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Notes to Accounts of Zuari Industries Ltd.

Mar 31, 2023

(ii) Leasing arrangements

The Company''s investment property include land and building owned by the Company which have been let out to other group companies and outside party for business purpose and also to an educational institution or lying vacant (and not classifed to inventories). AH lease arrangements are cancellable operating lease agreements.

Fair value hierarchy and valuation technique

The Company obtains independent valuations for its investment properties annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers information from a variety of sources.

These valuations are based on valuations performed by S V Kushte, a registered valuer. He is a specialist in valuing these types of investment properties

The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

7.1 Investments pledged as security

84,11,601 shares (31 March 2022: 32,52,033 shares) of Zuari Agro Chemicals Ltd. and 5,90,14,624 shares (31 March 2022: 5,57,03,749 shares) of Chambal Fertilisers and Chemicals Limited amounting to H 1,66,052.49 lakhs (31 March 2022: H 2,39,481.62 lakhs) have been pledged as security by the Company. Refer note 17 and 40 for details.

9.1. This balance includes amount pledged with banks and sales tax authorities of INR 550.68 lakhs (31 March 2022: INR 525.58 lakhs). Includes amount pledged with the Bank Security against BG and NOC for Sugar Development Fund Loan of INR 280.18 lakhs (31 March 2022: INR 282.69 lakhs). Also refer Note 17.3 and 17.4.

9.2. INR 500 per REC unit sold has been deducted and held by respective power exchanges for onward submission to CERC on behalf of the Company being a RE generator with reference to Hon''ble Supreme Court order dated 14 July 2017. Total amount held is INR 102.25 lacs (31 March 2022:102.25 lakhs).

11.1 Note

Land measuring 2,78,611 sq mt (PY 2,78,611 sq mt) of INR 3,621.94 lakhs (31st March 2022: INR 3621.94 lakhs) is pending to be registered in the Company''s name. The title deeds for the same is in the name of Zuari Agro Chemicals Limited, an associate. Further, refer note 17 for information on Inventories pledged as security by the Company.

15.1 Under instructions from Special Court (trial of offences relating to transactions in securities) Act, 1992 and in respect of shareholders who could not exercise their rights in view of deposits, mistakes, discrepancy in holdings etc., 8,051 (31 March 2022: 8,051) right''s equity shares entitlement have been kept in abeyance pursuant to Section 126 of the Companies Act, 2013.

II. Terms/Rights attached to equity shares

i) The Company has only one class of equity shares having a par value of INR 10 per share. Each share holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by board of directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Nature and purpose Retained Earnings

Retained earnings are created from the profit / loss of the Company, as adjusted for distributions to owners, transfers to other reserves, etc.

General Reserve

The Company has transferred a portion of the net profit kept separately for future propose.

FVTOCI Reserve

The Company has elected to recognise changes in the fair value of certain investments in equity shares in other comprehensive income. These are accumulated in Fair value through OCI reserve in OCI within the equity. The Company transfers this reserves to retained earnings when relevant equity investments are derecognised.

Capital Redemption Reserve

Where the preference shares are redeemed out of the profits available for distribution, a sum equivalent to the nominal amount of shares being redeemed shall be transferred to the Capital Redemption Reserve.

Molasses and Alcohol Storage and Maintenance Reserve

The above mentioned reserve is created under Molasses Control Order 1961 which requires every sugar factory to set aside a amount as mentioned in the order. The amount credited in said account shall be utlised only for purposes of construction or erection of storage facilities for molasses.

Securities Premium

Securities premium reserve is created when the Company issue shares at the premium. The same will be utilised in accordance with the provisions of the Companies Act, 2013 and related provisions.

Deemed Equity

This represents equity component on discounting of preference shares issued by the Company.

17.1 Rupee term loan from banks - Non Current

a. Facility of 269.86 lakhs (31 March 2022: INR 1,275.44 lakhs) consisting a term loan, bearing interest @ 9.40%-10.50% p.a. taken from State Bank of India.

The term loan is repayable in 16 equal quarterly instalments commencing from 1 April 2019 and ending on 11 April 2023. Further,there was 1 more term loan of INR 301.00 Lakhs, which has been fully repaid during the year.

b. Facility of INR 1706.46 lakhs (31 March 2022: INR 2845.26 lakhs) bearing interest @ - 9.40%p.a- 10.50% p.a. consist of

cane soft loan taken from State Bank of India. The loan is repayable in 18 quarterly installments commencing from 31

December 2019 and ending on 30 September 2024.

The above loans are secured by way of: First mortgage / charge on entire fixed assets of company, situated at 62.318 acres of land at Aira Estate, Khamaria Pandit, Distt Lakhimpur Kheri, Uttar Pradesh and a new piece of land of 27.045 acres at Village Allipur, Paragana Dhauraha, District Kheri, Uttar Pradesh. Extension of hypothecation charge (2nd charge) on entire current assets of the company on pari passu basis with other term lenders. Receivables from the power project jointly financed by IREDA and SBI shall be first shared on pari passu charge basis between SBI and IREDA for the term loan and on second pari passu charge basis for working capital facilities and soft loan of SBI.

c. Facility of INR 2846.22 lakhs (31 March 2022: INR 4964.94 lakhs) from Zila Sahakari Bank. This loan is secured by way of Residual charge on free assets of the Company and carry a interest rate of 5%. The loan is repayable in 60 equal monthly installments starting from 31 July 2019. The loan is at concessional rate of interest and has been carried at amortised cost using discount rate of 11.80%-12.30% p.a.

17.2 Rupee term loan from financial institution - Non Current

a. Facility of H 4,300.59 lakhs (31 March 2022: H 2,500.00 lakhs) from Bajaj Finance Limited, bearing interest rate 9.40% p.a. having outstanding balance of H 4,300.59 (31 March 2022: H 2,483.77 lakhs). The loan is repayable in 24 months from the date of disbursement. The loan is secured by pledge of 33,82,714 share of Chambal Fertilizers and Chemicals Limited (owned by the Company).

b. Facility of H 9,375.00 lakhs (31 March 2022: H 12,500.00 lakhs) from Tata Capital Financial Services ltd., bearing interest rate 12.65 % p.a. having outstanding balance of H 9,292.77 lakhs (31 March 2022: 12310.72). The loan is repayable in 4 equal installments within 42 months from the date of first disbursement. The loan is secured by pledge of 38,17,500 shares of Chambal Fertilizers and Chemicals Limited (owned by the Company) and 3,41,000 shares of Gillette India Limited (Owned by Globalware Trading and Holdings Limited).

c. Facility of H 5,000.00 lakhs (31 March 2022: INR 5,000 lakhs) from STCI Finance Limited, bearing interest rate 11.75% p.a. having outstanding balance of H 4,980.70 lakhs (31 March 2022: INR 4,971.64 lakhs). The loan is repayable in 36 months from the date of disbursement. The loan is secured by pledge of 37,72,700 shares of Chambal Fertilizers and Chemicals Limited (owned by the Company).

Rupee term loan from financial institution - Current

Facility of H 3,900.00 lakhs (31 March 2022: INR 4000 Lakhs) from Anand Rathi Global Finance Limited, bearing interest rate 12.00% p.a. having outstanding balance of H 3,888.49 lakhs (31 March 2022: INR 3,988.43 lakhs). The loan is repayable in 365 days from the date of disbursement. The loan is secured by pledge of 2,200,000 shares of Chambal Fertilizers and Chemicals Limited (owned by a subsidiary Simon India Limited) and 2,852,033 shares of Zuari Agro Chemicals Limited (owned by the company).

17.3 Rupee term loan from others - Non-Current

a. Facility of INR 2,349.00 lakhs (31 March 2022: INR 3,136.68 lakhs) bearing interest @ 9.80% p.a. consist of loan taken from Indian Renewal Energy Development Agency Limited (IREDA). The said loan is repayable in 40 quarterly installments starting from expiry of 1 year from the date of commissioning of co-generation project.

The loan is secured by way of:

1. First mortgage / charge, pari passu, on entire fixed assets of company, situated at 62.318 acres of land at Aira Estate, Khamaria Pandit, Distt Lakhimpur Kheri, Uttar Pradesh and a new peice of land of 27.045 acres at Village AUipur, Paragana Dhauraha, District Kheri, Uttar Pradesh with existing term loan lender State Bank of India and Sugar Development Fund.

2. Second pari-passu charge on current assets of company (excluding receivables from the power project on which there is a first pari-passu charge) along with other lenders.

b. Facility of INR 5,118.48 lakhs (31 March 2022: INR 6,451.81 lakhs) bearing interest of 11.80% p.a. consist of loan taken from Indian Renewal Energy Development Agency Limited (IREDA). The said loan is repayable in 24 equal quarterly installments from 12 months from commencement of operations.

The loan is secured by way of First equitable mortgage charge on entire fixed assets of the Company, situated at 62.318 acres of land at Aira Estate, Khamaria Pandit, Distt Lakhimpur Kheri, Uttar Pradesh and a new piece of land of 27.045 acres at Village AUipur, Paragana Dhauraha, District Kheri, Uttar Pradesh together with building, movable and immovable machinery and fixed assets (present and future) of Company, pari pasu with other term lenders including SDF and Exclusive charge on Escrow/TRA account opened for Distillery receivables.

c. Facility of INR 327.68 lakhs (31 March 2022: 514.94 lakhs) bearing interest of 9.70% p.a. consist of loan taken from Indian Renewal Energy Development Agency Limited (IREDA). The said loan is repayable in 16 equal quarterly installments from 30 June 2021 and ending on 31 December 2024.

The loan is secured by way of First pari passu charge on entire movable including the receivables of power and immovable properties of the Company including and pertaining to 62.318 acres of land at Aira Estate, Khamaria Pandit, Distt Lakhimpur Kheri, Uttar Pradesh and a new piece of land of 27.045 acres at Village AUipur, Paragana Dhauraha, District Kheri, Uttar Pradesh with existing term loan lender State Bank of India and Sugar Development Fund and Second pari passu charge on entire current assets of the Company excluding receivables on which IREDA and SBI have first pari passu charge.

d. Facility of INR 954.50 lakhs (31st March 2022: 1,231.17 Lakhs) bearing interest of 11.10% p.a. consist of loan taken from Indian Renewal Energy Development Agency Limited (IREDA). The said loan is repayable in 24 equal quarterly installments from 30 December 2020 and ending on 30 September 2026 .

The loan is secured by way of First equitable mortgage charge on entire fixed assets of the Company, situated at 62.318 acres of land at Aira Estate, Khamaria Pandit, Distt Lakhimpur Kheri, Uttar Pradesh and a new piece of land of 27.045 acres at Village AUipur, Paragana Dhauraha, District Kheri, Uttar Pradesh together with building, movable and immovable machinery and fixed assets (present and future) of the Company, pari pasu with other term lenders including SDF and Exclusive charge on Escrow/TRA account opened for Distillery receivables.

e. Facility under Sugar Development Fund of INR 3,032.19 lakhs (31 March 2022: INR 4,012.26 lakhs) consisting of term loan 1 of INR 1,428.12 lakhs (31 March 2022: INR 2,066.06 lakhs) and term loan 2 of INR 1,604.07 lakhs (31 March 2022: INR 1,946.20 lakhs) carrying a fixed rate of interest 4.75% p.a. and 4.50% p.a. respectively for a time period of 10 years.

The said term loan 1 is repayable in 10 Half yearly installments starting from 28 April 2020

The said term loan 2 is repayable in 10 Half Yearly installments starting from 31 January 2022.

The loan is secured by first charge on, pari passu basis, all moveable assets of company except book debts and a new

piece of land of 27.045 acres at Village AUipur, Paragana Dhauraha, District Kheri, Uttar Pradesh with existing term loan

lenders SBI and IREDA.

The loan is at concessional rate of interest and has been carried at amortised cost using discount rate of 11.80%-12.30%.

f. Facility of INR 9,248.63 lakhs (31 March 2022: INR 9,564.69 lakhs) from Netherlandse Financierings Maatschappij Voor Ontwikkelingsladen N.V. (F.M.O) bearing interest @ 8.30% p.a (PY @ 4.21% p.a ) and is repayable in installments starting from 10 July 2020 onwards (payable half yearly), being first 5 installments of USD 3.50 lakhs each , next 5 installments of USD 10.00 lakhs each, next 3 for USD 15.00 lakhs each and last being USD 27.50 lakhs.

The said term loan is secured by way of Exclusive charge on Immovable property of Company having survey no. 119/1 measures 51425 sq. mtrs ,survey no. 120/1 admersures 8075 sq. mtrs,survey No 121 admersures 32239 sq. mtrs,survey No 129/1 admersures 24625 sq. mtrs,survey No 130/1 admersures 86175 sq. mtrs and survey No 131/1 admersures 19050 sq. mtrs situated at Sancoale within the limits of Village panchayant of Sancoale Goa, Mormugao Taluka, Sub Districit of Registration District of State of Goa.

17.4 Non-convertible debentures - Non Current

a) Secured, unrated and unlisted Non-Convertible Debentures (''NCDs'') aggregating to INR 12,750.00 lakhs (31 March 2022: INR 12,750.00 lakhs) comprising of 1,275 debentures of INR 10 lakhs each (31 March 2022: 1,275 debentures of INR 10 lakhs each), bearing interest rate of 6.00% p.a. (effective 7.06% after applicable taxes). These NCDs are redeemable on private placement basis at a premium of 11.00% compunded quarterly. The carrying value of the NCDs after adjustment of processing fees is H 17,255.17 lakhs (31 March 2022: INR 15,189.37 lakhs). The balance 1275 debentures are redeemable on 15th Oct 2024.

The above NCDs are secured by way of:

1. Pledge of 82,15,600 shares of Chambal Fertilizers and Chemicals Limited (held by the Company).

2. First ranking exclusive charge (by way of mortgage by deposit of title deeds) over the property situated at surveys nos. 110/1, 111/1(part) and 112/1 at Sancoale Village, Mormugao Taluka, South Goa District, Goa ("Mortgaged Property”) with total cost of H 10,038.54 lakhs.

3 (a) First ranking exclusive fixed charge by way of hypothecation over the Designated Bank Accounts together with

all amounts standing to the credit of the Designated Bank Accounts INR 548.44 lakhs (31 March 2022: INR 523.36 lakhs).

(b) Secured, unrated and unlisted Non-Convertible Debentures (''NCDs'') aggregating to INR 15,000.00 lakhs comprising of 1,500 debentures of INR 10 lakhs each bearing interest rate of 11.00% p.a. The carrying value of the NCDs after adjustment of processing fees is INR 14,792.05 lakhs (31 March 2022: INR 14,873.95 lakhs). The 1500 debentures are redeemable on 29th June 2024.

The NCDs are secured by way of Pledge of 5,966,445 shares of Chambal Fertilizers and Chemicals Limited (Owned by the Company) and 3,56,960 shares of Gillette India Limited (Owned by Adventz Finance Private Limited).

17.5 Cash credit from Banks - Current

a. Cash credit of INR 6,865.53 lakhs (31 March 2022: INR 6,136.44 lakhs) bearing interest @9.40%-10.15% p.a. taken from State Bank of India and repayable on demand.

The cash credit is secured by way of:

(i) Hypothecation charge on entire current assets including book debts of the sugar, power and ethanol division of the Company, both present and future on pari passu basis with other working capital lenders.

(ii) Extension of 2nd charge on the entire fixed assets of sugar, power and ethanol division of the company.

*Receivables from the power project jointly financed by IREDA, SDF and SBI shall be first shared on pari passu charge basis between SBI, SDF and IREDA for the term loan and on second pari passu charge basis for working capital facilities and soft loan of SBI.

b. Several cash credit facilities aggregating to INR 10,199.36 lakhs (31 March 2022: INR 11,228.51 lakhs) bearing interest @8.50% - 9.55% p.a. taken from Zila Sahakari Bank Limited and repayable on demand.

The cash credit facilities are secured by way of:

(i) First charge on finished goods, work in progress and raw material.

(ii) Second pari pasu charge on land ,building and plant and machinery.

c. Working capital demand loan of INR 1,000 Lakhs bearing interest rate 9.35% - 10.10% p.a. taken from ICICI Bank Limited.

17.6 Intercorporate deposits from related party - Non Current

a. Facility of INR 20,676.44 lakhs (31 March 2022: INR 21,118.80 lakhs) from Zuari Investments Limited (''ZIL''), a related party with interest rate of 12.50% p.a.

b. Unsecured loans aggregating to INR 500 lakhs (31 March 2022: INR 500 lakhs) from Adventz Security Enterprises Limited, bearing interest rate of 12.50% p.a.

Intercorporate deposits from related party - Current

Unsecured loans aggregating to INR 1,305.14 lakhs (31 March 2022: INR 1,235 lakhs) from various parties. Refer Note 46 for details on related party transactions.

17.7 Financial liability part of Non-convertible redeemable preference share issued - Non Current

Pursuant to scheme of amalgamation of Gobind sugar mills Limited with Zuari Industries Limited (Formerly Zuari Global Limited) becoming effective from the appointed date i.e. 1 Apr 2020, certain preference shares have been issued as per details provided (refer Note- 47):

1. 59,22,080 7% Non convertible redeemable cumulative pref. shares of H 10 each.

2. 58,52,034 10.50% Non convertible redeemable cumulative pref. shares of H 10 each issued during the year.

NCRPS have been initially recorded at fair value by discounting the cash flow at maturity of instruments. The difference between the transaction price and fair value of the instruments issued are treated as "deemed equity” at the time of initial recognition.

The Company has investments in equity/ preference share capital, equity portion of corporate guarantee and loans including interest accured amounting to INR 9,297.40 lakhs (31 March 2022: INR 8,858.31 lakhs) in Indian Furniture Products Limited (IFPL), a subsidiary company which is in the business of distribution and retailing of Furniture and related items. The Company has assessed the current financials as well as future projections of IFPL and basis the review, an impairment loss on investments amounting to INR 591.64 lakhs (31 March 2022: INR 535.84 lakhs) has been recognized in the standalone financial statements, for the year ended 31 March 2023. The same has been disclosed as exceptional item above.

The Board of Directors in its meeting held on 30th May, 2022 declared a final dividend of H 1/- per equity share of face value of H 10/- each fully paid up of the Company (i.e. 10%).

The Board of Directors in its meeting held on 25th May 2023, recommended a final dividend of INR 1/- per fully paid up equity share of INR 10 each besides payment of dividend on non convertible redeemable preference shares (7% and or 10.50% as applicable) for the financial year 2022-23, on a proportionate basis from the date of respective allotments. The same is subject to approval of shareholders at the ensuing Annual General meeting.

36. Lease disclosures

Where Company is a lessee

The Company had entered into a lease contract for its Corporate office building having lease term of nine years and sugar godowns for a lease term of 3 years. The Company is restricted from assigning and subleasing the leased assets, with exception in certain cases. The lease has a lock-in period of 3 years and an option with the lessee to terminate the lessee after the said period. The Company does not have any variable lease payment arrangements.

Transaction price allocated to the performance obligation (yet to complete)

The aggregate amount of transaction price allocated to the performance obligations (yet to complete) as at 31 March 2023 is INR 1,370.45 lakhs (31 March 2022: INR 1,084.92 lakhs). This balance represents the advance received from customers (gross) against sale of real estate properties/sale of sugar/rental income. The management expects collect the remaining balance of consideration in the coming years. These balances will be recognised as revenue in future years as per the policy of the Company.

Revenue from operations as per Ind AS 115

Performance obligation of the Company Real Estate Segment

The agreement to sell states that the Customer is entitled to a fully developed residential apartments and villas. There can be various goods like labour, building materials, etc. and construction services that are integrated to construct and provide a built up apartments and villas. However, the ancillary services like parking lot, gymnasium, club membership etc., do not affect the benefits that customer may obtain from the apartment individually. The Company is providing a significant integration service of combining the material and construction services for the overall promise to deliver the fully built apartment/villa/ floor in a township together with ancillary parking space. On the other hand, facilities like gymnasium and club membership are separately identifiable and the intent of the Company does not really integrate them with construction service to deliver a combined output.

Based on above analysis, the performance obligation is identified as:

- A fully developed apartment/villa in the township

- Ancillary amenities like: club membership, gymnasium membership etc.

The price charged from the customer shall be allocated on respective obligations based on their standalone selling price. Further, there is a significant time gap between the payments received from customers and the point of revenue recognition. Hence, it is concluded by the Company that there is a financing component on funds received from customer as the Company uses such advances for funding its construction per the guidance of IND AS 115. However, financing component has not been separately accounted for in the current year as the project is nearing completion. For other segments, refer accounting policies 2.1.m.

38. Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the results of operations during the reporting year end. Although these estimates and associated assumptions are based upon historical experiences and various other factors besides management''s best knowledge of current events and actions, actual results could differ from these estimates. The estimates and underlying assumptions are reviewed on a periodic basis. Any revision in the accounting estimates is recognised in the period in which the results are known/materialise.

In the process of applying the company''s accounting policies, management has made the following judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the financial statements:

i) Income Tax Balances and related contingencies

The Company has significant litigations outstanding as at 31 March 2023 which includes income tax and wealth tax. The eventual outcome of these tax proceedings is dependent on the outcome of future events and unexpected adverse outcomes could significantly impact the Company''s reported profits and balance sheet position. The amounts involved are material and the application of accounting principles as given under Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets, in order to determine the amount to be recorded as a liability or to be disclosed as a contingent liability, in each case, is inherently subjective, and needs careful evaluation and judgement to be applied by the management. Key judgments are also made by the management in estimating the amount of liabilities, provisions and/or contingent liabilities related to aforementioned litigations.

ii) Impairment assessment of non-current investments in subsidiaries and joint venture

The Company has significant investment and loans in subsidiaries and Joint ventures, which has been carried at cost in the standalone financial statements. The impairment assessment of these investments and loans is inherently subjective due to reliance on net worth of investee, valuations of the assets held and cash flow projections of these investee companies. The key assumptions underpinning management''s assessment of the valuation model includes, but are not limited to future growth rates, discount rates, estimated future operating and capital expenditure.

iii) Revenue recognition and Inventory from real estate project

Revenue recognition from real estate project requires significant judgments to be applied in determining the amount of revenue to be recognised, such as whether revenue to be booked over time or in time, whether the Company has enforceable right to payment for performance completed to date or the customer controls the assets as it is created etc. Significant judgements are also involved in estimating the amount of financing component from the total contract value. The amount of revenue to be recognised is closely linked to the project inventory.

iv) Valuation of investment property

Investment property is stated at cost. However, as per Ind AS 40, there is a requirement to disclose fair value as at the balance sheet date. The Group engaged independent valuation specialists to determine the fair value of its investment property as at reporting date.

v) Defined Benefit obligation

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long- term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

vi) Recoverability of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forward can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.

vii) Useful lives of depreciable assets

Management reviews its estimate of the useful lives of Property, plant and equipment at each reporting date, based on the expected utility of the assets, assessed by technical experts.

viii) Inventories

Management estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices.

Further, the Company has certain litigations involving employees, for which a sufficiently reliable estimate of the amount of the obligation cannot be made. Based on management assessment and in-house legal team''s advice, the management believes that the Company has reasonable chances of succeeding before the courts/appellate authorities and does not foresee any material liability. Pending the final decision on the matters, no further provision has been made in the financial statements.

*UP Government have levied regulatory fees on sale and captive consumption of molasses @ H 20/-Qtl wef 24.12.2021 vide order passed by the office of the Commissioner cum molasses controller Allahabad vide order no 4605-5153 dated 12.01.2022. UP Sugar Mill Association filed a writ petition at Hon''able High Court Lucknow Bench challenging this order levying regulatory fees on molasses vide write petition no 589 of 2022. Pending outcome of the case the Company has deposited entire amount accrued on account of regulatory fees amounting to INR 213.96 lakhs (31 March 2022: INR 87.60 lacs) under protest and any liabililty would be provided as and when decided by the court.

Based on discussions with the solicitors/ favourable decisions in similar cases/ legal opinions taken by the Company, the management does not expect these claims to succeed and hence, no provision against above is considered necessary.

Value added tax/ Sales tax liability on sale of molasses

Based on discussions with the solicitors/ favourable decisions in similar cases/ legal opinions taken by the Company, the management does not expect these claims to succeed and hence, no provision against above is considered necessary.The Company has sold molasses to certain parties without charging sales tax on the basis of stay order by Hon''ble High Court of Allahabad and is pending with Hon''ble Supreme Court. It says that during the pendency of special appeal before Hon''ble Supreme Court, the Company shall not realise taxes on sale of molasses. In case the order is decided against the parties by the Hon''ble Supreme Court, the Company would be liable to collect and pay VAT/Sales tax to the department along with interest and penalty. Amount involved is indeterminate.

C 3,38,60,365 (31 March 2022: 25,689,204) shares of Chambal Fertilizers & Chemical Limited amounting to INR 89,425.23 lakhs (31 March 2022: INR 1,08,434.13 lakhs) pledged by the Company to the lenders of its subsidiaries as follows:

- Nil (31 March 2022: 11,80,125) shares pledged on behalf of Simon India Limited

- 2,27,76,164 (31 March 2022: 1,57,14,079) shares pledged on behalf of Zuari International Limited (Formerly Zuari Investments Limited)

- Nil (31 March 2022: 6,35,000) shares pledged on behalf of Zuari Sugar & Power Limited

- 36,44,201 (31 March 2022: 15,00,000) shares pledged on behalf of Indian Furniture Products Limited

- 74,40,000 (31 March 2022: 66,60,000) shares pledged on behalf of Zuari Infraworld India Limited.

Further, 55,59,568 shares of zuari agro chemicals limited amounting to H 6738.19 Lakhs pledged by the company to the lender of Zuari International Limited.

42. Financial risk management objectives and policies

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk.

(i) Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Such borrowings are based on fixed as well as floating interest rate. Interest rate risk is determined by current market interest rates, projected debt servicing capability and view on future interest rate. The Company mitigates this risk by regularly assessing the market scenario and finding appropriate financial instruments.

(iii) Equity price risk

The Company''s investment in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. Having regard to the intrinsic worth, intent and long term nature of securities, fluctuation in their prices are considered acceptable. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

The exposure of equity securities price risk arises from investment FVTOCI held by the company. At the reporting date, the exposure to listed equity securities at fair value was H 1,79,740.17 lakhs (31 March 2022: H 2,76,124.55 lakhs) and unlisted equity securities at fair value is H 60.17 lakhs (31 March 2022: H 60.17 lakhs), which are classified at FVTOCI . Refer note 44 Fair values measurement.

Equity price sensitivity

The table below summarises the impact of increase/decrease of the index on the Company''s equity and profit for the period. The analysis is based on the assumption that the equity index had increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s equity instruments moved in line with the index.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is mainly exposed to credit risk from its operating activities (trade receivables) and loans to related parties.

Customer credit risk is managed as per the Company''s established policy, procedures and control relating to customer credit risk management. The Company assesses the credit quality of the counterparties regularly. Outstanding customer receivables are regularly monitored and assessed. Impairment allowance for trade receivables if any, is provided on the basis of respective credit risk of individual customer as on the reporting date.

The company has assessed the risk as low.

Given the nature of business operations, the Company''s receivables from real estate business does not have any expected credit loss as transfer of legal title of properties sold is generally passed on to the customer, once the Company receives the entire consideration. Further, the credit risk of sugar business is also low as the Company sells sugar on ''cash and carry'' basis.

The loans have been given to various subsidiary companies, a joint venture and an associate (Zuari Agro Chemicals Ltd.) to support their operations. The same are subject to impairment testing alongwith related investments. Refer Note 38(ii).

Liquidity risk

Liquidity risk is the risk where the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities when due.

The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

43. Capital management

For the purpose of the company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the company.The Company''s objective with respect to capital management is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity/ internal accruals and borrowings, both short term and long term.

The various ratios for monitoring financial position/ capital of the company are provided in Note No 53.

In order to achieve this overall objective, the company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

C) Provident Fund

The Company contributes its share in an approved provident fund trust. The Company is liable for shortfall, if any, in the fund assets based on the government specified minimum rate of return. It has been confimred by the PF Trust that there is no shortfall as at 31st March, 2023.

47. Scheme of Amalgamation

Hon''ble National Company Law Tribunal, Mumbai vide its order dated 20 April 2022 and Hon''ble National Company Law Tribunal, New Delhi vide its order dated 28 March 2022 approved the Scheme of Amalgamation of Gobind Sugar Mills Limited (GSML) with Zuari Industries Limited (ZIL) in accordance with the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and rules framed thereunder. Both ZIL and GSML filed the certified copy of orders with Registrar of Companies, Goa and Registrar of Companies, Delhi respectively on 30 April 2022. The Appointed Date as per the scheme is 1 April 2020 and became operative from the Effective Date i.e. 30 April 2022.

On 30 April 2022, the entire business and whole of the undertaking of GSML, without any further act, deed, matter or thing, together with all properties, assets, rights, liabilities, benefits and interest therein stand transferred to and vested in and / or deemed to be transferred to and vested in ZIL, as a going concern and become the properties and liabilities of ZIL from 1 April 2020.

The key terms of the Scheme are as under:

1. Equity Shareholders of GSML to receive 1 equity share of ZIL for every 2.85 equity shares or 10000 10% NCRPS for every 1006 equity shares held in GSML, at their option.

2. Preference Shareholders of GSML to receive 7% NCRPS in ZIL on same terms and conditions as were applicable in GSML (i.e. to be redeemed after expiry of 12 years from the date of original allotment).

3. ZIL to account for amalgamation as per ''Pooling of Interest Method'' in accordance with Ind AS 103.

4. The carrying amount of investments in the shares of GSML as appearing in the books of subsidiaries of ZIL shall stand cancelled.

5. The comparative financial information in respect of prior periods presented in financial statements of ZIL shall be restated, as if amalgamation had occurred from the beginning of such comparative period (i.e on or from 01.04.2020) presented in the financial statements.

6. The difference between the amount recorded as equity and preference share capital issued as per the Scheme and the amount of share capital of GSML, after adjusting the impact of cancellation of investment in equity share capital of GSML and inter-company balances will be transferred to the Capital Reserve of ZIL, and presented separately from other Capital Reserve with disclosure of its nature and purpose in the notes to the financial statements of ZIL.

The Company had fixed 13 May 2022 as "Record Date” for ascertaining the equity and preference shareholders of GSML who are entitled to receive equity or preference shares of the ZIL consequent to amalgamation. ZIL despatched option forms on 17 May 2022 to all the equity shareholders of GSML giving them the option to opt for either equity shares or 10.5% NonConvertible Redeemable Preference Shares (10.5% NCRPS). The last date of receipt of option forms was 16 June 2022 post which ZIL alloted 3,40,580 equity shares and 58,52,034 10.50% NCRPS . Further, 59,22,080 7% NCRPS of H 10 each have also been alloted to erstwhile preference shareholder of GSML.

Pending allotment of such shares to the non-controlling shareholders , it was assumed that all non controlling shareholders of GSML will opt for equity shares of ZIL and nominal value of such shares disclosed under "Other Equity”.

48. Disclosure required under section 186(4) of Companies Act, 2013

A. Disclosure of loan given: Refer note 46 for details

B. Particulars of guarantee given/ security provided: Refer Note 40 for details

C. Particulars of investment made during the year- Refer note 46 for details

51. Additional disclosures:

(a) Compliance with number of layers of companies:

No layers of companies has been established beyond the limits prescribed under clause 87 of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

(c) Undisclosed income:

There is no such income which has not been disclosed in the books of accounts. No such income is surrendered or disclosed as income during the year in the tax assessments under Income Tax Act, 1961.

(d) No bank or Financial institutions has declared the company as "Wilful defaulter”.

(e) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

(h) Details in respect of Utilization of Borrowed funds and share premium shall be provided in respect of :

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

ii) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

ii) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

52. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stake holders which are under active consideration by the Ministry. Based on an initial assessment by the Company, the additional impact on Provident Fund contributions by the Company is not expected to be material. The Company will complete its evaluation once the subject rules are notified and will give appropriate impact in the financial statements in the year in which, the Code becomes effective and the related rules to determine the financial impact are published.

54. The Board of Directors vide its resolution dated Feb 13, 2023 has accorded its consent for the Scheme of Amalgamation with Zuari Sugar and Power Limited (a wholly owned subsidiary company) and their respective shareholders and creditors (''the Scheme''). The Board of Directors of the Zuari Sugar and Power Limited have also accorded consent to the Scheme vide their resolution dated Jan 31, 2023. The appointed date of Amalgamation as per the Scheme is 1 April 2022. The hearing of the first motion application was held on 11 May 2023 and the NCLT order was received on 19 May 2023. Pursuant to the said order, NCLT has dispensed with the holding of meetings of shareholders (both equity and preference) and creditors (both secured and unsecured) of ZIL. The said order has been filed with the Stock Exchanges on 19 May 2023 as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Company is in process to send the relevant notices to statutory authorities viz. RD, ROC, Stock Exchanges, Income Tax, Official Liquidator etc. inviting representations, if any, in connection with the proposed Scheme of Amalgamation to be made to the NCLT and the Company.

55. The Company had demerged its fertilizer undertaking to Zuari Agro Chemicals Limited (ZACL) with effect from 1 July 2011. The Company had, during the financial year ended 31 March 2017, based on Hon''ble High Court Order on demerger of fertilizer undertaking, identified the amount of income tax paid or payable under protest pertaining to fertilizer undertaking demerged into ZACL. The Company has exchanged letter of mutual understanding with ZACL, wherein, ZACL has paid such amount of tax paid or payable under protest by the Company. The balance carrying value of such advance is INR 522.16 lakhs (31 March 2022: INR 522.16 lakhs) and classified under non-current liability.

56. As per Ind AS 108- "Operating Segment”, segment information has been provided under the Notes to Consolidated Financial Statements.

57. Previous year comparative figures have been regrouped wherever necessary to correspond to current year figures.


Mar 31, 2018

1. Significant accounting judgments, estimates and assumptions

The preparation of the company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments:

In the process of applying the company''s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements:

1) Evaluation of indicators for impairment of assets

The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

2) Impairment of financial assets

At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.

3) Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events

Estimates and assumptions:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

1) Revenue and inventories

The Company recognizes revenue using the percentage of completion method. This requires forecasts to be made of total budgeted cost with the outcomes of underlying construction and service contracts, which require assessments and judgments to be made on changes in work scopes, claims (compensation, rebates etc.) and other payments to the extent they are probable and they are capable of being reliably measured. For the purpose of making estimates for claims, the Company used the available contractual and historical information.

2) Useful life of property, plant and equipment

The management estimates the useful life and residual value of property, plant and equipment based on technical evaluation. These assumptions are reviewed at each reporting date.

3) Valuation of investment property

Investment property is stated at cost. However, as per Ind AS 40, there is a requirement to disclose fair value as at the balance sheet date. The Group engaged independent valuation specialists to determine the fair value of its investment property as at reporting date.

4) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognized by the Company.

5) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

Further details about gratuity obligations are given in Note 39.

6) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 35 for further disclosures.

D. The Company has provided following securities to Indusind Bank for extending loan to Zuari Sugar and power Limited (ZSPL), wholly owned subsidiary of the Company. As on 31 March 2018, loan disbursement amount is of Rs, 9,997.50 lakhs (31 March 2017 of Rs, 9,483.00 lakhs):

a. Exclusive charge on immovable PPE owned by the Company

b. The land collateral include of 6.89 acre for phase I residential development and 16 acre for phase II residential project being executed by the Company in Goa.

c. Exclusive charge by way of hypothecation over all present and future current and movable property, plant and equipment of the Company excluding all land (being carried as inventory) other than land to be mortgaged to Indusind bank Limited and excluding non-current investment of Synthesis Energy System Inc.

E. The Company has given a plot of land as security admeasuring an area about 1,26,549 Sq. mt. situated at Zuarinagar Sancoale, Goa within the limit of village panchayat of Sancoale, Taluka and Sub District of Mormugao, District of South Goa, in favour of State Bank of India, Mumbai to issue Standby Letter of Credit (SBLC) to the extent of AED 35 Million { Rs, 6,209 lakhs (previous year: Rs, 6,181 lakhs) at the closing rate of 1 AED = Rs, 17.74 (previous year: Rs, 17.66)} to Zuari Infra Middle East Limited, stepdown wholly owned subsidiary of the Company .

F. The Company has provided the following security to Nederlandse Financierings - Maatschappij Voor Ontwikkelingslanden N.V (FMO) for extending loan to Gobind Sugar Mills Limited (GSML), stepdown subsidiary of the Company.

Exclusive charge on Immovable property having survey No 119/1 admeasures 51,425 sq. mtrs, survey No 120/1 admeasures 8075 sq. mtrs,survey No 121 admeasures 32239 sq. mtrs,survey No 129/1 admeasures 24,625 sq. mtrs,survey No 130/1 admeasures 86175 sq. mtrs and survey No 131/1 admeasures 19,050 sq. mtrs situated at Sancoale within the limits of Village panchayant of Sancoale Goa, Mormugao Taluka, Sub Districity of Registration District of State of Goa.

H. The Company has undertaken to provide continued financial support to Indian Furniture Products Limited, Zuari Commodity Trading Limited and Zuari Sugar & Power Limited, as and when required. As per the latest audited financial statements of these subsidiaries, they have accumulated losses which have resulted in erosion of substantial portion of its net worth.

7. Financial risk management objectives and policies

The Company''s principal financial liabilities, comprise loans and borrowings, trade and other payables, security deposits and employee liabilities. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also holds FVTOCI investments.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management is supported by a Risk Management Compliance Board that advises on financial risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to the Company''s senior management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. All financial assets and financial liabilities affected by market risk include loans and borrowings, deposits and FVTOCI investments.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at 31 March 2018.

The analyses exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations, provisions and the non-financial assets and liabilities of foreign operations.

The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2018 and 31 March 2017.

- The sensitivity of equity is calculated at 31 March 2018 and 31 March 2017 for the effects of the assumed changes of the underlying risk.

(i) Interest rate risk

Applicability - Financial liabilities

The company has short term loans from Federal Bank and ICICI bank.

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s short term debt obligations with floating interest rates. The Company always try to ensure minimal cash outflows. The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility.

(ii) Foreign currency risk Applicability -

Company operating activities (when revenue or expense is denominated in foreign currencies)

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates of various currencies with INR, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets

The movement in the pre-tax effect is a result of a change in the fair value of financial instruments not designated in a hedge relationship and monetary assets and liabilities denominated in USD & AED where the functional currency of the entity is a currency other than USD & AED.

(iii) Equity price risk

Applicability

The Company''s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was Rs, 55 lakhs. Sensitivity analyses of these investments have been provided in Note 35.

At the reporting date, the exposure to listed equity securities at fair value was Rs,157,081.25 lakhs. A decrease of 5% on the BSE/NSE market price could have an impact of approximately Rs,7,854.06 lakhs on the OCI or equity attributable to the Company. An increase of 5% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a) Real estate business

The Company''s trade receivables does not have any expected credit loss as registry of properties sold is generally carried out once the Company receives the entire payment. During the periods presented, the Company made no write-offs of trade receivables and no recoveries from receivables previously written off.

b) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis.

Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning tool.

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/ long term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. Selective hedging is used within the Company to manage risk concentrations at both the relationship and industry levels.

8. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

Notes:

(i) The equity securities for which the company has made an irrevocable election at initial recognition to recognize charges in fair value through OCI rather than profit and loss are investments which are not held for trading purposes.

(ii) The management assessed that carrying value of financial assets and financial liabilities, carried at amortized cost, are approximately equal to their fair values at respective balance sheet dates and do not significantly vary from the respective amounts in the balance sheets.

(iii) The fair values of the unquoted equity shares and preference
shares have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments and preference shares.

(iv) The Company holds investments in equity shares of its subsidiary companies and joint venture. These are recorded at cost in the Company''s separate financial statements.

(v) Difference between the fair value of investments in preference shares of IFPL (the subsidiary company) and its transaction price is recorded as deemed investment in IFPL.

(vi) The fair value of loans from banks and financial guarantee liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth rates. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

9. Related party disclosures

A. The list of related parties as identified by the management is as under:

i) Subsidiaries and stepdown subsidiaries of the Company:

1) Indian Furniture Products Limited

2) Simon India Limited

3) Zuari Management Services Limited

4) Zuari Infraworld India Limited

5) Zuari Infra Middle East Limited (subsidiary of Zuari Infraworld India Limited )

6) Zuari Infraworld SJM Elysium Properties LLC (formerly known as SJM Elysium Properties LLC) (subsidiary of Zuari Infra Middle East

6) Limited)

7) Zuari Sugar and Power Limited (formerly known as Zuari Financial Services Limited)

8) Zuari Investments Limited

9) Zuari Insurance Brokers Limited - Subsidiary of Zuari Finserv Private Limited

10) Zuari Commodity Trading Limited - Subsidiary of Zuari Finserv Private Limited

11) Gobind Sugar Mills Limited (subsidiary of Zuari Investments Limited

12) Zuari Finserve Private Limited (Formerly Known as Horizon View Developers Pvt. Ltd. - w.e.f 21 October 2016

ii) Joint Ventures of the Company:

1) Zuari Indian Oiltanking Private Limited

2) Forte Furniture Products India Private Limited (Joint venture of Indian Furniture Products Limited (w.e.f 1st Feb''2017)

3) Soundaryaa IFPL Interiors Limited, a Joint venture of Indian Furniture Products Limited

iii) Associates of the Company:

1) Brajbhumi Nirmaan Private Limited, an associate of Zuari Infraworld India Limited

2) Pranati Niketan Private Limited, an associate of Zuari Infraworld India Limited

3) Darshan Nirmaan Private Limited, an associate Zuari Infraworld India Limited

4) New EROS Tradecom Limited, an associate of Zuari Investments Limited

5) Zuari Agro Chemicals Limited, an associate of Zuari Global Limited

6) Mangalore Chemicals and Fertilisers Limited, a subsidiary of Zuari Agro Chemicals Limited

7) Zuari Maroc Phosphates Private Limited, a joint venture of Zuari Agro Chemicals Limited

8) Paradeep Phosphates Limited, a subsidiary of Zuari Maroc Phosphates Private Limited

9) MCA Phosphates Pte. Limited, a joint venture of Zuari Agro Chemicals Limited

10) Fosfatos del Pacifico S.A, an associate of MCA Phosphates Pte. Limited

11) Adventz Trading DMCC, a subsidiary of Zuari Agro Chemicals Limited

12) Saket Mansions Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

13) Suhana Properties Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

14) Beatle Agencies Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

15) Kushal Infraproperty Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

16) Divine Realdev Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

17) Hopeful Sales Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

18) Bahubali Tradecomm Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

19) Nexus Vintrade Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

20) Mayapur Commercial Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

21) Neobeam Agents Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

22) Rosewood Agencies Private Limited, a subsidiary of Brajbhumi Nirmaan Private Limited

iv) A. Enterprises having significant influence:

1. Globalware Trading and Holdings Limited

B. Enterprises where the Company is having significant influence:

1. Zuari Industries Limited Employees Provident Fund

2. Zuari Industries Limited Sr. Staff Superannuation Fund

3. Zuari Industries Limited Non Management Employees Pension Fund

4. Zuari Industries Limited Gratuity Fund

v) Key Management Personnel

1) Mr. S. K. Poddar, Chairman

2) Mr. N Suresh Krishnan, Managing Director

3) Mrs.Jyotsna Poddar, Executive director

4) Mr. Marco Wadia - Independent and Non-Executive Director

5) Mr. Krishan Kumar Gupta - Independent and Non-Executive director

6) Mr. Jayant N Godbole-Independent and Non-Executive director

vi) Relative of key management personnel

1) Mrs. Rekha Krishnan - wife of Mr. N. Suresh Krishnan.

2) Mr. Akshay Poddar, son of Mr. S.K Poddar

Notes:

1. The Company has provided Corporate guarantee of USD 16.34 Million (Rs,10,596 lakhs closing rate of USD 1 = Rs, 64.85) to State Bank of India, for extending credit facility/Loan to Zuari Infra Middle East Limited (ZIMEL) step down wholly owned subsidiary of the Company. However, the Bank has not disbursed loan amount as on 31 March 2018.

2. Sale of flat to following KMP (or relative of KMP)-

a. Rekha Krishnan -wife of Mr. N. Suresh Krishnan - Sale of flat for the amount of Rs, 77.40 lakhs against which net advance received is for Rs,17.28 lakhs ( 31st March 2017 of Rs 29.36 Lakhs ) after adjustment of taxes deposited on customerRs,s behalf

b. Krishan Kumar Gupta - Sale of flat for the amount of Rs, 77.40 lakhs against which net advance received is for Rs,17.38 lakhs ( 31st March 2017 of Rs, 83.54 lakhs ) after adjustment of taxes deposited on customer''s behalf

3. The Company has provided Corporate guarantee for Rs,10,000 lakhs to Indusind Bank for extending loan to Zuari Sugar and power Limited (ZSPL), wholly owned subsidiary of the Company. As on 31 March 2018, loan disbursement amount is of Rs, 9,997.50 lakhs ( 31st March 2017 of Rs 9483.00 Lakhs ) and also provided following security:

a. Exclusive charge on immovable fixed assets owned by the Company

b. The land collateral should include at least 6.89 acre for phase I residential development and 16 acre for phase II residential project being executed by the Company in Goa.

c. Exclusive charge by way of hypotheticationover all present and future current and movable property, plant & equipment of the Company excluding all land (Being carried as inventory) other than land to be mortgaged to Indusind bank Limited and excluding Non Current Investment of Synthesis Energy System Inc

4. The Company has given a plot of land as security admeasuring an area about 1,26,549 Sq.mtrs situated at Zuarinagar Sancoale, Goa within the limit of village panchayat of Sancoale, Taluka and Sub District of Mormugao, District of South Goa, in favour of State Bank of India, Mumbai to issue Standby Letter of Credit (SBLC) to the extent of AED 35 Million {Rs,6,209 lakhs (previous year: Rs,6,181 lakhs at the closing rate of 1 AED = Rs,17.74 (previous year: Rs,17.66)} to Zuari Infra Middle East Limited, stepdown wholly owned subsidiary of the Company .

5. The Company has provided Corporate guarantee for Rs, 10,304.93 lakhs (USD 16 Million) to Nederlandse Financierings - Maatschappij Voor Ontwikkelingslanden N.V ( FMO ) for extending loan to Gobind Sugar Mills Limited (GSML), Indirect subsidiary of the Company. As on March 31, 2018, loan disbursement amount is of Rs, 9,008.90 lakhs and also provided following security:

a. Exclusive charge on Immovable property having survey No 119/1 admersures 51425 sq. mtrs ,survey No 120/1 admersures 8075 sq. mtrs,survey No 121 admersures 32239 sq. mtrs,survey No 129/1 admersures 24625 sq. mtrs,survey No 130/1 admersures 86175 sq. mtrs and survey No 131/1 admersures 19050 sq. mtrs situated at Sancoale within the limits of Village panchayant of Sancoale Goa, Mormugao Taluka, Sub Districity of Registration District of State of Goa.

6. The Company has undertaken to provide continued financial support, as and when required. As per the latest audited financial statements of these subsidiaries, they have accumulated losses which have resulted in erosion of substantial portion of its net worth.

7. Relevant transaction and closing balances of Demerged Company are shown in the name of Resulting Company as at and for the year ended 31 March 2018.

10 During the year ended 31 March 2018, the HonRs,ble National Company Law Tribunal, Mumbai Bench, of Mumbai vide its order dated 09 November 2017 approved the arrangement as embodied in the Scheme of Arrangement (the "Scheme") of the Demerged Service Oriented Undertaking of Zuari Investments Limited ("ZIL" or "Demerged Company"), the wholly owned subsidiary of the Company with another wholly owned subsidiary of the Company, the Zuari Finserv Private Limited (formerly known as Horizonview Developers Private Limited) ("ZFPL" or "Resulting Company") and the same has been filed with Registrar of Companies on 5 January 2018 ("Effective Date"). On complying with the requisite formalities by the Company, the Scheme became effective from 1 April 2016 ("Appointed Date").

As an integral part of the Scheme, and, upon the coming into effect of the Scheme, with effect from the Appointed Date, the issued, subscribed and paid up equity share capital of the Demerged Company shall stand reduced by cancelling and extinguishing paid up equity share capital of the Demerged Company by Rs,1,798.84 lakhs comprising of 17,988,426 equity shares of face value of Rs,10 each.

Correspondingly, the share capital of the Resulting Company, shall without any further application, act, payment, consent, instrument or deed, issue and allot 17,988,426 fully paid up equity shares of the resulting company of face value of Rs,10/- each to the Company who is holding the entire beneficial interest in the share capital of the Demerged Company, in accordance with the terms of the Scheme. Accordingly, Rs,1,798.84 lakhs has been reduced from the investments amount in ZIL and corresponding, added to the investments value of ZFPL.

The Resulting Company has applied for the updation of records in regards to share capital with Registrar of Companies, Goa. However, the same are yet to be updated in the records with Registrar of Companies, Goa.

11 Under section 133A of the Income Tax Act, 1961, the income tax department carried out a survey at the company''s premises in February, 2014. Pursuant to the discussion during the survey, the company had deposited a sum ofRs,5,500 lakhs towards income tax demand mainly towards disallowance under section 14A of the Income Tax Act, 1961, disallowance for diminution invalue of fertilizerbonds and disallowance under Section36(1)(iii) of the Income Tax Act, 1961. The company is carrying the same amount of income tax provision including interest thereon provided in an earlier year for various assessment years aggregating to Rs,3,916.13 lakhs.

Income Tax Appellate Tribunal has, during the current year issued favorable decisions for assessment years 2006-07, 2008-09,2009-10, 201011 and 2011-12. Appeal effect orders are not yet received from the department. Pending receipt of such orders, interest on income tax refund and provision towards additional income tax has not been recognized as the amount is presently not reasonably determinable.

12 The company had demerged its fertilizer undertaking to Zuari Agro Chemicals Limited (ZACL) with effect from 1 July 2011.

The Company has, during the year march 2017, based on Hon''ble High Court Order on demerger of fertilizer undertaking, identified the amount of income tax paid under protest pertaining to fertilizer undertaking demerged into ZACL.

The Company has exchanged letter of mutual understanding with ZACL wherein ZACL has paid such amount of tax paid under protest by the Company. During the previous year, the company has received Rs, 2,533.85 lakhs from ZACL on this account and adjusted the same from income tax assets pending completion of final assessment/litigation in respect of such financial years, out of which during the current year, the Company has received a favourable order of Rs, 145.18 lakhs in respect of assessment year 2008-09.

13 In li ne with the provisions of Ind AS 108 - "Operating Segments", the Company is engaged in real estate development, which constitute single reportable business segment. The Company is operating only in India and there is no other significant geographical segment.

14 Und er instructions from Special Court (trial of offences relating to transactions in securities ) Act, 1992 and in respect of shareholders who could not exercise their rights in view of deposits, mistakes, discrepancy in holdings etc., 8,051 (previous year 8,051) right''s equity shares entitlement have been kept in abeyance pursuant to Section 126 of the Companies Act, 2013.

15. During the year ended 31 March 2018, the Company reclassified/regrouped certain previous year''s numbers i.e. 31 March 2017. Considering the nature of these reclassification/regrouping, the Company does not intend to present opening balance sheet of previous year reported. Refer below for the same.


Mar 31, 2016

b. Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 10/- Share. Each share holder of equity shares is entitled to one vote per share.

The Company declares and pay dividends in Indian rupees. The dividend proposed by Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

For the year ended 31st March 2016, the amount of per share dividend recognized as distribution to equity share holders was Rs.1/- (31st March 2015:: Rs.1/-), subject to approval of shareholders.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/member and other declarations received from shareholders regarding beneficial interest, the above holding represents both legal and beneficial ownership of shares.

** During the previous year ended 31 March 2015, Adventz Investments and Holdings Limited had been merged with Adventz Finance Private Limited vide court order dated 2nd June 2014 and accordingly all shares held by Adventz Investments and Holdings Limited are now vested with Adventz Finance Private Limited.

* Refer note 40

(i) The loan is secured by the first exclusive charge on specific immovable property (shown as inventories) of the Company.

(ii) The Company has undertaken that during the term of the loan, it shall continue to hold and it shall not enter into a transaction to encumber any of the following equity shares which are currently directly or indirectly held by it:

a) 100% equity shares in the total equity share capital of Zuari Investment Limited (ZIL).

b) 30% equity shares in the total equity share capital of Zuari Agro Chemicals Limited.

c) 12% equity shares in the total equity share capital of Chambal Fertilizers and Chemicals Limited.

d) 25% equity shares in the total equity share capital of Gobind Sugar Mills Ltd.

(iii) Promoter group shall continue to have management control of the Company and ZIL (Subsidiary company) and hold majority ownership (at least 51% of the total equity share capital without any encumbrance) in the Company including the ability to appoint majority Directors of the Board of the Company and ZIL.

(a) (i) Pursuant to the Composite Scheme of Arrangement and Amalgamation among iKisan Limited, Kakinada Fertilisers Limited (KFL), Nagarjuna Fertilisers and Chemicals Limited (NFCL) and Nagarjuna Oil Refinery Limited (NORL), the Company had got one fully paid up equity share of Nagarjuna Oil Refinery Limited of Rs.1/- each for every one equity share of Rs.10/- held in NFCL and eleven equity shares in KFL of Rs.1/- each for every ten equity shares of Rs.10/- held in NFCL. The name of KFL has subsequent to merger on rights issue changed to NFCL. The cost of shares held in Nagarjuna Fertilizers and Chemicals Limited had been allocated in the ratio of 76.65% and 23.35% to the shares of Nagarjuna Oil Refinery Limited and Nagarjuna Fertilizers and Chemicals Limited. (formerly known as Kakinada Fertilizers Limited)

(ii) The Company''s investment in Nagarjuna Oil Refinery Limited aggregated to Rs.6,944.09 Lacs (31st March 2015:: Rs.6,944.09 Lacs) (based on cost allocation as above in (i) and market value of this is Rs.1,085.37 Lacs (31st

March 2015:: Rs.1,205.64 Lacs). Hence, there is a diminution in the value of investment by Rs.5,858.72 Lacs (31st March 2015:: Rs.5,738.45 Lacs)

(iii) The shares of Nagarjuna Fertilizers and Chemicals Limited alloted to the Company, are not yet listed on stock exchange, pending receipt of permission from Securities and Exchange Board of India.

(b) The Company has investment of Rs.5,103.34 Lacs in the equity shares and Rs.1,000 Lacs in redeemable convertible non-cumulative preference shares of one of its subsidiary company, Indian Furniture Products Limited. The Company has assured to provide continuous financial support. As per the latest audited financial statements of this subsidiary, it has accumulated losses which have resulted in erosion of substantial portion of its net worth.

(c) During the year, one of the subsidiary company, Globex Limited was put into liquidation vide resolution passed in the meeting of the parent shareholder company''s representatives held on 30th October 2015. The Company has received entire amount of Rs.13.40 Lacs towards refund of equity.

(d) The Company had entered into an agreement for sale of equity shares of Synthesis Energy System Inc aggregating to Rs.2,235.12 Lacs to one of its subsidiary company, Simon India Limited (SIL) at a price to be determined, which shall not be lower than the book value. During the current year, the Company has signed termination of the earlier agreement with SIL hence the Rs.1500 Lacs received as advance against these shares was refunded back to SIL.

(a) The Company has entered into Memorandum of understanding with Zuari Agro Chemicals Limited (ZACL) for sale of 3,22,67,741 equity shares of Nagarjuna Fertilizers and Chemicals Limited (NFCL), for a consideration that shall not be less than the market value of the shares as and when the share of NFCL are listed on the stock Exchange or book value. Pending listing of the shares of NFCL on the stock Exchanges, ZACL has paid an advance of Rs.11,920.00 Lacs to the Company, towards purchase of shares, which shall be adjusted thereafter from the total consideration amount at the time of the Sale / Transfer.

c. The Company has given a letter of Comfort to Ratnakar Bank Limited for the purpose of facilitating the loans of Rs.2,000.00 Lacs (31st March 2015:: Rs.2,000 Lacs) taken by Gobind Sugar Mills Limited.

d. The Company has given as collateral the specific land (appearing under inventories) by way of first and paramount charge in favour of a bank for the credit facility availed by one of its subsidiary.

1. Segmental Information Primary Segment

The Company has disclosed business segment as primary segment. The segments have been identified and reported taking into account the nature of products and services, the differing risks and returns, the organization structure and the internal reporting system. The identified reportable segments for the year under review are Fertilizers and land development. Fertilizer segment includes trading of fertilizers and pesticides. Land development segment includes acquiring lands with the objective of granting rights to other parties to develop the land under joint development agreement.

Secondary Segment - Geographical Segment.

The Company operates in India and therefore caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

Notes :

1. Zuari Investment Limited has undertaken that for the term loan of the Company of Rs.8,000 Lacs obtained by the Company from Rabo India Finance Ltd., it shall continue to hold 25% equity shares in the total equity share capital of Gobind Sugar Mills Ltd during the term of the loan.

2. Zuari Management Services Limited has undertaken that for the term loan of the Company of '' 8,000 Lacs obtained by the Company from Rabo India Finance Ltd., it shall continue to hold 10% equity shares in the total equity share capital of Zuari Agro Chemicals Limited during the term of the loan.

3. The Company has given a letter of Comfort to Ratnakar Bank Limited for the purpose of facilitating the loans of Rs.2,000.00 Lacs (31st March 2015 :: Rs. 2,000 Lacs) taken by Gobind Sugar Mills Limited.

4. The Company has given as collateral the specific land (appearing under inventories) by way of first and paramount charge in favour of a bank for the credit facility availed by Zuari infra world India Limited aggregating to Rs.17,677 Lacs

* The name of the company "Zuari Seeds Limited” has been changed to "Zuari Agri Sciences Limited” w.e.f.11th September, 2014.

** The name of the company "Zuari Maroc Phosphates Limited” has been changed to "Zuari Maroc Phosphates Private Limited” w.e.f.30th March, 2015.

*** The name of the company "Zuari Indian Oil tanking Limited” has been changed to "Zuari Indian Oil tanking Private Limited” w.e.f.15th April, 2015.

5. Employee benefits:

(A) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.

Statement of Profit and Loss

Net employee benefit expense (recognized in Employee Cost) for the year ended 31st March, 2016

B. Provident Fund

The Company has set up Provident Fund Trust, which was managed by the Company as per the Guideline Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. With the transfer of Fertilizer undertaking to Zuari Agro Chemicals Limited, on demerger with effect from 1st July, 2011, the Trust is being managed by Zuari Agro Chemicals Limited and there is surplus in the fund balance in the provident fund trust maintained by the said company.

6. a). The Company has obtained office premises, apartments and warehouses on operating leases for the period ranging from 0-2 years. In all the cases, the agreements are further renewable at the option of the Company. There is escalation clause in the respective lease agreements. All these leases are cancellable in nature. The total lease payments in respect of such leases recognized in the statement of profit and loss for the year are Rs.3.12 Lacs (Previous year Rs.3.11Lacs).

b). The Company has given buildings on operating lease for the period of three years. In all the cases, the agreements are further renewable at the option of the Company. All these leases are cancellable in nature. There is no escalation clause in the respective lease agreements. The total lease income received in respect of such leases recognized in the statement of profit and loss Rs.31.44 Lacs (Previous year Rs.29.41 Lacs).

7. Under instructions from the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 and in respect of shareholders who could not exercise their rights in view of disputes, mistakes, discrepancy in holdings, etc., 8,051(previous year 8,051) Rights'' Equity Shares entitlements have been kept in abeyance pursuant to Section 126 of the Companies Act, 2013.

8. Disclosure required under Section 186 (4) of the Companies Act 2013

9. Income Tax Appellate Tribunal has, during the current year issued favourable decisions for certain past years but issue related to Section 14A of the Income Tax Act, 1961 has been set-aside and assessing officer has been asked to do fresh adjudication. The Company is carrying the same amount of income tax provision (already deposited in an earlier year) including interest thereon, provided in an earlier year for those years. The Company is of the view that the amount of provision so made is adequate. Also, appeal effect order for the assessment year 2009-10, is not yet received from the department. Pending receipt of such order, interest on income tax refund has not been recognized as the amount is presently not reasonably determinable.

10. Previous year’s figures have been regrouped/reclassified, where necessary, to confirm to this year’s classification.


Mar 31, 2015

1. Corporate Information

The Company is a public Company domiciled in India. The Company is in the business of trading of pesticides and complex fertilisers. The Company caters to the demand of the farmers all over the country. During the previous year, the Company has acquired lands with the objective of granting rights to other parties to develop the land under joint development agreement.

2. Basis for preparation

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP).The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rule 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative financial instruments which have been measured at fair value. The accounting policies have been consistently applied by the Company and are consistent with those used in previous year, except for the change in accounting policy explained below.

3.Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- Share. Each share holder of equity shares is entitled to one vote per share.

The Company declares and pay dividends in Indian rupees. The dividend proposed by Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

For the year ended 31st March, 2015, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 1/- (31st March, 2014:: Rs. 1/-), subject to approval of shareholders.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(i) The loan is secured by the first exclusive charge on specific immovable property (shown as inventories) of the Company.

(ii) The Company has undertaken that during the term of the loan, it shall continue to hold and it shall not enter into a transaction to encumber any of the following equity shares which are currently directly or indirectly held by it:

(a) 10% equity shares in the total equity share capital of Gulbarga Cement Limited unless diluted by an increase in shareholding by other entities / shareholders. During the year, the Company has sold its share held in Gulbarga Cement Limited to an affiliate of Zuari Cement Limited and is in the process of discussion with Rabo India Finance Limited to prepay part of the loan out of the proceeds.

(b) 100% equity shares in the total equity share capital of Zuari Investments Limited (ZIL).

(c) 30% equity shares in the total equity share capital of Zuari Agro Chemicals Limited (ZACL).

(d) 12% equity shares in the total equity share capital of Chambal Fertilisers and Chemicals Limited (CFCL).

(e) 25% equity shares in the total equity share capital of Gobind Sugar Mills Ltd. (GSML).

(iii) Promoter group shall continue to have management control of the Company and ZIL (Subsidiary Company) and hold majority ownership (atleast 51% of the total equity share capital without any encumbrance) in the Company including the ability to appoint majority Directors of the Board of the Company and ZIL.

(a) (i) Pursuant to the Composite Scheme of Arrangement and Amalgamation among iKisan Limited, Kakinada Fertilisers

Limited (KFL), Nagarjuna Fertilisers and Chemicals Limited (NFCL) and Nagarjuna Oil Refinery Limited (NORL), the Company had got one fully paid up equity share of Nagarjuna Oil Refinery Limited of Rs. 1/- each for every one equity share of Rs. 10/- held in NFCL and eleven equity shares in KFL of Rs. 1/- each for every ten equity shares of Rs. 10/- held

in NFCL. The name of KFL, has subsequent to merger on rights issue, changed to NFCL. The cost of shares held in Nagarjuna Fertilisers and Chemicals Limited had been allocated in the ratio of 76.65% and 23.35% to the shares of Nagarjuna Oil Refinery Limited and Nagarjuna Fertilisers and Chemicals Limited (formerly known as Kakinada Fertilisers Limited).

(ii) The Company's investment in Nagarjuna Oil Refinery Limited aggregated to Rs. 6,944.09 lacs (31st March, 2014:: Rs. 6,944.09 lacs) (based on cost allocation as above in (i)) and market value of this is Rs. 1,205.64 lacs (31st March, 2014:: Rs. 1,056.04 lacs) . Hence, there is a diminution in the value of investment by Rs. 5,738.45 lacs (31st March, 2014:: Rs. 5,888.05 lacs)

(iii) The shares of Nagarjuna Fertilisers and Chemicals Limited alloted to the Company, are not yet listed on Stock Exchange, pending receipt of persmission from Securities and Exchange Board of India.

(b) The Company has invested a sum of Rs. 5,103.34 lacs (31st March, 2014:: Rs. 4,650.01 lacs) in the equity shares of one of its subsidiary Company, Indian Furniture Products Limited. The Company has assured to provide continuous financial support. As per the latest audited financial statements of this subsidiary, it has accumulated losses which have resulted in erosion of substantial portion of its net worth.

This being long term investment, management is of the view that the diminution in the value of this investment is temporary in nature and hence no provision is required to be made thereagainst.

(c) (i) During the previous year ended 31st March, 2014, the Company has converted intercorporate deposit of Rs. 650.00 lacs

into 65 lac equity shares of Rs. 10 each given to its subsidiary Zuari Infraworld India Limited (formerly known as Adventz Infraworld India Limited).

(ii) During the previous year ended 31st March, 2014, the Company had converted intercorporate deposit of Rs. 1,000.00 lacs into 100 lacs equity shares of Rs. 10 each given to its subsidiary Indian Furniture Products Limited.

(iii) The Company has on December 18, 2014 terminated the Shareholders agreement with Zuari Cements Limited and has received Rs. 1641.27 lacs towards sale of equity shares held in Gulbarga Cement Limited from an affiliate of Zuari Cement Limited at book value.

(d) Pursuant to the Scheme of Amalgamation between Indian Furniture Products Limited (IFPL) and Style Spa Furniture Limited (SSFL), the Company has got fifteen fully paid equity shares of IFPL of Rs. 10/- each for every fourteen equity shares of Rs. 10/- held in SSFL.

(e) The Company has invested a sum of Rs. 275 lacs in the equity shares of Zuari Financial Services Limited acquired from Zuari Investment Limited ( a wholly owned subsidiary of the Company). Consequently, ZFSL become wholly owned subsidiary of the Company. Further, on February 11, 2015, ZFSL has alloted 1240000 equity shares of Rs. 10/- each at a consideration of Rs. 11/- per share through Right issues.

(a) The Company has entered into Memorandum of understanding with Zuari Agro Chemicals Limited (ZACL) for sale of 32267741 equity shares of Nagarjuna Fertilizers and Chemicals Limited (NFCL) , for a consideration that shall not be less than the market value of the shares as and when the share of NFCL are listed on the stock Exchange or book value. Pending listing of the shares of NFCL on the stock Exchanges, ZACL has paid an advance of Rs. 119.20 lacs to the Company, towards purchase of shares, which shall be adjusted thereafter from the total consideration amount at the time of the Sale / Transfer.

(b) The Company had entered into an agreement for sale of equity shares of Synthesis Energy System Inc. aggregating to Rs. 2,235.12 lacs to one of its subsidiary Company, Simon India Limited (SIL) at a price to be determined, which shall not be less than the book value. The Company has received an amount of Rs. 1,500 lacs as advance from SIL against sale of these shares.

4. Contingent liabilities

a) Contingent liabilities not provided for:

Rs. in lacs

Year Ended Year Ended Particulars 31st March, 31st March, 2015 2014

Demand Notices received from Income Tax Authorities*

i. Demand in respect of 254.47 - Assessment Year 2007-2008 for which an appeal is pending with CIT (Appeals)

ii. In respect of Assessment 1,718.77 - year 2011-12, certain adjustments have been proposed to be made to the transaction value by the tax authorities based on arm's length price of international transaction with associated enterprise and other adjustments. The Company is yet to receive final order. The amount of tax is excluding interest and penalty. The Company has filed application before Dispute Redressal Panel (DRP), which is pending.

iii. Demand in respect of 1,263.50 - Assessment year 2012-13 for which an appeal is pending with CIT (Appeals)

iv. Demand in respect of 565.78 565.78 Wealth Tax for Assessment Years 2006-07 to 2010-11 for which the Company has filed appeals with Commissioner of Wealth Tax (Appeals). The Company has deposited Rs. 282.89 lacs under protest.

* Based on discussions with the solicitors/ favorable decisions in similar cases, the management believes that the Company had a good chance of success in above mentioned cases and hence, no provision there against was considered necessary.

5. Segmental Information

Primary Segment

The Company has disclosed business segment as primary segment. The segments have been identified and reported taking into account the nature of products and services, the differing risks and returns, the organisation structure and the internal reporting system. The identified reportable segments for the year under review are Fertilisers and land development. Fertiliser segment includes trading of fertilisers and pesticides. Land development segment includes acquiring lands with the objective of granting rights to other parties to develop the land under joint development agreement.

Secondary Segment - Geographical Segment.

The Company operates in India and therefore caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

6. Related Party disclosures under Accounting Standard - 18

a) The list of related parties as identified by the management are as under:

i) Subsidiaries of the Company:

1. Indian Furniture Products Limited

2. Soundaryaa IFPL Interiors Limited (subsidiary of Indian Furniture Products Limited w.e.f 04/12/2014)

3. Simon India Limited

4. Zuari Management Services Limited

5. Zuari Infraworld India Limited

6. Zuari Infra Middle East Limited (subsidiary of Zuari Infraworld India Limited w.e.f 10/09/2014)

7. Globex Limited

8. Zuari Financial Services Limited (w.e.f 15/01/2015)(earlier subsidiary of Zuari Investments Limited)

9. Zuari Investments Limited

10. Zuari Insurance Brokers Limited - Subsidiary of Zuari Investments Limited

11. Zuari Commodity Trading Limited - Subsidiary of Zuari Investments Limited

12. Gobind Sugar Mills Limited (subsidiary of Zuari Investments Limited w.e.f 25/08/2014)

ii) Joint Ventures of the Company:

1. Zuari Indian Oiltanking Limited

2. Gulbarga Cement Limited (upto 12/01/2015)

3. MCA Phosphates Pte. Limited (upto 27/03/2014 and thereafter as associate)

iii) Associates of the Company*:

1. Zuari Agro Chemicals Limited

2. Zuari Agri Science Limited (formerly known as Zuari Seeds Limited) - Subsidiary of Zuari Agro Chemicals Limited

3. Zuari Fertlisers and Chemicals Limited - Subsidiary of Zuari Agro Chemicals Limited

4. Zuari Rotem Speciality Fertilizer Limited - Joint Venture of Zuari Agro Chemicals Limited

5. Zuari Maroc Phosphates Private Limited (formerly known as Zuari Maroc Phosphates Limited) - Joint Venture of Zuari Agro Chemicals Limited

6. Paradeep Phosphates Limited- Subsidiary of Zuari Maroc Phosphates Private Limited (formerly known as Zuari Maroc Phosphates Limited)

7. Gobind Sugar Mills Limited - Associate of Zuari Investments Limited (upto 24/08/2014 and thereafter as subsidiary)

8. New Eros Tradecom Limited-Associate of Zuari Investments Limited (subsidiary of Gobind Sugar Mills Limited upto 31/08/2014)

9. MCA Phosphates Pte. Limited (Joint Venture of Zuari Agro Chemicals Limited)

* The Company and its subsidiary Company hold more than 20% of the voting power of bodies corporate. The Company has been legally advised that it does not have any "significant influence" in the said bodies corporate as defined in Accounting Standard 18 "Related Party Disclosures" and accordingly has not considered the above investees as related party under AS-18 for the above disclosure.

iv) Enterprises having significant influence

1. Globalware Trading and Holdings Limited

v) Key Management Personnel of the Company:

1. Mrs. Jyotsna Poddar, Executive Director

2. Mr. H. S. Bawa, Executive Vice Chairman (upto 31/08/2013)

vi) Relatives of Key Management Personnel of the Company:

1. Mr. S. K. Poddar (Chairman), Husband of Mrs. Jyotsna Poddar.

2. Mr. Akshay Poddar, Son of Mrs. Jyotsna Poddar

3. Mrs. Veena Bawa, Wife of Mr. H. S. Bawa (upto 31/08/2013)

4. Mrs. Seema Behl, Daughter of Mr. H. S. Bawa (upto 31/08/2013)

5. Mrs. Meenakshi Bawa, Daughter of Mr. H. S. Bawa (upto 31/08/2013)

7. Employee benefits:

(A) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amounts recognized in the Balance Sheet.

8. a) The Company has obtained office premises, apartments and warehouses on operating leases for the period ranging from 0-2 years. In all the cases, the agreements are further renewable at the option of the Company. There is escalation clause in the respective lease agreements. All these leases are cancellable in nature. The total lease payments in respect of such leases recognized in the Statement of Profit & Loss for the year are Rs. 3.11 lacs(Previous year Rs. 4.88 lacs).

b) The Company has given buildings on operating lease for the period of three years. In all the cases, the agreements are further renewable at the option of the Company. All these leases are cancellable in nature. There is no escalation clause in the respective lease agreements. The total lease income received in respect of such leases recognized in the Statement of Profit & Loss for the year is Rs. 29.41 lacs (Previous year Rs. 29.41 lacs).

9. Under Section 133A of the Income Tax Act, 1961 the Income Tax department carried out a survey at the Company's premises in February, 2014. Pursuant to the discussions during the survey, the Company agreed to pay additional amount towards income tax demands, which has been paid during the last quarter of that year. The Company has subsequently filed an application with the Commissioner of Income Tax (Appeals) and has obtained a partial relief vide order dated April 22, 2014 issued by the Commissioner of Income Tax (Appeals). The short provision for income tax of Rs. 2,799.45 lacs and interest of Rs. 1,116.68 lacs in respect of earlier years, consequent to the additional tax claim, had been appropriately accounted for under exceptional items by the Company in the previous year.

10. Under instructions from the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 and in respect of shareholders who could not exercise their rights in view of disputes, mistakes, discrepancy in holdings, etc., 8,051(previous year 8,051) Rights' Equity Shares entitlements have been kept in abeyance pursuant to Section 126 of the Companies Act, 2013.

11. In light of Section 135 of Companies Act, 2013, the Company has incurred Rs. Nil during the current year on Corporate Social Responsibility (CSR) against gross amount required to be spent Rs. 81.09 lacs.

12. Previous year's figures have been regrouped / reclassified, where necessary, to confirm to this year's classification.


Mar 31, 2014

1. During the year, the Company has foated Voluntary Retrement Scheme for the employees working in the Administratve Ofce at Goa. Total 6 employees have opted for deferred payment under Voluntary Retrement Scheme. The total outgo will be Rs. 100.11 lacs, which has been fully charged as exceptonal item in the Statement of Proft and Loss as per accountng policy followed.

2. Under instructons from the Special Court (Trial of Ofences relatng to Transactons in Securites) Act, 1992 and in respect of shareholders who could not exercise their rights in view of disputes, mistakes, discrepancy in holdings, etc., 8,051(previous year 8,051) Rights'' Equity Shares enttlements have been kept in abeyance pursuant to Secton 206A of the Companies Act, 1956

3. Previous year''s fgures have been regrouped / reclassifed, where necessary, to confrm to this year''s classifcaton.


Mar 31, 2013

1. Corporate Informaton

The Company is a public Company domiciled in India and incorporated under the provisions of the Companies Act 1956. The Company is in the business of trading of pestcides. Last year upto 30th June, 2011 i.e. before demerger of the fertliser undertaking, the Company was in the business of manufacture of chemical fertlisers and also trading of complex fertlisers, water solubles and seeds. The Company caters to the demand of the Farmers all over the country.

2. Basis for preparaton

The fnancial statements of the Company have been prepared in accordance with generally accepted accountng principles in India (Indian GAAP). The Company has prepared these fnancial statements to comply in all material respects with the accountng standards notfed under the Companies (Accountng Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The fnancial statements have been prepared under on an accrual basis and under the historical cost conventon. The accountng policies have been consistently applied by the Company and are consistent with those used in previous year.

3. Demerger

a) Pursuant to the Scheme of Arrangement and Demerger (''the Scheme'') between Zuari Global Limited formerly known as Zuari Industries Limited and Zuari Agro Chemicals Limited (ZACL) formerly known as Zuari Holdings Limited approved by the Hon''ble High Court of Bombay at Goa on 2nd March 2012, all the Assets, Liabilites pertaining to Fertliser Undertaking as on 1st July, 2011 had been transferred to ZACL at their book values and accordingly Rs.68348.90 lacs being the surplus of Assets over the Liabilites of the Fertliser undertaking so Demerged, has been reduced from Capital redempton Reserve, Capital Reserve, General Reserve and Statement of Proft and Loss in terms of the Order of the Hon''ble High Court of Bombay at Goa. The said order was fled with Registrar of Companies on 21st March,2012.

b) The summary of the assets and liabilites transferred to ZACL as on July 1, 2011 is as below:

c) Pursuant to the Scheme, ZACL has during the current year issued 294,40,604 Equity Shares of Rs. 10/– each aggregatng to Rs. 2944.06 lacs to the existng shareholders of the Company, in the rato of 1 fully paid up Equity Share ofRs. 10/– each of ZACL for each share ofRs. 10/– each held in the Company.

d) The results of the Company for the previous year ended 31st March, 2012 were afer giving efect to the Scheme, whereby the Fertliser Undertaking has been demerged to ZACL with appointed date of 1st July, 2011 and accordingly its previous year''s fgures are not comparable with current year.

e) As per the Scheme, during the period between the Appointed date and the Efectve date, the Company deemed to have carried on the Fertliser Undertaking in "trust" on behalf of ZACL. Further all profts or incomes earned and losses and expenses incurred for Fertliser Undertaking, were for all purpose, be deemed to be profts or income or expenditure or losses of ZACL.

f) The ttle deeds for immovable propertes, licenses, agreements, loan documents etc. of the Company are in the process of being transfered in the name of ZACL.

4. Segmental Informaton

- Primary Segment

The Company is engaged in the trading of pestcides which, in the context of Accountng Standard 17 (Segmental Informaton) notfed by Companies (Accountng Standard) Rules, 2006 (as amended), is considered as the only business segment. Accordingly, no separate segmental informaton has been provided herein.

- Secondary Segment - Geographical Segment.

The Company operates in India and therefore caters to the needs of the domestc market. Therefore, there are no reportable geographical segments.

5. Related Party disclosures under Accountng Standard -18

a) The list of related partes as identfed by the management are as under:

i) Subsidiaries of the Company:

(1) Indian Furniture Products Limited

(2) Simon India Limited

(3) Zuari Management Services Limited

(4) Adventz Infraworld India Limited

(5) Globex Limited

(6) Style Spa Furniture Limited (w.e.f. 27/09/2011)

(7) Zuari Investments Limited

(8) Gulbarga Cement Limited (up to 08/09/2011 and thereafer as joint venture)

(9) Zuari Agro Chemicals Limited (formerly known as Zuari Holdings Limited) (up to 30/06/2011 and thereafer as an Associate)

(10) Zuari Fertlisers and Chemicals Limited (up to 30/06/2011 and thereafer as an Associate)

(11) Zuari Insurance Brokers Limited - Subsidiary of Zuari Investments Limited

(12) Zuari Commodity Trading Limited - Subsidiary of Zuari Investments Limited

(13) Zuari Financial Services Limited - Subsidiary of Zuari Investments Limited

(14) Zuari Seeds Limited (up to 30/06/2011 and thereafer as an Associate)

ii) Joint Ventures of the Company:

(1) Zuari Indian Oiltanking Limited

(2) Gulbarga Cement Limited (w.e.f. 09/09/2011)

(3) MCA Phosphates Pte. Limited (w.e.f. 22/12/2011)

(4) Zuari Maroc Phosphates Limited (up to 30/06/2011 and thereafer as Associate)

(5) Paradeep Phosphates Limited - Subsidiary of Zuari Maroc Phosphates Limited (up to 30/06/2011 and thereafer as Associate)

(6) Zuari Rotem Speciality Fertliser Limited (up to 30/06/2011 and thereafer as Associate)

iii) Associates of the Company*:

(1) Zuari Agro Chemicals Limited (Formerly known as Zuari Holdings Limited) (w.e.f. 01/07/2011)

(2) Zuari Seeds limited - Subsidiary of Zuari Agro Chemicals Limited

(3) Zuari Fertlisers and Chemicals Limited - Subsidiary of Zuari Agro Chemicals Limited

(4) Zuari Rotem Speciality Fertliser Limited -Joint Venture of Zuari Agro Chemicals Limited

(5) Zuari Maroc Phosphates Limited-Joint Venture of Zuari Agro Chemicals Limited

(6) Paradeep Phosphates Limited- Subsidiary of Joint Venture of Zuari Agro Chemicals Limited

(7) Gobind Sugar Mills Ltd. - Associate of Zuari Investments Limited (w.e.f. 21/08/2012)

(8) New Eros Tradecom Ltd.-Subsidiary of Gobind Sugar Mills Ltd.

* The Company and its subsidiary company hold more than 20% of the votng power of bodies corporate. The Company has been legally advised that it does not have any "signifcant infuence" in the said bodies corporate as defned in Accountng Standard 18 "Related Party Disclosures" and accordingly has not considered the above investees as related party under AS-18 for the above disclosure.

iv) Key Management Personnel of the Company:

1) Mr. H.S. Bawa, Executve Vice Chairman

2) Mrs. Jyotsna Poddar, Executve Director (w.e.f. 01/04/2012)

3) Mr. N. Suresh Krishnan, Managing Director (up to 31/03/2012)

v) Relatves of Key Management Personnel of the Company:

1) Mrs. Veena Bawa, Wife of Mr. H.S. Bawa

2) Mrs. Seema Behl, Daughter of Mr. H.S. Bawa

3) Mrs. Meenakshi Bawa, Daughter of Mr. H.S. Bawa

4) Mr. S. K. Poddar (Chairman), Husband of Mrs. Jyotsna Poddar.

6. Employee benefts:

(A) Gratuity

The Company has a defned beneft gratuity plan. Every employee who has completed fve years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net beneft expense recognized in the statement of proft and loss and the funded status and amounts recognized in the balance sheet.

Statement of Proft and Loss

Net employee beneft expense (recognized in Employee Cost) for the year ended 31st March, 2013

7. a) The Company has obtained ofce premises, apartments and warehouses on operatng leases for the period ranging from 0-2 years. In all the cases, the agreements are further renewable at the opton of the Company. There is escalaton clause in the respectve lease agreements. All these leases are cancellable in nature. The total lease payments in respect of such leases recognized in the statement of proft and loss for the year are Rs.1.67lacs (Previous year Rs.101.17 lacs).

b) The Company has given buildings on operatng lease for the period of three years. In all the cases, the agreements are further renewable atthe opton of the Company. All these leases are cancellable in nature. There is no escalaton clause in the respectve lease agreements. The total lease income received in respect of such leases recognized in the statement of Proft and Loss for the year is Rs. 29.41 lacs (Previous year Rs. Nil).

8. Under instructons from the Special Court (Trial of Ofences relatng to Transactons in Securites) Act, 1992 and in respect of shareholders who could not exercise their rights in view of disputes, mistakes, discrepancy in holdings, etc., 8,051 (previous year 8,051) Rights'' Equity Shares enttlements have been kept in abeyance pursuant to Secton 206Aof the Companies Act, 1956

9. Pending receipt of appeal efect orders for the assessment years 2003-04 to 2005-06, where appeal has been decided partly in favour of the Company by the Income Tax Appellate Tribunal, Interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund will be recognized in the year the appeal efect order is received from Income Tax Department

10. Previous year''s fgures have been regrouped / reclassifed, where necessary, to confrm to this year''s classifcaton.


Mar 31, 2012

1. Corporate Information

The Company is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is the manufacturer of chemical fertilizers. The Company is also into trading business of complex and water soluble fertilisers and seeds. The Company caters to the demand of the Farmers all over the country, through its "Jaikisaan" brand of Fertilisers.

2. Basis for preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statement to comply in all material respects with the Notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in previous year except for the change in accounting policy explained below.

a. Terms/Rights Attached to equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- each. Each share holder of equity shares is entitled to one vote per share. The Company declares and pay dividends in Indian rupees. The dividend proposed by Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

During the year 31st March 2012, the amount of per share dividend recognised for distribution to equity share holders was Rs. 2/ -, subject to approval of shareholders (31st March 2011:: Rs. 4.50/-)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

# OSI Limited had merged with Globalware Trading and Holdings Limited with effect from September 2011

As per records of the Company including its register of share holders/members and other declarations received from shareholders regarding beneficial interest, the above share holding represents both legal and beneficial ownership of shares.

The cash credit and buyers credit are secured by the first charge by way of hypothecation on the current assets, both present and future, wherever situated pertaining to the Company and the Company's present and future book debts outstanding, moneys receivable, claims, bills, contracts, engagements, rights and assets.

(a) Pursuant to the Composite Scheme of Arrangement and Amalgamation amoung iKisan Limited, Kakinada Fertilisers Limited (KFL), Nagarjuna Fertilisers and Chemicals Limited (NFCL) and Nagarjuna Oil Refinery Limited (NORL), the Company has got one fully paid up equity share of Nagarjuna Oil Refinary Limited of Re.1/- each for every one equity share of Rs. 10/- held in NFCL and eleven equity shares in KFL of Re.1/- each for every ten equity shares of Re.10/- held in NFCL. The name of KFL, subsequent to Merger, has changed to NFCL. The cost of shares held in Nagarjuna Fertilisers and Chemicals Limited has been allocated in the ratio of 76.65% and 23.35% to the shares of Nagarjuna Oil Refinery Limited and Nagarjuna Fertilisers and Chemicals Limited(formarly known as Kakinada Fertilisers Limited).

(b) (i) The Company's investment in Nagarjuna Oil Refinery Limited aggregated to Rs. 6944.09 lacs (based on cost allocation as above in (a)) and market value of this investment is Rs. 1,862.72 lacs. Hence, there is a diminution in the value of investment by Rs. 5,081.37 lacs.

(ii) The Company has an investment of Rs. 258.90 lacs in the equity shares of Lionel India Limited (LIL). As per the latest audited financial statements of LIL, it has accumulated losses which have resulted in erosion of a major portion of its net worth. LIL is continuously incurring losses.

*(iii) The Company has investment of Rs. 453.34 lacs in equity and preference share capital of its subsidiary "Style Spa Furniture Limited" (ceases to be associate of Zuari Industries Limited on 27th July, 2011). As per the latest audited financial statements, it has accumalated losses which have resulted in errosion of a substantial portion of its net worth.

(iv) The Company has an investment of Rs. 2,235.12 lacs in the equity shares of Sythesis Energy Systems Inc. and market value of this investment is Rs. 1671.11 lacs . Hence, there is a diminution in the value of this investment by Rs. 564.01 lacs .

These being long term investments, management is of the view that the diminution in the value of these investments is temporary in nature and hence no provision is required to be made thereagainst.

(c) The Company has sold the equity shares of Zuari Seeds Limited, Zuari Fertilisers and Chemicals Limited, Zuari Maroc Phosphates Limited and Zuari Rotem Speciality Fertilisers Limited to its then subsidiary, Zuari Holdings Limited, at cost in the month of May and June 2011.

The Company has till date recognised Rs. 634.08 lacs (Previous year Rs. Nil) as Minimum Alternate Tax (MAT) credit entitlement which represents that portion of the MAT Liability, the credit of which would be available based on the provision of Section 115 JAA of the Income tax Act, 1961. The management based on the future profitability projections and also profit earned during the year is confident that there would

(b) Interest accrued on employee's loan include amount due from officer of the Company Rs. 7.53 lacs (including Rs. 3.80 lacs from the Managing Director of the Company (31st March 2011:: Rs. 1.53 lacs), (31st March 2011 Rs. 5.67 lacs).

(a) Sale of finished and traded products include Government Subsidies. Subsidies include Rs. 118.72 lacs (31st March 2011:: Rs. 6,708.40 Lacs) in respect of earlier years, notified during the year

(b) Subsidy for Urea has been accounted based on Stage III parameters of the New Pricing Scheme and other adjustments as estimated in accordance with known policy parameters in this regard.

(c) Excise duty on sales amounting to Rs. 252.80 lacs (31st March, 2011:: Rs. 32.43 lacs) has been reduced from sales in statement of profit and loss and excise duty on increase / decrease in stock amounting to Rs. (8.44) lacs (31st March, 2011 Rs. 8.44 lacs) has been considered as (income)/expense in the financial statement.

3 Contingent liabilities not provided for :

Year ended Year ended Particulars 31st March, 2012 31st March, 2011 Rs.in lacs Rs.in lacs

A. Demand Notices received from Sales Tax authorities

i) Demand notice from Karnataka Sales Tax Authorities (VAT) for levying penalty on Professional tax for the years 2005-06 to 2008-09. The Company has filed appeal before Joint Commissioner of Commercial Taxes (Appeals), Bangalore, against the same. (The Company had deposited Rs.21.28 - 42.56 lacs against the same which was appearing in the schedule of Loans & Advances) (Transfered to Zuari Holdings Limited in term of the Scheme of Arrangement and Demerger. Refer note no. 50)

B.Demand raised by Excise Authorities on Service Tax matters *

Demand notice from Service Tax Authorities towards Service Tax under Goods Transport Agency Services for the period 2006-07 to 2010-11. - 94.10

* Based on discussions with the solicitors/ favourable decisions in similar cases/ legal opinions taken by the Company, the management believes that the Company has a good chance of success in above mentioned cases and hence, no provision there against was considered necessary.

4. Aggregate amount of guarantees issued by the Banks to various government authorities and others are secured by a charge created by way of hypothecation Rs. Nil (Previous year Rs. 15,534.46 lacs)

* Managerial Remuneration is paid within the limits of Schedule XIII of the Companies Act, 1956. As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the directors are not included above.

5. Segmental Information

§ Primary Segment

The Company is engaged in the manufacture, sale and trading of fertiliser, seeds and pesticides which, in the context of Accounting Standard 17 (Segmental Information) notified by Companies (Accounting Standard) Rules, 2006 (as amended), is considered as the only business segment. Accordingly, no separate segmental information has been provided herein.

§ Secondary Segment - Geographical Segment.

The Company operates in India and therefore caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

6. Related Party disclosures under Accounting Standard - 18

a) The list of related parties as identified by the management are as under:

i) Subsidiaries of the Company:

(1) Indian Furniture Products Limited

(2) Zuari Seeds Limited (up to 30/06/2011 and thereafter as Associate)

(3) Simon India Limited

(4) Zuari Management Services Limited

(5) Adventz Infraworld India Limited

(6) Gulbarga Cement Limited (up to 08/09/2011 and thereafter as Joint Venture)

(7) Zuari Holdings Limited -(up to 30/06/2011 and thereafter as Associate)

(8) Zuari Fertlisers & Chemicals Limited (up to 30/06/2011 and thereafter as Associate)

(9) Globex Limited

(10) Styles Spa Furniture Limited (w.e.f 27/09/2011)

(11) Zuari Investments Limited

(12) Zuari Insurance Brokers Limited - Subsidiary of Zuari Investments Limited

(13) Zuari Commodity Trading Limited - Subsidiary of Zuari Investments Limited

(14) Zuari Financial Services Limited - Subsidiary of Zuari Investments Limited

ii) Joint Ventures of the Company:

(1) Zuari Indian Oiltanking Limited

(2) Zuari Maroc Phosphates Limited (up to 27/06/2011 and thereafter as Associate)

(3) Gulbarga Cement Limited (w.e.f 09/09/2011)

(4) Paradeep Phosphates Limited - Subsidiary of Zuari Maroc Phosphates Limited (up to 30/06/2011 and thereafter as Associate)

(5) Zuari Rotem Speciality Fertiliser Limited (up to 30/06/2011 and thereafter as Associate)

(6) MCA Phosphates Pte Limited (w.e.f 22/12/2011)

iii) Associates of the Company*:

(1) Style Spa Furniture Limited

(An associate of a Zuari Investments Limited up to 27/09/2011 and thereafter as Subsidiary)

(2) Zuari Holdings Limited (w.e.f 01/07/2011)

(3) Zuari Seeds Limited - Subsidiary of Zuari Holdings Limited (w.e.f. 01/07/2011)

(4) Zuari Fertlisers & Chemicals Limited - Subsidiary of Zuari Holdings Limited (w.e.f. 01/07/2011)

(5) Zuari Rotem Speciality Fertiliser Limited -Joint Venture of Zuari Holdings Limited (w.e.f. 01/07/2011)

(6) Zuari Maroc Phosphates Limited- Joint Venture of Zuari Holdings Limited (w.e.f. 01/07/2011)

(7) Paradeep Phosphates Limited- Subsidiary of Joint Venture of Zuari Holdings Limited (w.e.f. 01/07/2011)

* The Company holds more than 20% of the voting power of a body corporate. The Company has been legally advised that it does not have any "significant influence" in the said body corporate as defined in Accounting Standard 18 "Related Party Disclosures" and accordingly has not considered the above investee as related party under AS-18 for the above disclosure.

iv) Key Management Personnel of the Company:

(1) Mr. H. S. Bawa, Executive Vice Chairman

(2) Mr. Suresh Krishnan, Managing Director (upto 31-03-2012)

v) Relatives of Key Management Personnel of the Company:

(1) Mrs. Veena Bawa

(2) Mrs. Seema Behl

(3) Mrs. Meenakshi Bawa

7. In the Extraordinary General Meeting of the Company held on April 30, 2012 the shareholders have approved the change in the name of the Company from Zuari Industries Limited to Zuari Global Limited.

The Company has made an application to the Registrar of Companies, Goa (ROC) and fresh certificate of incorporation consequent to change of name is awaited from ROC.

8. Employee benefits :

(A) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the Statement of Profit & Loss and the funded status and amounts recognized in the Balance Sheet.

B. Provident Fund

The Company has set up Provident Fund Trust, which was managed by the Company as per the Guideline Note on implementing AS- 15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. With the transfer of Fertliser undertaking to Zuari Holdings Limited, on demerger with effect from 1st July, 2011, the Trust is being managed by Zuari Holdings Limited and hence, no provision if any has been made in the books of the Company towards shortfall of provident fund liability on actuarial valuation, which is the opinion of the management would not be material.

9. Pending receipt of appeal effect orders for the assessment years 1998-99 to 2000-01 and 2002-03 to 2005-06, where appeal has been decided partly in favour of the Company by the Income Tax Appellate Tribunal, Interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund will be recognized in the year the appeal effect order is received from Income Tax Department.

10. The Company has obtained office premises, apartments and warehouses on operating leases for the period ranging from 2-6 years. In all the cases, the agreements are further renewable at the option of the Company. There is escalation clause in the respective lease agreements. All these leases are cancellable in nature. The total lease payments in respect of such leases recognized in the statement of profit and loss for the year are Rs. 101.17 lacs (Previous year Rs. 1037.48 lacs).

11. Department of Fertilizer, Government of India has issued an Office Memorandum dated July 11, 2011 where by subsidy rate applicable on closing stock of Finished Goods, Traded Goods and Raw Materials as on 31st March 2011 has been revised to subsidy rates applicable for the financial year 2010-11 as per the Nutrient Based subsidy policy. Accordingly the Company has adjusted its subsidy income for the current year by Rs. 4787.88 lacs, to give impact of above mopping up adjustment.

12. Under instructions from the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 and in respect of shareholders who could not exercise their rights in view of disputes, mistakes, discrepancy in holdings, etc., 10,564 (previous year 10,564) Rights' Equity Shares entitlements have been kept in abeyance pursuant to Section 206A of the Companies Act, 1956

13. Demerger

a) Pursuant to the Scheme of Arrangement and Demerger ( 'the Scheme') between Zuari Industries Limited and Zuari Holdings Limited approved by the Hon'ble High Court of Bombay at Goa on 2nd March 2012, all the Assets, Liabilities pertaining to Fertiliser Undertaking as on 1st July, 2011 have been transferred to Zuari Holdings Limited (ZHL) at their book values and accordingly Rs. 68348.90 lacs being the surplus of Assets over the Liabilities of the Fertiliser undertaking so Demerged, has been reduced from Capital Redemption Reserve, Capital Reserve, General Reserve and Statement of Profit and Loss in terms of the Order of the Hon'ble High Court of Bombay at Goa. The said reserve be treated as free reserve and may be restricted and not utilized for declaration of dividend by the Company. The said Order has been filed with Registrar of Companies on 21st March 2012.

c) Pursuant to the Scheme, Zuari Holdings Limited has since issued 294,40,604 Equity Shares of Rs. 10/- each aggregating to Rs. 2944.06 lacs to the existing shareholders of the Company, in the ratio of 1 fully paid up Equity Share of Rs. 10/- each of Zuari Holdings Limited for each share of Rs. 10/- each held in the Company.

d) The results of the Company for the current year ended 31st March, 2012 are after giving effect to the Scheme, whereby the Fertiliser Undertaking have been Demerged to Zuari Holdings Limited with appointed date of 1st July, 2011 and accordingly its previous year's figures are not comparable with current year.

e) As per the Scheme, during the period between the Appointed date and the Effective date, the Company deemed to have carried on the Fertiliser Undertaking in "trust" on behalf of Zuari Holdings Limited. Further all profits or incomes earned and losses and expenses incurred for Fertiliser Undertaking, shall for all purpose, be deemed to be profits or income or expenditure or losses of Zuari Holdings Limited.

f) The title deeds for immovable properties, licenses, agreements, loan documents etc. of the Company are in the process of being transfer in the name of Zuari Holdings Limited.

14. Till the year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this years' classification. Except accounting for dividend on investments in subsidiaries, the adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet. Previous year's figures have been regrouped/reclassified wherever necessary to confirm to this year's presentation.


Mar 31, 2011

1. Nature of Operations

The Company is the manufacturer of chemical fertilizers and pesticides. The Company is also into trading business of complex fertilizers, seeds and pesticides.

2 Contingent liabilities not provided for :

Rs. in lacs

Year ended Year ended

Particulars 31st March, 2011 31st March, 2010

A. Demand Notices received from Sales Tax authorities *

i) Demand notice from Karnataka Sales Tax Authorities (VAT) for levying penalty on Professional tax for the years 2005-06 to 2008-09. The Company has filed appeal before Joint Commissioner of Commercial 42.56 42.56 Taxes (Appeals), Bangalore, against the same. (The Company has deposited Rs. 21.28 lacs against the same which is appearing in the schedule of Loans & Advances).

ii) Demand notice from Maharashtra Sales Tax Authorities in respect of Sales tax Assessment for the year 2004-05. The Company has applied for – 130.61 cancellation of assessment order under the Bombay Sales Act 1959.

B. Demand raised by Excise Authorities on Service Tax matters *

Demand notice from Service Tax Authorities towards Service Tax under Goods Transport Agency Services for the period 2006-07 to 2009-10. 94.10 76.87 (The Company has deposited Rs. 10.00 lacs against the same which is appearing in the schedule of Loans & Advances).

* Based on discussions with the solicitors/ favourable decisions in similar cases/ legal opinions taken by the Company, the management believes that the Company has a good chance of success in above mentioned cases and hence, no provision thereagainst is considered necessary.

10. b) A sum of Rs. 1,241.55 lacs (previous year Rs. 896.76 lacs) on account of unamortized foreign exchange premium on outstanding forward exchange contracts is being carried forward to be charged to Profit and Loss Account of subsequent period.

3. In accordance with explanations below Para 10 of Notified Accounting Standard 9 – Revenue Recognition, excise duty on sales amounting to Rs. 32.43 lacs (Previous Year Rs. 17.63 lacs) has been reduced from sales in Profit & Loss Account and excise duty on variation of opening and closing stock of finished goods amounting to Rs. 8.45 lacs (Previous Year Nil) has been considered as expense in the financial statements.

4. The Board of Directors of the Company in its meeting held on April 14, 2011 have decided to withdraw the Scheme of Amalgamation of Gobind Sugar Mills Limited (GSM) with the Company, which was pending for sanction before Hon'ble High Court of Bombay at Goa. The withdrawal was in view of the change in the business / economic environment in relation to the Company's operation resulting from deregulation of the fertilizer sector and to focus on its core business.

5. Item 1 and 2 under head 'Secured Loans', Bank guarantees as included in Note No. 8 above, are secured by the first charge by way of hypothecation of the current assets, both present and future, wherever situated pertaining to the Company and the Company's present and future book debts outstanding, moneys receivable, claims, bills, contracts, engagements, rights and assets.

i. The loan to Indian Furniture Products Limited (IFPL) of Rs. 1,290.77 lacs. (Balance outstanding on 1st April, 2010 Rs. 430.26 lacs) has been repaid during the year.

ii. A loan of Rs.100.00 lacs (Balance outstanding on 31st March 2011 is Rs.44.44 lacs (Previous year Rs. 77.78 lacs) was given to IFPL on 22nd July, 2009 and it is repayable in 36 equal monthly installments w.e.f 1st August, 2009.

iii. The loan to IFPL of Rs 1,000.00 lacs renewed repayable on 3rd May 2011.

iv. The loan of Rs. 4,053.00 lacs to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) was given on 6th February 2009 .It is renewed on 6th August 2010 and is repayable at the end of 18 months. Maximum amount of loan outstanding during the year is Rs. 4,053.00 lacs.

v. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) of Rs. 420.00 lacs was given on 13th May 2009. It was renewed on 13th November, 2010 and it is repayable in 18 months.

vi. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) of Rs.25.00 lacs was given on 18th August, 2009. It was renewed on 18th February 2011 and it is repayable in 18 months.

vii. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) of Rs.10.00 lacs was given on 20th August, 2009 . It was renewed on 19th February 2011 and it is repayable in 18 months.

viii. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) of Rs.50.00 lacs was given on 10th September, 2009 .It was renewed on 10th March 2011 and it is repayable in 18 months.

ix. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited ) of Rs.115.00 lacs on 17th November, 2009 and it is repayable in 18 months.

x. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited ) of Rs.110.00 lacs on 27th November, 2009 and it is repayable in 18 months.

xi. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited ) of Rs.150.00 lacs on 9th February, 2010 and it is repayable in 18 months.

xii. The loan to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited ) of Rs.295.00 lacs on 31st March, 2010 and it is repayable in 18 months.

xiii. During the year, a loan of Rs.100.00 lacs (Balance outstanding on 31st March, 2011 is Rs.100.00 lacs) is given to Adventz Infraworld India Limited on 18th May 2010 and it is repayable in 18 months.

xiv. During the year, a loan of Rs.400.00 lacs (Balance outstanding on 31st March, 2011 is Rs.400.00 lacs) is given to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) on 21st June 2010 and it is repayable in 18 months.

xv. During the year, a loan of Rs.100.00 lacs (Balance outstanding on 31st March, 2011 is Rs.100.00 lacs) is given to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) on 23rd July 2010 and it is repayable in 18 months.

xvi. During the year, a loan of Rs.100.00 lacs (Balance outstanding on 31st March, 2011 is Rs.100.00 lacs) is given to Adventz Infraworld India Limited on 7th October 2010 and it is repayable in 18 months.

xvii. During the year, a loan of Rs.100.00 lacs (Balance outstanding on 31st March, 2011 is Rs.100.00 lacs) is given to Adventz Infraworld India Limited (formerly known as Zuari Developers Limited) on 28th October 2010 and it is repayable in 18 months.

xviii. During the year, a loan of Rs.150.00 lacs (Balance outstanding on 31st March, 2011 is Rs.150.00 lacs) is given to Adventz Infraworld India Limited on 23rd November 2010 and it is repayable in 18 months.

xix. During the year, a loan of Rs.150.00 lacs (Balance outstanding on 31st March, 2011 is Rs.150.00 lacs) is given to Adventz Infraworld India Limited on 10th December 2010 and it is repayable in 18 months.

xx. During the year, a loan of Rs.200.00 lacs (Balance outstanding on 31st March, 2011 is Rs.200.00 lacs) is given to Adventz Infraworld India Limited on 8th March 2011 and it is repayable in 18 months.

xxi. The loan to Gulbarga Cement Limited of Rs. 932.32 lacs paid on 1st January 2009 is renewed and is repayable on 30th September 2011.

xxii. The loan of Rs.25.00 lacs to Gulbarga Cement Limited paid on 22nd September, 2009 is renewed and it is repayable on 3rd November 2011.

xxiii. The loan of Rs.270.00 lacs to Gulbarga Cement Limited on 15th January, 2010 is renewed and it is repayable on 14th July 2011.

xxiv. The loan of Rs.200.00 lacs to Gulbarga Cement Limited on 31st March, 2010 is renewed and it is repayable on 30th September 2011.

xxv. During the year, a loan of Rs.100.00 lacs to Gulbarga Cement Limited on 23rd April 2010 is renewed and it is repayable on 22nd October 2011.

xxvi. During the year, a loan of Rs.860.00 lacs is given to Gulbarga Cement Limited on 26th July 2010 and it is repayable on 25th January 2012.

xxvii. During the year, a loan of Rs.700.00 lacs is given to Gulbarga Cement Limited on 16th September 2010 and it is repayable on 15th February 2012.

xxviii. During the year, a loan of Rs.300.00 lacs is given to Gulbarga Cement Limited on 20th September 2010 and it is repayable on 19th March 2012.

xxix. During the year, a loan of Rs.100.00 lacs is given to Gulbarga Cement Limited on 5th October 2010 and it is repayable on 4th April 2012

xxx. During the year, a loan of Rs.150.00 lacs given to Gulbarga Cement Limited on 20th October 2010 and it is repayable on 19th April 2012.

xxxi. During the year, a loan of Rs.1,000.00 lacs given to Gulbarga Cement Limited on 28th October 2010 and it is repayable on 27th April 2012.

xxxii. During the year, a loan of Rs.500.00 lacs given to Gulbarga Cement Limited on 26th November 2010 and it is repayable on 25th May 2012.

xxxiii. During the year, a loan of Rs.700.00 lacs given to Gulbarga Cement Limited on 22nd December 2010 and it is repayable on 19th June 2012.

xxxiv. During the year, a loan of Rs.450.00 lacs given to Gulbarga Cement Limited on 30th December 2010 and it is repayable on 29th June 2012.

xxxv. During the year, a loan of Rs.300.00 lacs given to Gulbarga Cement Limited on 21st January 2011 and it is repayable on 20th July 2012.

xxxvi. The loan of Rs.135.00 lacs given to Zuari Investments Limited on 10th February, 2010 and it was repaid on 6th September 2010.

xxxvii. During the year, a loan of Rs.200.00 lacs is given to Zuari Investments Limited on 1st June 2010 and repaid on 6th September 2010.

xxxviii. During the year, a loan of Rs.100.00 lacs is given to Zuari Investments Limited on 1st July 2010 and repaid on 30th August 2010.

xxxix. During the year, a loan of Rs.1,000.00 lacs given to Zuari Investments Limited on 16th September 2010 and it is repayable on 30th September 2011.

xi. During the year, a loan of Rs.4,200.00 lacs is given to Zuari Fertilisers & Chemicals Limited on 15th June 2010 and it is repayable on 15th June 2011.

xii. Figures in brackets denote previous year figures.

6. Segmental Information

§ Primary Segment

The Company is engaged in the manufacture, sale and trading of fertilizers, seeds and pesticides which, in the context of Accounting Standard 17 (Segmental Information) issued by the Institute of Chartered Accountants of India, is considered as the only business segment. Accordingly, no separate segmental information has been provided herein.

§ Secondary Segment – Geographical Segment.

The Company primarily operates in India and therefore mainly caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

7. Related Party disclosures under Accounting Standard – 18

a) The list of related parties as identified by the management are as under:

i) Subsidiaries of the Company:

(1) Indian Furniture Products Limited

(2) Zuari Seeds Limited

(3) Simon India Limited

(4) Zuari Management Services Limited ( formerly known as Zuari Infrastructure & Developers Limited)

(5) Adventz Infraworld India Limited (formerly known as Zuari Developers Limited)

(6) Gulbarga Cement Limited

(7) Zuari Holdings Limited – 100% Subsidiary-with effect from 10th March, 2011 (earlier subsidiary of Zuari Investments Limited)

(8) Zuari Fertlizers & Chemicals Limited

(9) Globex Limited

(10) Zuari Investments Limited

(11) Zuari Chambal Insurance Brokers Limited – Subsidiary of Zuari Investments Limited

(12) Zuari Commodity Trading limited – Subsidiary of Zuari Investments Limited

(13) Zuari Financial Services Limited – Subsidiary of Zuari Investments Limited

ii) Joint Ventures of the Company:

(1) Zuari Indian Oiltanking Limited

(2) Zuari Maroc Phosphates Limited

(3) Paradeep Phosphates Ltd – Subsidiary of Zuari Maroc Phosphates Limited

(4) Zuari Rotem Speciality Fertilisers Limited

iii) Associates of the Company*:

(1) Style Spa Furniture Limited (An associate of a subsidiary)

* The Company holds more than 20% of the voting power of a body corporate. The Company has been legally advised that it does not have any "significant influence" in the said body corporate as defined in Accounting Standard 18 "Related Party Disclosures" and accordingly has not considered the above investee as related party under AS-18 for the above disclosure.

iv) Key Management Personnel of the Company:

(1) Mr. H.S. Bawa, Executive Vice Chairman

(2) Mr. Suresh Krishnan, Managing Director (with effect from 1st February, 2011)

v) Relatives of Key Management Personnel of the Company:

(1) Mrs. Veena Bawa

(2) Mrs. Seema Behl

(3) Mrs. Meenakshi Bawa

8. Employee benefits :

(A) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarize the components of net benefit expense recognized in the Profit & Loss account and the funded status and amounts recognized in the Balance Sheet.

a) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

b) The current year being the fifth year of adoption of AS–15 (Revised) by the Company, disclosures as required by Para 120 (n) (i) of Accounting Standard 15 (Revised) have been furnished only from the year of its adoption.

(b) Pursuant to the Scheme of Arrangement between Texmaco Limited and Texmaco Rail and Engineering Limited (TREL) the Company has got one equity share of Re.1/ – each fully paid in TREL for every equity share held in Texmaco Limited. The cost of shares held in Texmaco Limited has been allocated in the ratio of 41.40% and 58.60% to the shares of Texmaco Limited and TREL respectively in accordance with the Scheme.

(b) In terms of guidelines issued by Government of India, Ministry of Chemicals & Fertilizers (MCF) dated 31st March, 2011, the Company has sold 50% of its holding in Fertilizer Companies Government of India Special Bond at price determined by Reserve Bank of India (RBI) resulting in a loss of Rs 3,137.06 lacs (including Rs 2,707.69 lacs charged to Profit & Loss Account in earlier years). As per the guidelines the Government of India will buyback the remaining bonds held by the company through RBI in 2011–12 at a price to be determined by Government of India. As per the above guidelines, a part of the loss incurred by the Company would be compensated by Government of India. However the mechanism for determination of such compensation has not been notified by MCF .On determination of the compensation applicable the same will be accounted for in terms of accounting policies and accounting standards followed by the company.

(c) Provision for diminution in value of Fertilizer Companies' Government of India Special bonds has been done on the basis of quotation received from stock brokers for the closing stocks of respective GoI Bonds.

9. Interest accrued on loans shown under Other Current Assets includes an amount of Rs. 529.30 lacs (previous year Nil) receivable from subsidiaries.

10. Loan to employees and interest accrued on employee's loan include amount due from officer of the Company Rs. 40.01 lacs (including Rs. 37.20 lacs from a Managing Director of the Company being loan given before appointed as Managing Director) (previous year Rs.4.49 lacs) and Rs.5.67 lacs (including Rs. 1.53 lacs from a Managing Director of the Company) (previous year Rs.3.90 lacs) respectively. Maximum amount outstanding at any time during the year is Rs. 41.09 lacs (including Rs. 38.00 lacs from a Managing Director of the Company) (previous year Rs.6.17 lacs) and Rs.5.67 lacs (including Rs. 1.53 lacs from a Managing Director of the Company) (previous year Rs. 3.65 lacs) in respect of loan and interest accrued respectively.

11. (a) Stage III of the New Pricing Scheme (NPS) for Urea was in operation from 1st October, 2006 to 31st March, 2010. As per this scheme, all naptha based units (including the company) were required to take steps for conversion to natural gas/liquid natural gas by 31st March, 2010. The Company has initiated necessary steps for conversion. Government of India vide notification dated 17th March, 2010 has extended till further orders the provisions of Stage III of NPS.

(b) Subsidy for Urea has been accounted based on Stage III parameters of the New Pricing Scheme and other adjustments as estimated in accordance with known policy parameters in this regard.

(c) Government subsidies include Rs. 6,708.40 lacs (previous year of Rs. 3,396.89 lacs) in respect of earlier years, notified during the year.

12. The Revenue Department of the Government of Goa has issued a notification under sub-section (1) of Section 4 of the Land Acquisition Act, 1984 on 5th February, 2007 and further notification on 19th April, 2007 proposing to acquire 1,59,700 sq. mts. of the land belonging to the Company for public purpose. The Company has filed an appeal with the High Court of Bombay at Goa against the notification. The High Court has asked status quo to be maintained on the land acquisition proceedings.

13. The agreement with Zuari Maroc Phosphates Limited (ZMPL) for providing management services to Paradeep Phosphates Limited, which got suspended on 1st October, 2005, continues to remain so and consequently no management services fees has been accounted for during the year.

14. Investments

i) The Company has invested a sum of Rs.6,583.05 lacs in the equity shares of Nagarjuna Fertilizers and Chemicals Limited (NFCL). The market value of these investments at the year end is Rs.6,032.23 lacs. Hence, there is a diminution in the value of this investment by Rs.550.82 lacs.

ii) The Company has an investment of Rs. 258.90 lacs in the equity shares of Lionel India Limited (LIL). As per the latest audited financial statements of LIL, it has accumulated losses which have resulted in erosion of a major portion of its net worth. LIL is continuously incurring losses.

iii) The Company has invested a sum of Rs. 1,417.60 lacs in the equity shares of one of the 100% subsidiary company. Further, the Company has receivables of Rs. 1,611.26 lacs by way of trade advances. The Company has also given corporate guarantees in respect of facilities given by the banks to the subsidiary company aggregating to Rs. 2,205 lacs and has also promised to provide continuous financial support. As per the latest audited financial statements of this subsidiary, accumulated losses of this subsidiary has resulted in erosion of its net worth.

These being long term investments and also in view of the projected profitable operations of the above companies, management is of the view that the diminution in the value of these investments is temporary in nature and hence no provision (other than the provision accounted for in an earlier year in respect of a subsidiary) is required to be made thereagainst.

15. Pending receipt of appeal effect orders for the assessment years 1998-99 to 2000-01 and 2002-03 to 2005-06, where appeal has been decided partly in favour of the Company by the Income Tax Appellate Tribunal, Interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund will be recognized in the year the appeal effect order is received from Income Tax Department.

16. The Company has obtained office premises, apartments and warehouses on operating leases for the period ranging from 2-6 years. In all the cases, the agreements are further renewable at the option of the Company. There is escalation clause in the respective lease agreements. All these leases are cancellable in nature. The total lease payments in respect of such leases recognized in the Profit and Loss account for the year are Rs. 455.48 lacs (previous year Rs. 346.67 lacs).

17. Under instructions from the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 and in respect of shareholders who could not exercise their rights in view of disputes, mistakes, discrepancy in holdings, etc., 10,564 (previous year 10,564) Rights' Equity Shares entitlements have been kept in abeyance pursuant to Section 206A of the Companies Act, 1956

18. Previous year's figures have been regrouped / recasted, wherever necessary to confirm to this year's classification.


Mar 31, 2010

1. Nature of Operations

The Company is the manufacturer of chemical fertilizers and pesticides. The Company is also into trading business of complex fertilizers, seeds and pesticides.

2 Contingent liabilities not provided for : Rs. in lacs

Year ended Year ended

Particulars 31st March, 31st March, 2010 2009



A. Demand Notices received from Sales Tax authorities *

i) Demand notice from Karnataka Sales Tax Authorities (VAT) for levying penalty on Professional tax for the years 2005-06 to 2008-09. The Company has filed appeal before Joint Commissioner of Commercial Taxes (Appeals), Bangalore, against the same. (The Company has deposited Rs.21.28 lacs against the same which is appearing in the schedule of Loans & Advances) 42.56 -

ii) Demand notice from Maharashtra Sales Tax Authorities in respect of Sales tax Assessment for the year 2004-05. The Company has applied for cancellation of assessment order under the Bombay Sales Tax Act 1959. 130.61 -

B. Demand raised by Excise Authorities on Service Tax matters *

Demand notice from Service Tax Authorities towards Service Tax under Goods Transport Agency Services for the period 2006-07 to 2008-09. 76.87 -

C. Taxation matters*.

Penalty u/s 271 ( 1 )(C) of the Income Tax Act, 1961 pertaining to Menalty on capital gain on transfer of Cement undertaking : Income Tax Appellate Tribunal has passed order in favour of the Company during the year - 1,426.16

3. The Board of Directors of the Company approved the merger of Gobind Sugar Mills Limited (GSML) in the meeting held on February 22, 201 0. Pursuant to this approval, the Company has on March 26, 201 0 filed with the Honourable High Court of Bombay at Goa, o scheme of amalgamation entailing merger of GSML with the Company. And GSML has also filed similar scheme of Amalgamation before the Honourable High Court of Calcutta. As per the said scheme, with effect from the Appointed Date i.e. April 01, 2009, the undertaking of GSML, pursuant to the provisions contained in Sections 391 to 394 and other applicable provisions of the Companies Act 1956, shall stand transferred to and vested in the Company on a going concern basis without any further act, deed or matter. However, the Amalgamation shall be effective from the date of filing of the certified copy of the Order of the Honourable High Court of Goa and Calcutta with Registrar of Companies, Goa. Pending the approval of the said High Courts, the effect of the amalgamation has not been given.

4. i) Item 1 and 2 under head Secured Loans are secured by the first charge by way of hypothecation of the current assets, both present and future, wherever situated pertaining to the Company and the Companys present and future book debts outstanding, moneys receivable, claims, bills, contracts, engagements, rights and assets.

ii) Item 3 under head Secured Loans was secured by way of pledge of 6.65% Fertilizer Companies Government of India Special Bonds 2023 of Rs.Nil (Previous year Rs. 17,250.00 lacs)

iii) Credit obtained from Indian Oil Corporation Limited against supply of Naphtha to the extent of Rs 248.23 lacs (previous year Rs. 10,716.04 lacs) (balance included under Current Liabilities) is secured by third charge on stocks of Raw materials, Finished goods, stock in trade, stores and spares limited to Rs. 10,000.00 lacs.

Notes :

a) The loan to Indian Furniture Products Limited (IFPL) of Rs. 1,290.77 lacs (Balance outstanding on 31st March, 2010 Rs. 430.26 lacs) is repayable in 36 equal monthly installments w.e.f. 1st April, 2008.

b) The loan to IFPL of Rs 1,000.00 lacs is renewed repayable on 3rd August, 2010.

c) During the year, a loan of Rs.100.00 lacs (Balance outstanding on 31st March, 2010 - Rs.77.78 lacs) is given to IFPL on 22™ July, 2009 and it is repayable in 36 equal monthly installments w.e.f 1st August, 2009.

d) The loan of Rs. 4,288.00 lacs to Zuari Developers Limited (in which one of the directors of the Company is interested as director) is repayable at the end of 18 months from 6th February, 2009. Maximum amount of loan outstanding during the year is Rs. 4,288.00 lacs.

e) During the year, a loan of Rs.420.00 lacs (Balance outstanding on 31st March, 2010 Rs.420.00 lacs) is given to Zuari Developers Limited on 13th May, 2009 and it is repayable in 18 months.

f) During the year, a loan of Rs.25.00 lacs (Balance outstanding on 31st March, 2010 - Rs.25.00 lacs) is given to Zuari Developers Limited on 18th August, 2009 and it is repayable in 18,months.

g) During the year, a loan of Rs. 10.00 lacs (Balance outstanding on 31st March, 2010 - Rs. 10.00 lacs) is given to Zuari Developers Limited on 20tn August, 2009 and it is repayable in 18 months.

h) During the year, a loan of Rs.50.00 lacs (Balance outstanding on 31st March, 2010 - Rs.50.00 Iocs) is given to Zuari Developers Limited on 10th September, 2009 and it is repayable in 18 months.

i) During the year, a loan of Rs.l 15.00 lacs (Balance outstanding on 31st March, 2010 Rs.l 15.00 lacs) is given to Zuari Developers Limited on 1 7" November, 2009 and it is repayable in 1 8 months.

i) During the year, a loan of Rs.l 10.00 lacs (Balance outstanding on 31st March, 2010 - Rs.l 10.00 lacs) is given to Zuari Developers Limited on 27" November, 2009 and it is repayable in 18 months.

k) During the year, a loan of Rs.l 50.00 lacs (Balance outstanding on 31st March, 2010 - Rs.l 50.00 lacs) is given to Zuari Developers Limited on 9" February, 2010 and it is repayable in 18 months.

lI) During the year, a loan of Rs.295.00 lacs (Balance outstanding on 31s1 March, 2010 Rs.295.00 lacs) is given to Zuari Developers Limited on 31st March, 2010 and it is repayable in 18 months.

m) The loan to Gulbarga Cements Limited of Rs. 932.32 lacs was renewed on Ist January, 2009 and is repayable in 18 months.

n) During the year, a loan of Rs.25.00 lacs (Balance outstanding on 31st March, 2010 - Rs.10.00 lacs) is given to Gulbarga Cements Limited on 22™ September, 2009 and it is repayable in 18 months.

o) During the year, a loan of Rs.270.00 lacs (Balance outstanding on 31st March, 2010 - Rs.270.00 lacs) is given to Gulbarga Cements Limited on 1 5th January, 2010 and it is repayable in 18 months.

p) During the year, a loan of Rs.200.00 lacs (Balance outstanding on 31st March, 2010 Rs.200.00 lacs) is given to Gulbarga Cements Limited on 31st March, 2010 and it is repayable in 18 months.

q) During/ the year, a loan of Rs.100.00 lacs (Balance outstanding on 31st March, 2010 Rs.Nil) is given to Zuari Investments Limited on 3rd November, 2009 and it is repayable in 6 months. This loan was repaid prior to its original. maturjty date on 26th February, 2010.

r) Dyrtng the year, a loan of Rs.200.00 lacs (Balance outstanding on 31st March, 2010 Rs.Nil) is given to Zuari Investments Limited on 5th November, 2009 and it is repayable in 6 months. This loan was repaid prior to its original maturity date on 26" February, 2010.

s) During the year, a loan of Rs.200.00 lacs (Balance outstanding on 31st March, 2010 Rs.Nil) is given to Zuari Investments Limited on 27" November, 2009 and it is repayable in 6 months. This loan was repaid prior to its original moturity date on 26th February, 2010.

t) During the year, a loan of Rs.165.00 lacs (Balance outstanding on 31st March, 2010 Rs.Nil) is given lo Zuari Investments Limited on 10th February, 2010 and it is repayable in 50 days. This loan was repaid on 31st March, 2010.

u) During the year, a loan of Rs.135.00 lacs (Balance outstanding on 31st March, 2010 - Rs.135.00 lacs) is given to Zuari Investments Limited on 10" February, 2010 and it is repayable on 30" June, 2010.

v) The Company holds more than 20% of the voting power of a body corporate. The Company has been legally advised that it does not have any "significant influence" in the said body corporate as defined in Accounting Standard 1 8 "Related Party Disclosures" and accordingly has not considered the above investee as related party under AS-18 and associate for the above disclosure.

w) Figures in brackets denote previous year figures.

5. Segmental Information

* Primary Segment

The Company is engaged in the manufacture, sale and trading of fertilizers, seeds and pesticides which, in the context of Accounting Standard 17 (Segmental Information) issued by the Institute of Chartered Accountants of India, is considered as the only business segment. Accordingly, no separate segmental information has been provided herein.

* Secondary Segment - Geographical Segment.

- The Company primarily operates in India and therefore mainly caters to the needs of the domestic market. Therefore, there are no reportable geographical segments.

6. Related Party disclosures under Accounting Standard - 18

a) The list of related parties as identified by the management are as under:

i) Subsidiaries of the Company:

(1) Indian Furniture Products Limited

(2) Zuari Seeds Limited

(3) Simon India Limited

(4) Zuari Infrastructure & Developers Limited

(5) Zuari Developers Limited

(6) Gulborga Cement Limited

(7) Zuari Investments Limited

(8) Zuari Insurance Brokers Limited - Subsidiary of Zuari Investments Limited

(9) Zuari Commodity Trading Limited - Subsidiary of Zuari Investments Limited

(10) Zuari Financial Services Limited - Subsidiary of Zuari Investments Limited

(11) Zuari Holdings Limited - Subsidiary of Zuari Investments Limited (with effect from 10th September,2009)

(12) Zuari Fertlizers & Chemicals Limited (with effect from 29" January, 2010)

(13) Globex Limited (with effect from 09" August, 2009)

ii) Joint Ventures of the Company:

(1) Zuari Indian Oiltanking Limited

(2) Zuari Maroc Phosphates Limited

(3) Paradeep Phosphates Ltd - Subsidiary of Zuari Maroc Phosphates Limited

(4) Zuari Rotem Speciality Fertilisers Limited

iii) Associates of the Company*:

(1) Style Spa Furniture Limited (an associate of a subsidiary)

(2) Zuari Investments Limited (upto 301 March, 2009)

(3) Zuari Insurance Brokers Limited (a subsidiary of Zuari Investments Limited) (upto 30th March, 2009)

(4) Zuari Commodity Trading Limited (a subsidiary of Zuari Investments Limited) (upto 30" March, 2009)

(5) Zuari Financial Services Limited (a subsidiary of Zuari Investments Limited) (upto 30" March, 2009) * Refer footnote (v) in Note no. 1 3 above.

iv) Key Management Personnel of the Company: (1) Mr. H.S. Bawa, Managing Director

v; Relatives of Key Management Personnel of the Company: / (1) Mrs. Veena Bawa

(2) Mrs. Seema Behl

(3) Mrs. Meenakshi Bawa

7. Interest accrued on loans shown under Other Current Assets includes an amount of Rs. Nil (previous year Rs. 296.75 lacs) receivable from subsidiaries.

8. Loan to employees and interest accrued on employees loan include amount due from officer of the Company Rs.4.49 lacs (previous year Rs.6.1 7 lacs) and Rs.3.90 lacs (previous year Rs.3.65 lacs) respectively. Maximum amount outstanding at any time during the year is Rs.6.1 7 lacs (previous year Rs.7.85 lacs) and Rs.3.65 lacs (previous year 3.09 lacs) in respect of loan and interest accrued respectively.

9. (a) Stage III of the New Pricing Scheme (NPS) for urea was in operation from 1sl October, 2006 to 31s! March, 2010. As per this scheme, all naptha based units (including the company) were required to take steps for conversion to natural gas/ liquid natural gas by 31st March, 2010. The Company has initiated necessary steps for conversion. Government of India vide notification dated 1 7lh March 2010 has extended till further orders the provisions of Stage III of NPS.

(b) Subsidy for Urea has been accounted based on Stage III parameters of the New Pricing Scheme and other adjustments as estimated in accordance with known policy parameters in this regard.

(c) Pending announcement of final rates of concession for complex fertilizers for the month of July 2009 to March 2010, the concession for this period has been estimated based on the known policy parameters in this regard and the difference between the notified base rates and estimated rates of concession amounting to Rs. 15,873.97 lacs has been accounted as payable to Government of India.

(d) Government subsidies include Rs. 3,396.89 lacs (previous year of Rs. 1,1 26.84 lacs) in respect of earlier years, notified during the year.

10. The Revenue Department of the Government of Goa has issued a notification under sub-section (1) of Section 4 of the Land Acquisition Act, 1894 on 5lh February, 2007 and further notification on 19th April, 2007 proposing to acquire 1,59,700 sq. mts. of the land belonging to Company for public purpose. The Company has filed an appeal with the High Court of Bombay at Goa against the notification. The High Court has asked status quo to be maintained on the land acquisition proceedings.

11. The agreement with Zuari Maroc Phosphates Limited (ZMPL) for providing management services to Paradeep Phosphates Limited, which got suspended on lsl October, 2005, continues to remain so and consequently no management service fee has been accounted for during the year.

12. Investments

i) The Company has invested a sum of Rs. 1,428.23 lacs in the equity shares of Nagarjuna Fertilizers and Chemicals Limited (NFCL). The market value of these investments at the year end is Rs.l ,31 1.91 lacs. Hence, there is a diminution in the value of this investment by Rs.l 16.32 lacs.

ii) The Company has an investment of Rs. 258.90 lacs in the equity shares of Lionel India Limited (LIL). As per the latest audited financial statements of LIL, it has accumulated losses which have resulted in erosion of a major portion of its net worth. LIL has incurred losses in the last three financial years.

iii) The Company has invested a sum of Rs. 2,856.69 lacs in the equity shares of some of the 1 00% subsidiaries. Further, the Company has given a trade advance of Rs.939.39 lacs to one of the subsidiary and loan of Rs.6,890.32 lacs to two of the subsidiaries. As per the latest audited financial statements of these subsidiaries, accumulated losses of these subsidiaries have resulted in erosion of their net worth.

These being long term investments and also in view of the projected profitable operations of the above companies, management is of the view that the diminution in the value of these investments is temporary in nature and hence no provision (other than the provision accounted for in an earlier year in respect of a subsidiary) is required to be made thereagainst.

13. Under instructions from the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 and in respect of shareholders who could not exercise their rights in view of disputes, mistakes, discrepancy in holdings, etc., 10,564 (previous year 10,564) Rights Equity Shares entitlements have been kept in abeyance pursuant to Section 206A of the Companies Act, 1956.

14. Previous years figures have been regrouped / recasted, wherever necessary to confirm to this years classification.

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