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Notes to Accounts of Gayatri Sugars Ltd.

Mar 31, 2017

(ii) Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of '' 10 each. Each equity shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend. 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 number of equity shares held by the shareholders.

(iii) Rights, preferences and restrictions attached to preference shares:

a) 25,000,000 - 6% Cumulative redeemable preference shares of '' 10 each are due for redemption on or before 30 September,2023.

b) Variation in terms of 9,536,813 - 6% Cumulative redeemable preference shares of '' 10 each which were due for redemption on April 1, 2017 are as under:

i) Waiver of arrears of preference dividend till 1st April 2017.

ii) Period of redemption extended from April 1, 2017 to April 1, 2029 with an early redemption right to the Company before the extended period of 12 years by giving 30 days notice.

These terms were approved by Preference shareholders vide resolution dated 30 March, 2017.

c) Variation in terms of 6,610,210 - 6% Cumulative optionally convertible preference shares of Rs, 10 each which were due for redemption on 1 April, 2015, are as under:

i) Waiver of arrears of preference dividend till 1 April, 2015.

ii) Changing the nomenclature to 6% cumulative redeemable preference shares of Rs, 10 each w.e.f. 1 April, 2015.

iii) Period of redemption extended from 1 April, 2015 to 1 April, 2025 with an early redemption right to the Company before the extended period of 10 years by giving 30 days notice.

These terms were approved by preference shareholders vide resolution dated 20 March, 2015.

v) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

a) Equity shares: Issued 12,829,043 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

b) 6% Cumulative optionally convertible preference shares: Issued 6,610,210 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

vii) Arrears of fixed cumulative dividends on preference shares :

Dividend on 6% cumulative redeemable preference shares- Rs, 436.86 lakhs (31 March, 2016 Rs, 762.18 lakhs).

Details of security for the short - term borrowings :

(i) First charge on all chargeable current assets of the Company (viz.) sugar, molasses, bagasse, stores and spares, extra neutral alcohol, rectified spirit and receivables on pari-passu basis with other members of the consortium lenders.

(ii) Second charge on the Company''s present and future fixed assets (both moveable and immovable) of sugar unit and distillery unit situated at Adloor Yellareddy Village, Sadashivnagar Mandal, Kamareddy District and sugar unit located at Maggi village, Kamareddy District of Telangana State on pari-passu basis with the other members of the Consortium, SDF and NCD holders.

(iii) First pari pasu charge on pledge of 79 lakh shares of Gayatri Sugars Limited belonging to Smt. T. Indira Subbarami Reddy and Sri T.V. Sandeep Kumar Reddy, on pari-passu basis with other members of the consortium lenders.

(iv) Personal guarantee of Shri T.V. Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy and Smt. T. Sarita Reddy.

*The The Company had made the provision towards preference dividend (6% Cumulative redeemable preference shares) of Rs, 57.22 lakhs and dividend distribution tax thereon of Rs, 8.03 lakhs during the year ended March 31, 2007. In view of the carried forward losses in the books, the Company had not remitted the dividend and tax thereon and was in the process of obtaining consent for not remitting the same. Subsequently, the Company has remitted the amount to the preference shareholder.

Note : Margin money deposits amounting to Rs, 1.51 lakhs (As at 31 March, 2016 : Rs, Nil) which have a maturity of more than twelve months from the balance sheet date have been classified under other noncurrent assets [Refer Note. 14].

During the year, the Company has specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November, 2016 to 30 December, 2016. The denomination wise SBNs and other notes as per the notification is given below : in ''

1.Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

Based on the information available with the Company, there are no dues / interest outstanding to micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006, as at 31 March, 2017 (As at 31 March, 2016 : Nil)

2. The cane development incentive will be paid by the company to encourage farmers to harvest the sugar crop and supply sugarcane to the Company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

Note 27 Employee benefit plans

(a) Defined contribution plans

The Company makes provident fund to 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 recognized Rs, 87.00 lakhs (31 March, 2016: Rs, 81.93 lakhs) for provident fund 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

The Company offers the following employee benefit schemes to its employees:

i. Gratuity (Unfunded)

ii. Compensated Absences

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note 3. Related party disclosures

(i) Names of the related parties and their relationship:

Description of relationship Names of related parties

Promoter / Shareholder Dr. T Subbarami Reddy

Key Management Personnel (KMP) Smt. T. Indira Subbarami Reddy - Director

Sri. T.V. Sandeep Kumar Reddy -Vice Chairman Smt. T. Sarita Reddy- Executive Director Mr. V.R. Prasad - Chief Financial Officer Ms. Munmun Baid - Company Secretary

Enterprises in which KMP / Relatives of KMP Gayatri Projects Limited

can exercise significant influence. TSR Holdings Private Limited

Deep Corporation Private Limited Gayatri Fin-Holdings Private Limited Gayatri Hi-tech Hotels Limited Gayatri Capital Limited Gayatri Leasefin Private Limited T. Gayatri Engg. Co. Private Ltd T. Rajeev Reddy Real Estates Developers Pvt. Ltd. T. Anirudh Reddy Builders & Developers Pvt. Ltd. Maheswari Hotels & Theatres Private Limited Maheswari Film Productions Private Limited Indira Publications Private Limited Parameshwari Land Holdings Private Limited Gayatri Property Ventures Private Limited Gayatri Urban Ventures Private Limited Sandeep Housing Developers Private Limited Gayatri Realty Ventures Private Limited Indira Realty Holdings Private Limited Maheswari Townships Private Limited Sarita Land Holdings Private Limited Gayatri Contech Private Limited Indira Constructions Private Limited Gayatri Hotel Ventures Private Limited Gayatri Hotels and Theatres Private Limited Gayatri Tissue & Papers Limited Gayatri Bio Organics Limited Indira Energy Holdings Private Limited Trust under Common Management TSR Foundation

Note: Related parties have been identified by the Management.

Note 4. There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

Note 5."The Hon''ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh dismissed the Company''s writ petition (along with the other petitions on the same matter filed by other companies) vide its common order dated May 19, 2016 (''the Order'') in which it upheld the validity of levy of Electricity Duty @ 25 paisa per unit by the State Government on consumption of electricity by captive generating units relating to earlier years. During the year, the Company filed a Special Leave Petition (SLP) in the Hon''ble Supreme Court which dismissed the SLP vide order dated September 27, 2016 on the grounds that these matters were pending before the Board for Industrial and Financial Reconstruction (BIFR), and unless payments were being made by the petitioners as directed in its interim orders @15 paisa per unit. The Hon''ble Supreme Court also granted liberty to the petitioners to revive the petitions after the decision is given by the BIFR. Currently, the case filed before BIFR stands abated and the Company has not initiated any proceedings before the NCLT."

The Company has treated the estimated duty amount aggregating Rs, 283.99 lakhs as a Contingent Liability and no provision has been made in respect of the same. In the event of an unfavorable verdict in this matter, the Management based on the Supreme Court''s interim orders and considering the inherent uncertainty in predicting the final outcome of the above litigation estimates the impact of the potential liability to be Rs, 170.39 lakhs.

In view of the above, the auditors have made a qualification in their Audit Report about their inability to comment on the ultimate outcome of this matter and the consequential impact, if any, on these financial statements.

Note 6. Over the last few years, the Company has been incurring losses and as at March 31, 2017 the accumulated losses amounting to Rs, 12,804.58 lakhs (Previous year Rs, 13,884.97 lakhs) have completely eroded the net worth and, its current liabilities exceeded the current assets as on that date. The Sugar Companies have been facing financial difficulties on account of higher sugar cane prices, lower realization of sugar and high finance cost.

Owing to the complete erosion of the net-worth of the Company, the Board of Directors, in their meeting held on August 14, 2015 decided to make a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the Board for Industrial and Financial Reconstruction (BIFR) which in their hearing held on October 19, 2016 declared the Company as a Sick Industrial Company under section 3 (1) (0) of SICA, 1985. The BIFR appointed IDBI as the Operating Agency (OA) and the Company was required to submit the Draft Rehabilitation Proposal to the OA within a period of 8 weeks and the next date of hearing by the BIFR was fixed on December 27, 2016. Consequent to the repeal of SICA w.e.f. December 1, 2016, the case filed by the Company under the BIFR stands abated and the Company has an option to file a revised petition within 180 days before the NCLT. Based on the discussions with several lenders/Banks, the Company has decided not to initiate the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, before the NCLT.

The financial results have been prepared on a going concern basis, based on a Comfort letter provided by the promoters for continued support to the Company to meet its financial obligations, in order to enable the Company to continue its operations in the foreseeable future.

Note 7. Exceptional item

(a) Exceptional item for the quarter and year ended March 31, 2017 represents liability no longer required and written back of Rs, 150.47 lakhs relating to non-fulfillment of contractual obligations/damages.

(b) Exceptional item for the year ended March 31, 2016 - The Telangana State Electricity Regulatory Commission (TSERC) passed the final order on September 18, 2015 for upward revision of tariff in favor of the Company in respect of energy exported in the earlier years. On receipt of the TSERC order, the Company recognized the differential revenue of Rs, 227.40 lakhs, which amount was also received.

Note 8. In the earlier years the Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, which shall be compensated by the Company at the end of the scheme.

During the quarter and year ended March 31, 2017, the Company has allotted 69,50,500 Secured Unlisted Non-Convertible Debentures (NCD) of Rs, 10/- each at a coupon rate of 4% to the Banks.

Note 9. The tenure of appointment of the Executive Director (designated as a Managing Director w.e.f August 29, 2016) ended on April 30, 2016. The Remuneration Committee and the Board of Directors of the Company at their respective meetings held on May 20, 2016, approved the appointment and payment of remuneration for a period of three years with effect from May 1, 2016 on the same terms of earlier appointment. The said appointment and payment/provision of remuneration was approved by the shareholders in the Annual General Meeting held on September 26, 2016. The Company has sought the necessary approval from Central Government, whose response is pending.

Note 10. Financial Reporting Process : The Management conducted an assessment of the effectiveness of the internal control over financial reporting using the criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on this assessment, Management defied deficiencies in the internal control over financial reporting, that constitute material weaknesses, in respect of certain reconciliations between various accounting systems and the period - end adjustments.

The Company uses various subsystems, the output from which, is being used for accounting in the financial package maintained by the Company. Consequent to certain deficiencies in IT General and Application controls in the software platforms used for financial reporting, there were differences in balances between sub-systems / sub- ledgers with the general ledger, which have been manually reconciled by the Company. Whilst necessary adjustment entries were passed in the books of account for the year ended 31st March 2017, and these material weakness did not affect on the financial statements, except assessment of estimating the liability on a disputed matter. The management of the view that the Electricity Duty applicable on Captive consumption is a contingent in nature and no provision is required to be made.

Note 11. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2016

1. Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10 each. Each equity shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing annual general meeting except in case of interim dividend. 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 number of equity shares held by the shareholders.

2. Rights, preferences and restrictions attached to preference shares:

3. 9,536,813 - 6% Cumulative redeemable preference shares of Rs. 10 each are due for redemption on or after April 1, 2017.

3. 25,000,000 - 6% Cumulative redeemable preference shares of Rs. 10 each are due for redemption on or before September 30, 2023.

4. Variation in terms of 6,610,210 - 6% Cumulative optionally convertible preference shares of Rs. 10 each which were due for redemption on April 1, 2015 are as under:

5. Waiver of arrears of preference dividend till 1st April 2015.

6. Changing the nomenclature to 6% cumulative redeemable preference shares of Rs. 10 each w.e.f April 1, 2015

7. Period of redemption extended from April 1, 2015 to April 1, 2025 with an early redemption right to the Company before the extended period of 10 years by giving 30 days notice.

These terms were approved by Preference shareholders vide resolution dated March 20, 2015.

8. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

9. Equity shares: Issued 12,829,043 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

10. 6% Cumulative optionally convertible preference shares: Issued 6,610,210 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

11. Arrears of fixed cumulative dividends on preference shares :

12. Dividend on 6% cumulative redeemable preference shares- Rs. 762.18 lakhs (31 March, 2015 Rs. 515.30 lakhs).

13. First charge on all chargeable current assets of the Company (viz.) sugar, molasses, bagasse, stores and spares, ethanol, rectified spirit and receivables on pari-passu basis with other members of the consortium lenders.

14. Second charge on the Company''s present and future fixed assets (both moveable and immovable) of sugar unit and distillery unit situated at Adloor Yellareddy Village, Sadashivnagar Mandal, Nizamabad District and sugar unit located at Maggi village, Nizamabad District of Telangana State on pari-passu basis with the other members of the Consortium.

15. Pledge of shares of Gayatri Sugars Limited belonging to Smt. T. Indira Subbarami Reddy and Sri T.V. Sandeep Kumar Reddy.

16. Personal guarantee of Shri T.V. Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy and Smt. T. Sarita Reddy.

*The Company had made the provision towards preference dividend(6% Cumulative redeemable preference shares) of Rs. 57.22 lakhs and dividend distribution tax thereon of Rs. 8.03 lakhs during the year ended March 31, 2007. In view of the carried forward losses in the books, the Company had not remitted the dividend and tax thereon and was in the process of obtaining consent for not remitting the same. Subsequently, the Company has remitted the amount to the preference shareholder .

17. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Act, 2006" has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro Enterprises and Small Enterprises as at March 31, 2016 is as under:

18. The cane development incentive is paid by the company to encourage farmers to harvest the sugar crop and supply sugarcane to the Company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

Disclosures under Accounting Standards Note 25 Employee benefit plans

19. Defined contribution plans

The Company makes provident fund to 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 recognized Rs. 81.93 lakhs (31 March, 2015: Rs. 74.14 lakhs) for provident fund 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.

20. Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

21. Gratuity (Unfunded)

22. Compensated Absences

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

23 : The Company has recognized deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

24. There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

25. Over the last few years, the Company has been incurring losses and as at March 31, 2016 the accumulated losses amounting to Rs. 13,884.97 lakhs have completely eroded the net worth and, its current liabilities exceeded the current assets as on that date. The Sugar Companies have been facing financial difficulties on account of higher sugar cane prices, lower realization of sugar and high finance cost. The Company has implemented various initiatives for improving its financial position. The State and Central Governments, recognizing the importance of sugar industry, are taking necessary steps to strengthen it. As of March 31, 2016 the promoters have arranged an unsecured loan of Rs. 2,259.85 lakhs. Further during the previous year, the unsecured loan of Rs. 2,500 lakhs has been converted to 6% Cumulative Redeemable Preference Shares at a face value of Rs. 10 each for a tenure of not exceeding 9 years. In addition to the promoters funding, during the year ended March 31, 2016, the Company has obtained soft loans (under the scheme sanctioned by Ministry of Consumer Affairs, Food and Public Distribution, Government of India) aggregating Rs. 2,012 lakhs, corporate loans aggregating Rs. 1,545 lakhs and also renewed its working capital limits with the banks. Owing to the complete erosion of the net-worth of the Company, the Board of Directors , in their meeting held on August 14, 2015 decided to make a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the Board for Industrial and Financial Reconstruction (BIFR) which reference was registered and acknowledged by BIFR vide their letter dated October 19, 2015. On May 13, 2016, the company received a letter dated May 6, 2016, from BIFR, stating that the date for hearing the case in relation to the proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, has been fixed on May 11, 2016. However, as the date fixed for hearing the case had lapsed by the time the Company received the letter from BIFR, the Management is in the process of replying to BIFR with a request for a revised hearing date. In terms of the aforesaid reference, on receiving the intimation from BIFR, the Company will be submitting a Scheme for revival / rehabilitation to BIFR as per the provisions of SICA. The financial statements have been prepared on a going concern basis, based on a Comfort letter provided by the promoters for continued support to the Company to meet its financial obligations, in order to enable the Company to continue its operations in the foreseeable future.

26. Exceptional item

27. During the year ended March 31, 2016, the Telangana State Electricity Regulatory Commission (TSERC) has passed the final order on September 18, 2015 for upward revision of tariff in favour of the Company in respect of energy exported in the earlier years by the Company to Telangana State Northern Power Distribution Company Limited (TSNPDCL) . The Management on receipt of the TSERC order has recognized the differential revenue of Rs. 227.40 lakhs during the year ended March 31, 2016, which amount has been received.

28. The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, which shall be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks raised a demand of Rs. 840 lakhs towards ROR and the Company''s proposal for payment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares had not been agreed by the banks during the previous years. The Company paid and charged to the Statement of Profit and Loss an amount of Rs. 84 lakhs during the year ended March 31, 2014. As the Company was incurring losses for past few years and there was no cash surplus, the Company was pursuing with the banks for waiver of balance amount of Rs. 756 lakhs. During the consortium meeting held on June 9, 2014, the member banks of the consortium had decided not to consider, the waiver request of the Company and requested the Company to make the payment of the balance ROR amount before March 31, 2015. Consequently, the Management agreed to pay balance ROR amount in installments and accordingly an amount Rs.756 lakhs was provided during the previous years.

The Company''s proposal for the payment of ROR by way of Non-Convertible Debentures (NCD''s) at a coupon rate of 4% was approved in the meeting of CDR EG on February 22, 2016. Further, the company was directed to complete the issuance of NCD''s by March 2016. As the Company has received the communication of the same late and also keeping in view the procedure involved in issuance of NCD''s, the Company has requested CDR EG to grant time until July, 2016 to complete the process of issuance and dispatch of NCD''s.

29. Pursuant to the Scheme of Amalgamation, between the Company and GSR Sugars Private Limited, during the year ended March 31, 2010, the Company had recognized Goodwill of Rs. 1,212 lakhs, which was being amortized over a period of ten years. The carrying value of goodwill as at March 31, 2015 was Rs. 606.16 Lakhs. In view of losses and complete erosion of net worth, more fully detailed in Note 31, the Management opined that the goodwill is required to be impaired. Consequently, during the year ended March 31, 2015 the entire carrying value of the goodwill of Rs. 606.16 lakhs was impaired and charged to the Statement of Profit and Loss.

30. Financial Reporting Process

The Management conducted an assessment of the effectiveness of the internal control over financial reporting using the criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on this assessment, Management identified a deficiency in the internal control over financial reporting, that constitutes a material weakness, in respect of certain reconciliations between various accounting systems.

The Company uses various subsystems, the output from which, is being used for accounting in the financial package maintained by the Company. Consequent to certain deficiencies in IT General and Application controls in the software platforms used for financial reporting, there were differences between sub-systems / sub- ledgers with the general ledger, which have been manually reconciled by the Company. Whilst necessary adjustment entries were passed in the books of account for the year ended 31st March 2016, the related material weakness in internal control was remediated after the year-end.

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


Mar 31, 2015

1. Background:

Gayatri Sugars Limited was established in the year 1995. The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for the captive consumption. The Company's Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the company yield by-products like Molasses, Bagasse.

2. Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10 each. Each equity shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend. 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 number of equity shares held by the shareholders

3. Rights, preferences and restrictions attached to preference shares:

a) 9,536,813 - 6% Cumulative redeemable preference shares are due for redemption on or after April 1, 2017.

b) 25,000,000 - 6% Cumulative redeemable preference shares are due for redemption on or before September 30, 2023.

c) Variation in terms of 6,610,210 - 6% Cumulative optionally convertible preference shares which were due for redemption on April 1, 2015 are as under:

i) Waiver of arrears of preference dividend till 1st April 2015.

ii) Changing the nomenclature to 6% cumulative redeemable preference shares w.e.f April 1, 2015

iii) Period of redemption extended from April 1,2015 to April 1,2025 with an early redemption right to the Company before the extended period of 10 years by giving 30 days notice.

These terms were approved by Preference shareholders vide resolution dated March 20, 2015.

5. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

a) Equity shares: Issued 12,829,043 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

b) 6% Cumulative optionally convertible preference shares: Issued 6,610,210 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

6. Arrears of fixed cumulative dividends on preference shares :

a) Dividend on 6% cumulative redeemable preference shares- Rs. 51,530,127 (31 March, 2014 Rs. 40,054,615).

b) Dividend on 6% cumulative optionally convertible preference shares - Rs. NIL (31 March, 2014 Rs. 15,864,504).

Particulars As at As at 31 March, 2015 31 March, 2014 Rs Rs 7. Contingent liabilities and commitments

(i) Contingent liabilities

(a) Claims against the company not 2,494,497 2,494,497 acknowledged as debt

(b) Central excise demand 13,881,669 13,881,669

(c) VAT demand 2,214,159 2,214,159

(d) Dividend on 6% cumulative 51,530,127 40,054,615 redeemable preference shares

(e) Dividend on 6% cumulative optionally convertible preference shares. - 15,864,504

(ii) Commitments

Estimated amount of contracts remaining to be executed oncapital account (Net of capital advances Rs. Nil) Tangible assets - -

Other commitments 1,820,000,000 1,820,000,000

8. The cane development incentive is paid by the company to encourage farmers to harvest the sugar crop and supply the canes to the company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

9. As required under Section 203 of the Act, read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company shall have a whole-time Company Secretary. The Company is in the process of appointing a whole-time Company Secretary.

Disclosures under Accounting Standards Note 24 Employee benefit plans

10. a Defined contribution plans

The Company makes provident fund to 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. 7,414,053 (31 March, 2014: Rs. 6,249,677) for provident fund 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.

11.b Defined benefit plans

The Company offers the following employee benefit schemes to its employees: i. Gratuity (Unfunded)

12. Related party disclosures

13. Related party disclosures

(i) Names of the related parties and their relationship:

Description of relationship Names of related parties

Promoter / Shareholder Dr. T Subbarami Reddy

Key Management Personnel Smt. T. Indira Subbarami Reddy - Director Sri. T.V. Sandeep Kumar Reddy -Vice ChairmanSmt. T. Sarita Reddy- Executive Director Mr. V.R. Prasad - Chief Finance Officer Company Under Common Management Gayatri Fin Holdings Limited TSR Holdings Private Limited Deep Corporation Private Limited Gayatri Tissue and Papers Limited

Major Shareholder Mohan Project Contractors Private Limited

Trust under Common Management TSR Foundation

Note: Related parties have been identified by the Management.

14. There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

15. As at March 31, 2015 the accumulated losses amounted to Rs. 1,253,287,646 which has completely eroded the net worth of the Company . The Company has made a reference to the Board for Industrial and Financial Reconstruction (BIFR) on August 5, 2013, under Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985. Further, the Company is dependent on continuous support from its promoters. As of March 31, 2015 the promoters have arranged an unsecured loan of Rs. 264,208,771. Further during the year, the unsecured loan of Rs. 250,000,000 has been converted to 6% Cumulative Redeemable Preference Shares at a face value of Rs. 10 each for a tenure of not exceeding 9 years. The financial statements have been prepared on a going concern basis based on a Comfort letter received from its promoters for continued support to the Company with all necessary assistances including financial and operational to continue with the operations of the Company. Promoters are hopeful that Company would be able to generate sufficient profits in the foreseeable future to make it economically viable.

16. Exceptional item (a) The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring ('CDR') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense ('ROR') i.e. interest rate concession given earlier to the Company, which shall be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks raised a demand of Rs. 84,000,000 towards ROR and the Company's proposal for payment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares had not been agreed by the banks during the previous years. The Company paid Rs. 84,00,000 till March 31,2014. As the Company was incurring losses for past few years and there was no cash surplus, the Company was pursuing with the banks for waiver of balance amount of Rs. 75,600,000. In consortium meeting held on June 9, 2014, the member banks of the consortium decided that the ROR payment should be made at the earliest by March 2015. Consequently, the management of the Company has agreed to pay ROR amount in installments has accordingly made provision towards the same.(b) As at March 31, 2015 an amount of Rs. 60,615,758 was carried as goodwill, which arose on account of company's amalgamation with GSR Sugars Private Limited in the year 2010. In view of continuous losses and substantial erosion of net worth ,more fully detailed in note 30, the management is of the opinion that the goodwill is required to be impaired. Consequently, an amount of Rs. 60,615,758, has been provided towards provision for impairment of goodwill and the same has been disclosed as 'exceptional item' in the financial statements.

17. The Company has recognized revenue at revised tariff on the Export of Power to TPNPDCL based on the order passed by Appellate Tribunal for Electricity, remanding the matter to the State Commission. The Appellate Tribunal vide its order dated November 20, 2014, remanded the matter for state commission for considering the revision of tariff. Since the Tribunal's direction to consider the revision of tariff would be favorable to the company and as the TPNPDCL has not preferred an appeal against the order of the Appellate Tribunal within time, the management has recognised the revenue at revised tariff.

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


Mar 31, 2014

1. Background:

Gayatri Sugars Limited was established in the year 1995. The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for the captive consumption. The Company''s Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the company yield by-products like Molasses, Bagasse.

2.1 Contingent liabilities and commitments

Particulars As at As at 31 March, 2014 31 March, 2013

(i) Contingent liabilities

(a) Claims against the company not acknowledged as debt 2,494,497 2,494,497

(b) Dividend on 6% cumulative redeemable preference shares 40,054,615 39,902,121

(c) Dividend on 6% cumulative optionally 15,864,504 13,828,890 convertible preference shares

(d) Central excise demand 13,881,669 5,853,521

(e) VAT demand 2,214,159 -

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account (Net of capital advances Rs. Nil)

Tangible assets - 898,880

Other commitments 1,820,000,000 1,690,000,000

2.2 The cane development incentive is paid by the company to encourage farmers to harvest the sugar crop and supply the canes to the company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

Note 3 Disclosures under Accounting Standards

3. Employee benefit plans

3a Defined contribution plans

The Company makes provident fund to 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. 6,249,677 (year ended 31 March, 2013 Rs. 5,487,456) for provident fund 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.

Note : The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the correspond- ing deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

Note 30 There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

Note 31 As at March 31, 2014, the accumulated losses amounted to Rs. 606,201,701 which is more than 50% of the peak net worth of the Company during the four financial years immediately preceding the current financial year. The Company has made reference to the Board for Industrial and Financial Reconstruction (BIFR) on August 5, 2013, under Section 23 of Sick Industrial Companies (Special Provision) Act, 1985. The Company is dependent on continuous support from its promoters. As of March 31, 2014 the promoters have arranged an unsecured loan of Rs. 517,974,771. The financial statements have been prepared on a going concern basis based on a Comfort letter received from its promoters for continued support to the Company with all necessary assistances including financial and operational to continue with the operations of the Company. Promoters are hopeful that Company would be able to generate sufficient profits in the foreseeable future to make it economically viable.

Note 32 The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, will have to be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks have raised a demand of Rs.84,000,000 towards ROR and the Company''s proposal for pay- ment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares has not been agreed by the banks during the previous year. The Company has paid Rs. 8,400,000 till March 31, 2014. As the Company was incurring losses for past few years and there was no cash surplus, the Company was pursuing with the banks for waiver of balance amount of Rs. 75,600,000. Subsequently, the bankers have agreed for extension of time for payment of the balance ROR claim upto March 2015 or earning of profit whichever is earlier, to their authorities at the earliest. As the net worth of the Company is substantially eroded and Company has also made a reference to BIFR, it is hopeful of getting wavier / relief package and hence no provision has been made.

Note 33 During the year ended March 31, 2014, executive director was reappointed by the Board of Directors of the Company, for a period of three years with effect from May 1, 2013, on the same terms of earlier appointment. The said reappointment was approved by the members in the Annual General Meeting held on September 30, 2013 and is pending approval from the Central Government. The Company is in the process of making requisite application to the Central Government in this respect.

Note 34 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1.Background:

Gayatri Sugars Limited was established in the year 1995. The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for the captive consumption. The Company''s Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the company yield by-products like Molasses, Bagasse.

2.1 Employee benefit plans

2.1 a Defined contribution plans

The Company makes Provident Fund to 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. 5,503,405 (Year ended 31 March, 2012 Rs. 5,328,680) for Provident Fund 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.

Note : The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

Note 3 There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

Note 4 Loans and Advances include Rs. NIL (Year ended 31 March, 2012 Rs. 6,739,990) receivable from Banks paid towards interest on loans under "Scheme for Extending Financial Assistance to Sugar Undertakings" ("SEFASU"). Under the scheme, the concessional interest is reimbursed by the Central Government directly to the banks. Upon reimbursement from the Central Government the interest recovered by the banks will be reimbursed to the Company. Considered good for recovery by the management.

Note 5 As at March 31, 2013 the accumulated losses amounted to Rs. 377,471,778 which is more than 50% of the peak net worth of the Company during the four financial years immediately preceding the current financial year . The Company is dependent on continuous support from its promoters. During the year ended March 31, 2013 the promoters have arranged unsecured loan of Rs. 412,435,273 . The financial statements have been prepared on a going concern basis based on a Comfort letter received from its promoters for a continued support to the Company with all necessary assistances including financial and operations to continue with the operations of the Company. Promoters are hopeful that Company would be able to generate sufficient profits in the foreseeable future to make it economically viable.

Note 6 The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, will have to be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks have raised a demand of Rs. 840,00,000 towards ROR and the Company''s proposal for payment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares has not been agreed by the banks during the year. The Company has paid Rs. 84,00,000 till March 31, 2013. As the Company is incurring losses for past few years and there is no cash surplus, the Company is pursuing with the banks for waiver of balance amount of ROR claim aggregating Rs. 75,600,000. The Management is confident of getting waiver for the payment of the said demand and accordingly, no provision has been made in the books for the balance ROR claim.

Note 7 Previous year''s figures

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


Mar 31, 2012

A. COMPANY OVERVIEW

Gayatri Sugars Limited was established in the year 1995 ('the Company'). The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for sale and for the captive consumption. The Company's Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the Company also yield by-products like Molasses and Bagasse.

Notes:

(i) Pursuant to the Scheme of Arrangement ("the Scheme") between Gayatri Sugars Limited ("GSL"/ the "transferee company"/ "the Company") and GSR Sugars Private Limited ("GSRSPL"/ the "transferor company"), as approved by the respective company's shareholders and subsequently approved by the Hon'ble High Court of Andhra Pradesh on 18 February, 2011, the entire business and undertaking of GSRSPL including all assets, liabilities, duties and obligations, have been transferred to and vested in the Company with effect froml April, 2010. The approved Scheme was filed with the Registrar of Companies, Andhra Pradesh, on 23 March, 2011.The Board of Directors at their meeting held on 8 April, 2011 have taken on record the aforesaid order of the Hon'ble High Court of Andhra Pradeshwith regard to the Schemeand at their meeting held on 29 April, 2011, have allotted the shares to the eligible shareholders, as per the Scheme.The shareholders of GSRSPL, were issued 16 equity shares of the Company for every 10 equity shares held in GSRSPL, aggregating to 12,829,043 equity shares.

(ii) The share capital of the GSL after issue of equity shares to the shareholders of GSRSPL is to be reduced and restructured to the extent of accumulated losses amounting to Rs. 259,185,400 out of total accumulated loss as at 31 March, 2010 of Rs. 453,924,980 and the balance of Rs. 194,739,580 against potential allotment of equity shares to shareholders of GSRSPL, pursuant to the Scheme.

(iii) The unsecured loans of promoters of GSL as at 31 March, 2010 of Rs. 228,252,100 is to be converted into 13,800,000 equity shares ofRs. 10 each at a premium of Rs. 1.75 per share aggregating to Rs. 24,150,000 and 6,610,210 cumulative optionally convertible preference shares of Rs. 10 each at a coupon rate of 6% p.a.

(iv) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Notes:

v) Arrears of fixed cumulative dividends on preference shares :

a) Dividend on 6% Cumulative Redeemable Preference Shares- Rs.28,610,439 (31 March, 2011 Rs.22,888,351 ).

b) Dividend on 6% Cumulative Optionally Convertible Preference Shares - Rs. 7,932,252 (31 March, 2011 Rs. 3,966,126 ).

vii) Terms of redemption of preference shares

a) 9,536,813- 6% Cumulative Redeemable Preference Shares are due for redemption on or after April 1, 2017.

b) 6,610,210- 6% Cumulative Optionally Convertible Preference Shares are due for redemption at the end of 5 years from the appointed date (i.e. April 1, 2010) or convertible into equity shares of Rs.10 each at a premium of Rs. 1.75 per share, at the option of the preference shareholders.

viii) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

i) First charge on all chargeable Current Assets of the company (viz.) Sugar, Molasses, Bagasse, Stores and Spares, Extra Neutral Alcohol, Rectified Spirit and Receivables on pari-passu basis with other members of the consortium.

ii) Second charge on the company's present and future immovable properties and fixed assets of sugar unit at Kamareddy Unit on pari-passu basis with the other members of the Consortium and term lender (IOB).

iii) Second charge on the company's buildings, plant & machinery of distillery unit at Kamareddy Unit on pari-passu basis with the other members of the consortium.

iv) Pledge of shares of GSL belonging to Smt. T. Indira Subbarami Reddy and Sri TV Sandeep Kumar Reddy.Corporate Guarantee of Gayatri Projects Limited.

v) Personal guarantee of Shri TV Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy Reddy and Smt. T. Sarita Reddy.

vi) Personal guarantee of Shri TV Sandeep Kumar Reddy, Smt. T Indira Reddy and Smt. T. Sarita Reddy.

* The Company had made the provision towards preference dividend of Rs. 5,722,088 and dividend distribution tax thereon ofRs. 802,523 during the year ended March 31, 2007. In view of the carried forward losses in the books, the Company had not remitted the dividend and tax thereon and is in the process of obtaining consent for not remitting the same

* Cash and cash equivalents as above meet the definition of Cash and Cash Equivalents as per Accounting Standard- 3 "Cashflow Statement"

**Other Bank balances include deposits amounting to Rs. 17,151,842(As at 31 March, 2011 Rs. 16,038,418) which have an original maturity of more than 12 months and pledged with Banks as security.

1.1 Contingent liabilities and commitments

Particulars As at As at

31 March, 2012 31 March, 2011 Rs. Rs.

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt 2,494,497 2,494,497

(b) Dividend on 6% Cumulative Redeemable Preference Shares 33,251,767 26,601,414

(c) Dividend on 6% Cumulative Optionally Convertible 9,219,062 4,609,531 Preference Shares.

(d) Crop loans given to farmers by the banks have been 12,363,318 156,246,160 guaranteed by the Company

(e ) Corporate guarantees given to a Supplier 15,000,000 _ for supply of PVC pipes to farmers

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account Tangible assets 475,000 475,000

Note

2.1 Employee benefit plans

2.1a Defined contribution plans

The Company makes Provident Fund to 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. 5,328,680 (Year ended 31 March, 2011 Rs. 4,953,239) for Provident Fund 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.

2.1b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Compensated Absences

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

Note : The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

Note 3 Loans and Advances include Rs.6,739,990 (Year ended 31 March, 2011 Rs.10,490,081) receivable from Banks paid towards interest on loans under "Scheme for Extending Financial Assistance to Sugar Undertakings" ("SEFASU"). Under the scheme, the concessional interest is reimbursed by the Central Government directly to the banks. Upon reimbursement from the Central Government the interest recovered by the banks will be reimbursed to the Company.Considered good for recovery by the management.

Note 4 Changes in inventories of finished goods and work in progress for the year ended includes Rs. 42,705,608 of Interest paid on working capital which had been considered for the purpose of valuation of Inventories as of 31 March, 2011. In the current yearinventories are being valued excluding interest cost.

Note 5 Previous year's figures

The Revised Schedule VI has become effective from 1 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 / disclosure.


Mar 31, 2010

1. Contingent liabilities not provided for:

a. Dividend on 6% Cumulative Redeemable Preference Shares - Rs. 17,166,264/- (31.03.2009: Rs.11,444,176/-).

b. Claims against the company not acknowledged as debt Rs.22,99,377/- (31.03.2009: Rs.38,17,077/-).

2. 14% Secured Non-Convertible Debentures (NCDs) issued by the Company for an amount of Rs.350,000,000/- to Rajasthan Leasing Private Limited (RLPL) during the year 2007-08 has been redeemed on 31 March, 2010. The Company has also paid the dues towards interest and other finance charges as per the terms of agreement. RLPL has confirmed that there are no dues from the Company and issued a No Due Certificate on 31 March, 2010.

3. 6% Cumulative Redeemable Preference Shares are due for redemption on or after 1 April, 2017.

4. Secured Loans:-

a. Term Loan from Indian Overseas Bank (IOB) is secured by an exclusive first charge on the buildings and plant & machinery of the distillery unit both present and future and second charge on the fixed assets of the sugar unit on pari-passu basis with working capital banks.

b. Term Loan - Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU) are secured by a pari - passu residual charge on all the Companys immovable properties, both present and future and a first charge by way of hypothecation of movable properties (excluding the inventories and book debts) both present and future.

c. Term Loan from YES BANK Limited is secured by an exclusive first charge on all the fixed assets of the company, both present and future, including the land on which distillery assets have been setup, excluding the building and plant & equipment solely relating to the distillery unit charged to IOB and second pari - passu charge on Fixed Assets of distillery unit along with working capital banks. Further, the term loan is secured by way of pledge and non-disposal undertaking of 30% of the equity shares of the promoters in the Company. Also Pledge of Fixed Deposit of Rs.15,000,000/- with the bank.

d. Cash Credits from banks are secured by way of pari - passu first charge on all current assets of the company i.e. Raw Materials, Stock in Process, Finished Goods, Stores and Spares, Book Debts etc. and also secured by way of pari-passu second charge on the.Companys immovable and movable properties.

e. Term Loan and Cash Credits loans are guaranteed by the promoter directors of the Company.

f. Crop loans given to farmers by Union Bank of India, Nizamabad have been guaranteed by the Company. Amount outstanding Rs.45,392,378/- (31.3.2009: Rs.11,495,288/-)

5. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.Nil (31.3.2009: Rs.6,677,000), net of advances is Rs.Nil (31.3.2009: Rs.3,955,000).

6. Additional Information as required pursuant to Para 3 and 4 (C&D) of the Part II of the Schedule VI of the Companies Act, 1956.

7 Disclosures as required under Accounting Standard AS-15

i Gratuity

This is a defined benefit plan as detailed and the liability for which is determined on the basis of actuarial valuation and is an unfunded plan as of 31 March, 2010.

ii Compensated Absences

Leave which accrue to the employees and which can be carried to future periods but are expected to be en-cashed or availed in twelve months immediately following the year end are reported as expenses during the year in which the employee perform the services that the benefit covers and the liabilities are reported at the un-discount amount of the benefits after deducting amounts already paid. Where there is restriction on availment of encashment of such accrued benefit or encashment is otherwise not expected to wholly occur in the next twelve months, the liability on account of the benefit is actuarially determined using the project unit credit method.

iii Accounting Policy for recognizing actuarial gains and losses Immediate recognition in the Statement of Profit and Loss

iv Scheme Description

The Scheme provides for a lump sum benefit, subject to a vesting period of 5 years in case of early separation, based on final salary and years of service.

v Actuarial valuation method: - Projected Unit Credit

8. The Deferred Tax Asset on account of carried forward business losses have not been recognized as there is no virtual certainty of realization of such assets in future.

9. Figures for the previous year have been regrouped/ rearranged / reclassified wherever necessary to confirm to the current year presentation.

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