimum fixed expense and to service working capital loans, the Joint Venture partner Cargill Asia Pacific Holdings Pte Limited and the company have made further investments aggregating to Rs.22,500 Lakhs in equity shares of Joint Venture Company during the year . Considering the uncertainty in availability of gas as a fuel, coal is being considered as an alternative fuel. The Joint Venture company has initiated appropriate steps for procurement / installation of coal fired boiler and the operations are expected to be re-commenced by the end of 2013.

-Further the Joint Venture Company has submitted proposals to its lenders for restructuring of the loan facilities which is under active consideration of respective lenders.

In view of the Joint Venture Company's efforts to revive its operation, the erosion in Net Worth of the company which is at 60% as at March 31, 2012 is considered by the management not other than of temporary in nature and accordingly no provision is considered necessary for the diminution in the value of investment.

7.5 The company has increased its stake in Sadashiva Sugars Limited (SSL), subsidiary company from 76% to 100% by acquiring 1,44,66,600 equity shares of Rs. 10 each for Rs. 1,834 Lakhs during September 2011.

7.6 The Board of Directors approved a Scheme of Arrangement (Demerger) pursuant to which some of the undertakings of Parrys Sugar Industries Limited (PSIL), a Subsidiary of E.I.D.-Parry (India) Limited, will be merged with the company effective 1st April 2012. This is subject to various statutory and regulatory approvals.

8.1 Includes Interest on loan receivable from related parties : Short Term Rs. 1,977 Lakhs (2011 - Rs. 551 Lakhs)

8.1 Mode of valuation of Inventories - Refer Note No 1.3

8.2 Refer Note 35 for details of work-in-process, finished goods and stock-in-trade.

9.1 The above amount includes due from related parties - Rs.2,038 Lakhs (2011 - Rs.1,350 Lakhs)

9.2 The above amount includes Insurance claim receivable : Rs. 472 Lakhs ( 2011 - NIL)

10.1 Of the above, the balances that meet the definition of Cash and cash equivalents as per AS 3 Cash Flow Statements is Rs. 2,810 Lakhs (2011 - Rs. 310 Lakhs)

11.1 Balances with banks include deposits amounting to Rs. 15 Lakhs (2011 - 2,118 Lakhs) which have an original maturity of more than 12 months.

12.1 The above raw material consumption includes Rates and Taxes of Rs. 2,851 Lakhs (2011 - Rs. 1,760 Lakhs).

12.2 Includes liability relating to earlier years Rs. 826 lakhs (2011 - Nil)

13.1 Other borrowing costs include interest and finance charges relating to working capital loan, commercial papers, commitment charges, loan processing charges, loan facilitation charges, discounts /premiums on borrowings and other ancillary costs.

14.1 Total Excise Duty on Sales for the year has been disclosed as reduction from the turnover. Excise duty related to the difference between the closing stock and opening stock has been included in other expenses.

(iii) Derivative transactions

The Company uses forward exchange contracts, interest rate swap, currency swap and currency options to hedge its exposure in foreign currency. The information on derivative instruments is as follows:

(b) All the foreign exchange forward contracts are designated as cash flow hedges.

(c) Foreign exchange currency exposures not covered by derivative instruments as at March 31, 2012 - Nil (March 2011 - Nil)

In the absence of detailed information regarding Plan assets which is funded with Life Insurance Corporation of India, the composition of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not been disclosed. The details of experience adjustments arising on account of plan assets and liabilities as required by paragraph 120(n)(ii) of AS 15 (Revised) on "Employee Benefits" are not readily available in the valuation report and hence, are not furnished.

Note on Provident Fund

With respect to the Provident Fund Trust administered by the company, the company shall make good deficiency, if any, in the interest rate declared by Trust over statutory limit. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any deficiency in the foreseeable future.

15. Employee Stock Option Plan - ESOP 2007

a) Pursuant to the decision of the shareholders, at their meeting held on July 26, 2007, the Company has established an 'Employee Stock Option Scheme 2007' ('ESOP 2007' or 'the Scheme') to be administered by the Compensation and Nomination Committee of the Board of Directors.

b) Under the Scheme, options not exceeding 8,924,850 have been reserved to be issued to the eligible employees, with each option conferring a right upon the employee to apply for one equity share. The options granted under the Scheme would vest not less than one year and not more than five years from the date of grant of the options. The options granted to the employees would be capable of being exercised within a period of three years from the date of vesting.

c) The exercise price of the option is equal to the latest available closing market price of the shares on the stock exchange where there is highest trading volume as on the date prior to the date of the Compensation and Nomination Committee resolution approving the grant.

d) Pursuant to the above mentioned scheme, on the recommendation of the Compensation and Nomination Committee, the Company has, up to 31st March 2012, granted 4,034,000 options vesting over a period of four years commencing from the respective dates of grant. The exercise price being equal to the closing market price prevailing on the date prior to the date of grant, there is no deferred compensation cost to be amortized in this regard. The company has granted 285,900 stock options during the year 2011-12.

Inter segment Transfer Pricing:

Inter Segment prices are normally negotiated amongst the segments with reference to cost, market prices and business risks, within an overall optimisation objective for the enterprise.

16. Related Party Disclosure for the year ended 31st March 2012

16.1. Subsidiary Companies/ Entities

1. Coromandel International Ltd.,

2. Parry Chemicals Ltd.,

3. CFL Mauritius Limited

4. Coromandel Brasil Limitada - Partnership.

5. Sabero Organics Gujarat Limited

6. Sabero Europe BV

7. Sabero Australia Pty.Ltd.,

8. Sabero Organics America SA

9. Sabero Argentina SA

10. Parrys Sugar Industries Ltd.,

11. Alagwadi Bireshwar Sugars Private Limited

12. Sadashiva Sugars Ltd.,

13. Parry America Inc.,

14. Parrys Investments Limited

15. Parrys Sugar Limited

16. Parry Infrastructure Company Private Limited

17. Parry Phytoremedies Private Limited

18. US Nutraceuticals LLC.,

19. Parry Agrochem Exports Limited

20. Valensa Europe AG

21. La Belle Botanics LLC.,

Joint Venture Company

1. Silkroad Sugar Private Limited

Associate Company (Investing Party)

1. Murugappa Holdings Limited (Previously known as Parry Agro Industries Limited)

16.2 Key Management Personnel (KMP)

Mr. Ravindra S Singhvi, Managing Director

Note : Related Party Relationships are as identified by the management and relied upon by the auditors.

16.2.1 - During the year Rs.10,000 Lakhs has been converted into Preference shares out of the loans given to Parrys Sugar Industries Limited

16.2.2 - During the year, dividend paid to Murugappa Holdings Limited (Investing Party) amounts to Rs. 2,349.41 Lakhs (2011 - Rs. 1,174.70 Lakhs)

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

 
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