முகப்பு  »  நிறுவனம்  »  Dwarikesh Sugar  »  மேற்கோள்  »  கணக்கு றிப்புகள்
நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Dwarikesh Sugar Industries Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2023

D. Rights & restrictions attached to equity shares:

The Company has one class of equity shares having a face value of H 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, If any is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

E. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.-Nil

F. The Board of Directors of the Company in its meeting held on March 30, 2023 declared interim dividend of 200% (i.e. H 2/- per share on face value of H 1/- per equity share for the F.Y. 2022-23 and the same is also proposed to be final dividend as resolved in the Board of directors meeting held on April 27, 2023. (in the F.Y. 2021-22, the Company paid total dividend of 325% i.e. H 3.25/- per share on face value of H 1 per equity share which comprised of interim & final dividend of H 2 per share for F.Y. 2021-22 and final dividend of H 1.25 per share for F.Y. 2020-21)

The amount shown above represents the best possible estimates arrived on the basis of available information. The uncertainties and timing of the cash flows are dependent on the outcome of the different legal process which have been invoked by the company or the claimants as the case may be and therefore it cannot be estimated accurately. The Company does not expect any reimbursement in respect of above contingent liabilities.

42. Allahabad High Court in the case of PIL Rashtriya Kisan Mazdoor Sangathan VS State of U.P. passed a final order on March 09, 2017 directing the Cane Commissioner to decide afresh the issue as to whether the Sugar Mills are entitled for waiver of interest on the delayed payment of the price of sugarcane for the seasons 2012-13, 2013-14 and 2014-15 under the provisions of Section 17(3) of the U.P. Sugarcane (Regulations of Supply and Purchase) Act, 1953 (in short ‘the Act’). Thereafter in an CAPL (contempt application) No. 2815/2018 titled ‘V M. Singh versus Shri Sanjay Bhoosereddy’ in the Hon’ble Allahabad High Court and its follow-on proceedings, the Cane Commissioner is understood to have filed an affidavit specifying interest rates on delayed cane price payments but no such order of the Cane Commissioner has been served on the Company or industry association. Subsequently State Government has filed modification application before and Mr. V M. Singh has also filed SLP with the Supreme Court in this matter and pending disposal of the same the High Court has deferred the hearing of contempt petition. The matter is still pending before the Supreme Court for adjudication. Based on the legal review of the facts of this case, possibility of liability crystalizing is remote and hence no provision is considered necessary.

43. Cane societies were in dispute with the State Government of Uttar Pradesh with regard to retrospective partial waiver of society commission payable by the sugar mills for the crushing seasons 2012-13,2014-15 and 2015-16 as a part of its relief package to sugar industry . Hon’ble Allahabad High Court held that concessional rate of society commission fixed by the U.P Government cannot have retrospective operations and shall be applicable prospectively from the date of the notification. Against the said judgment, the U.P. Sugar Mill Association filed SLP ( C ) No 032225-032227/2018 . Hon’ble Supreme Court, vide order dated 03.12.2018, issued notice and directed that no coercive steps shall be taken against the petitioners. The matter is pending for further adjudication. Based on the legal advice, no liability is likely to crystalize on the Company in this matter.

44. The Collector and Tax Assessing authorities has raised demands for the arrears of purchase tax for the sugar season 2016-17 aggregating to Rs 88.06 Lakhs along with penalty of Rs 1.05 lakhs in respect of purchase tax due on sugar stock held by mill as on 30.06.2017, the date at which the purchase tax has been subsumed in the Goods and Service Tax. The levy of purchase tax on sugar stock held by the mills as on 30.06.2017 has been challenged by U.P sugar Association before Lucknow Bench of Hon’ble Allahabad High Court in writ petition No 27169 of 2018 and the same is still pending for adjudication. However, the Hon’ble High Court has advised the authorities to desist from adopting any coercive measure till the final decision of the case. Based on the legal review of the facts of the case, the management estimates that the probabilities of crystallization of aforesaid demand is remote and therefore no provision for the same is required as on date.

45. Leases

Following are the changes in the carrying value of other right of use assets for the year ended March 31, 2023:

The aggregate depreciation expense on ROU (Right-of-use) assets is included under depreciation and amortization expense in the statement of Profit and Loss.

Term Loans and cash credit from banks aggregating to H Nil (previous year - H 46,278.94 Lakhs) are personally guaranteed by the Executive Chairman of the company out of which the company has given Counter guarantees of H Nil (previous year - H 35,856.80 Lakhs ) to him to secure all these personal guarantees.

Note: Figures in the brackets are for the previous year.

Difference between the value as per books of accounts and as per quarterly statement submitted to lenders:

The Company has been sanctioned and availed working capital finance of more than five crores during the year from consortium lenders against primary security of current assets. As per terms and conditions, the drawing power for utilization of the sanctioned working capital facilities is determined based on the value of stock reported to the banks on weekly basis. Accordingly, the date of stock statements submitted to the bank during the last week of each quarter during the year may not coincide with the last date of respective quarter end and hence, reporting of the difference in the value of stocks as reported in weekly stock statement with the value appearing in the books of account is practically not possible as in the books the inventory of finished goods and by products are valued only at quarter end for the purpose of quarterly financial results. The management confirms that there are no material differences between the value of store and spares, and the quantity of stocks of sugar, molasses and ethanol, as reported in the aforesaid weekly stock statements for the respective quarters and the value of stores and spares and quantity of stock of sugar, molasses and ethanol

as appearing in the books of accounts and stock records being maintained by the company. However, the following differences with regards to the adoption of valuation rates exist between the weekly stock statements and books of accounts: -

a) Stock of sugar is valued at the minimum support price announced by Central Government in the weekly stock statement but is valued at lower of cost of production or net realizable value in the books of account at the time of preparation of quarterly financial statements.

b) Stock of ethanol is valued at the price as fixed by Central Government in the weekly stock statement but is valued at lower of cost of production or net realizable value in the books of account at the time of preparation of quarterly financial statements.

c) Stock of “B” Heavy Molasses is valued at the price agreed with the lenders in the weekly stock statement but is valued at derived net realizable value in the books of account at the time of preparation of quarterly financial statements.

49. The micro, small and medium enterprises development (MSMED) act, 2006

Based on the information so far obtained by the company, payment to enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) has been made within 45 days or contract terms whichever is lower and disclosure in accordance with section 22 of the MSMED Act is as under:

(c) Sensitivity analysis

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the change in defined benefit obligation and impact in percentage terms compared with the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.

Special events:

There are no special events such as benefit improvements or curtailments or settlements during the inter-valuation period.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate risk :

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Salary escalation risk :

The present value of the defined benefit plan is calculated with the assumption of salary increase 0.50% per annum of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

Actual mortality & disability : deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

(d) The Company’s liability on account of Compensated Absences are determined at end of each Financial Year on the basis of Actuarial Valuation certificates obtained from registered actuary and company’s policy of compensated absence.The company’s Compensated Absence Policy is as follows:

General Policy: The Leave Cycle is Considered from 1 January to 31 December.

Accrual of Leave: The No. of Leaves that accrue during the year for Permanent Officers is 15 days, Permanent Technical is 18.25 days and for Management and others is 30 days .

(e) Social responsibility is a company’s commitment to manage the social, environmental and economic effects of its operations responsibly and in line with public expectations. Dwarikesh Sugar Industries Limited emphasis utmost importance on its social responsibilities towards its stakeholders and makes continuous efforts to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

The Company has adopted various policies such as Corporate Social Responsibility policy, Environment policy, Code of Conduct & Ethics and makes sure that strict adherence is followed for the same.

Various committees have been constituted by the Company for periodical reviews & checks of the line of actions under these policies.

The following methods and assumptions were used to estimate the fair values.

a) Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate

b) Due to short term nature, the carrying amount of current financial assets (excluding investments) and current financial liabilities (excluding current maturities of long term debt) are considered to be the same as of their fair values . Hence, the figures are not shown in the above note.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Fair value of investment has been done on the basis of latest available financials with the Company.

54. Financial risk management objectives and policies Financial risk factors

The Company’s principal financial liabilities includes borrowings, trade payable and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s assets and operations. The Company’s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that are derived directly from its operations. The Company is exposed to credit risk, liquidity risk and market risk. The Company’s senior management oversees the management of these risks and the appropriate financial risk governance framework for the Company is in place. The senior management provides assurance 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. It is the Company’s policy that derivatives whenever used are used exclusively for hedging purposes and not for trading or speculative purposes. The Audit Committee and the Board are regularly apprised of these risks every quarter and each such risk and mitigation measures are extensively discussed and the same are summarized below:

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. One of the market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer.

A. Credit risk :

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, thereby leading to a financial loss. The Company’s major exposure of credit risk is from bank deposit and trade receivables. The Company’s sugar sales are totally on cash. Power and ethanol are sold to state government entities, thereby the credit default risk is significantly mitigated.

There is no change in loss allowances using expected credit loss model. The credit risk on deposits with banks is limited because the banks are assigned good credit ratings by international credit agencies and are scheduled banks with majority of ownership with Government of India.

B. Liquidity risk :

The liquidity risk is defined as the risk that company will not be able to settle or meet its obligation on time or at a reasonable price. The Company’s objective is to maintain optimum level of liquidity to meet its cash and collateral requirement. The Company’s management is responsible for liquidity , funding as well as settlement management. In addition process and policies related to such risks are overseen by senior management. Management monitors the company’s net liquidity position through rolling forecast on the basis of expected cash flow.

C. Market risk :

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate consequent up on changes in market prices. It mainly comprises of regulatory risk, commodity price risk & interest rate risk, which are discussed herein below:

Foreign Currency Risk

Foreign Currency Risk is the risk that the fair value or future value or future cash flow of an exposure will fluctuate due to changes in foreign exchange rate.

54. Financial risk management objectives and policies (Contd.)

The Company operates internationally and is transacted in foreign currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas. The Company holds derivative financial instruments such as foreign exchange forward to mitigate the risk of changes in exchange rates on foreign currency exposures.

There is no balance in cash flow hedge reserve as at March 31, 2023 and March 31, 2022.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for risk management purposes. Any hedge ineffectiveness is calculated and accounted for in the Statement of Profit or Loss at the time of the hedge relationship rebalancing.

ii. Regulatory risk :

Sugar industry is regulated both by central government as well as state government. Central and State governments policies and regulations affects the Sugar industry and the Company’s operations and profitability. Distillery business is also dependent on the Government policy. However, with the removal of major regulatory control on sugar sales by the Central Government, the regulatory risks are moderated but not eliminated.

iii. Commodity price risk:

Sugar prices are market driven and sugar industry being cyclical in nature, realizations get adversely affected during downturn. Higher cane price or higher production than the demand ultimately affect profitability. The Company has mitigated this risk by well-integrated business model by diversifying into co-generation and distillation, thereby utilizing the by-products. Additionally Government has also fixed a minimum Selling price of sugar below which sugar cannot be sold.

iv. Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The primary objective of the Company’s Capital Management is to

55. Impairment review:

Assets are tested for impairment whenever there are any internal or external indicators of impairment. Impairment test is performed at the level of each Cash Generating Unit (‘CGU’) or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets. The measurement of the cash generating units’ value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid-term market conditions.

Key assumptions used in value-in-use calculations are:-

(i) Operating margins (Earnings before interest and taxes), (ii) Discount Rate, (iii) Growth Rates and (iv) Capital Expenditure

56. Based on the incentive policy announced by the State Government of Uttar Pradesh vide order no. -1631 (1) S.C./ 18-02-2004-57/ 2004 dated 24.08.2004 to encourage investment in the State, the company proceeded to invest amount in excess of threshold limit as set out in the policy for availing various benefits over ten years period. On 04.06.2017 the policy was unilaterally withdrawn vide G.O. No. 1216 S.C/18.02.2007-185/2006.

Aggrieved by the said order of withdrawal, the Company and other aggrieved sugar companies challenged the order by filing appropriate writ petitions. Hon’ble High Court on 12.02.2019 passed an order quashing & setting aside the order withdrawing the incentive scheme and held the same to be in violation of principle of estopple & natural justice.

Company has since then written to competent authorities and submitted the requisite information/documents in support of its claims, the matter is yet to be concluded by the authorities

57. The Central Government, vide its Notification No. 1(10)/2018-SP-I dated July 19, 2018, notified a Scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity. Every Sugar Mill which fulfils the conditions stipulated in the scheme will be eligible for interest subvention @ 50% of the rate of interest charged by bank, which shall be borne by central Government for a period of five years on diminishing balance of the loan availed for the said purpose. Till March 31, 2023, the Company has complied with all the conditions as stated in the scheme and submitted the requisite claim for interest subvention. The interest subvention, so accrued under the Scheme till 31st March 2023 is H 364.20 Lakhs of which an amount of H 144.18 Lakhs has been received till March, 2023.

58. The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post employment received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India and subsequently on 13 November 2020 draft rules were published and invited for stakeholders’ suggestions. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

57. Events occurring after the balance sheet date:

No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization of financial statements.

^Pursuant to introduction of section 115BAA of the Income Tax Act, 1961 through Taxation Law (Amendment) Ordinance, 2019 (Ordinance), the domestic companies have with effect from financial year commencing from April 1, 2019 and thereafter, option to pay corporate income tax at reduced rate plus applicable surcharge and cess (New Tax Rate) by foregoing certain exemptions / deduction. Based on the assessment made by the company, exemptions / deductions as available to the company will get exhausted in future financial years after which the company will opt for lower tax rate as stated above. Accordingly Company has measured its deferred tax assets and liabilities using the dual income tax rate.

62. In the opinion of Board of Directors, trade receivable, other current financial assets and other current assets have a value on realisation in the ordinary course of the Company’s business which is at least equal to the amount at which they are stated in the balance sheet.

63. The Board of Directors at its meeting held on April 27, 2023 has approved the financial statements for the year ended March 31, 2023.

64. Other Statutory information

i) The Company do not have any benami property, and no proceeding has been initiated against the Company for holding any benami property.

ii) The Company does not have any transactions with struck off companies during the year, except for the following two companies who are the shareholders of the company:-

GVJ Projects Pvt. Ltd. - No. of equity shares held - 647

Vaishak Shares Ltd.- No. of equity shares held - 10

The above companies are not related parties

iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv) The Company have not traded or invested in crypto currency or virtual currency during the financial year.

v) The Company have 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:

a) 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

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

vi) The Company have 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 Group shall:

a) 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

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

vii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

viii) The Company have not declared willful defaulter by any banks or any other financial institution at any time during the financial year.

ix) All immovable properties are held in the name of the Company.


Mar 31, 2022

Note:

(i) Securities premium: securities premium is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, to provide for premium on redemption of shares, write off equity related expenses like underwriting cost etc.

(ii) Retained earnings represents the undistributed profits of the Company.

(iii) General reserve represents the statutory reserve, this is in accordance with Indian corporate law wherein a portion of profit is appropriated to general reserve. Under the erstwhile Companies Act 1956, it was mandatory to transfer amount before a company can declare dividend, however Companies Act 2013, transfer of any amount to general reserve is at the discretion of the Company.”

(iv) Capital redemption reserve represents the statutory reserve created when capital is redeemed.

(v) Other comprehensive income(OCI) reserve represents the balance in equity for items to be accounted in other comprehensive income. OCI is classified in to i) items that will not be reclassified to statement of profit & loss and ii) items that will be reclassified to statement of profit & loss.

(vi) Capital reserve represents forfeited amount pertaining to funds raised through preferential allotment of equity share warrants and the same have been utilised for augmenting long term resources.

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

D. Rights & restrictions attached to equity shares:

The Company has one class of equity shares having a face value of H1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, If any is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

E. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.-Nil

* In respect of certain proposed disallowances and additions made by the Income Tax Authorities, Appeals are pending before the Appellate Authorities and adjustment, if any, will be made after the same are finally settled.

40 Allahabad High Court in the case of PIL Rashtriya Kisan Mazdoor Sangathan VS State of U.P. passed a final order on March 09, 2017 directing the Cane Commissioner to decide afresh the issue as to whether the Sugar Mills are entitled for waiver of interest on the delayed payment of the price of sugarcane for the seasons 2012-13, 2013-14 and 2014-15 under the provisions of Section 17(3) of the U.P. Sugarcane (Regulations of Supply and Purchase) Act, 1953 (in short ‘the Act’). Thereafter in an CAPL (contempt application) No. 2815/2018 titled ‘V.M. Singh versus Shri Sanjay Bhoosereddy’ in the Hon’ble Allahabad High Court and its follow-on proceedings, the Cane Commissioner is understood to have filed an affidavit specifying interest rates on delayed cane price payments but no such order of the Cane Commissioner has been served on the Company or industry association. Subsequently State Government has filed modification application before and Mr. V. M. Singh has also filed SLP with the Supreme Court in this matter and pending disposal of the same the High Court has deferred the hearing of contempt petition. The matter is still pending before the Supreme Court for adjudication. Based on the legal review of the facts of this case, possibility of liability crystalizing is remote and hence no provision is considered necessary.

41 Cane societies were in dispute with the State Government of Uttar Pradesh with regard to retrospective partial waiver of society commission payable by the sugar mills for the crushing seasons 2012-13,2014-15 and 2015-16 as a part of its relief package to sugar industry . Hon’ble Allahabad High Court held that concessional rate of society commission fixed by the U.P Government cannot have retrospective operations and shall be applicable prospectively from the date of the notification. Against the said judgment, the U.P Sugar Mill Association filed SLP ( C ) No 032225-032227/2018 . Hon’ble Supreme Court, vide order dated 03.12.2018, issued notice and directed that no coercive steps shall be taken against the petitioners. The matter is pending for further adjudication. Based on the legal advice, no liability is likely to crystalize on the Company in this matter.

42 The Uttar Pradesh Sheera Niyantran (Dwitiya Sanshodhan) Adhiniyam, 2021 (U.P Act No. 35 of2021) Notified vide Gazette Notification dated 24.12.2021 levying “Regulatory Fees” @ H20 per quintal on any sale, transfer or supply of molasses from sugar factory. The said levy & realization of regulatory fee has been stayed by an interim order passed by Honorable High Court of Lucknow pursuant to the writ filed by Industry Association. Pending disposal of the writ the same has not been booked as expense and an amount of H135.68 lakhs, being the amount paid under protest is carried as an asset, as no liability is expected to arise on this score.

General description of lease terms:

a) The operating lease arrangement are renewable on a periodic basis and for most of the leases extend up to a maximum of 6 years from their respective dates of inception and rented premises.

b) These lease agreements have price escalation clause of 15% after three years from the inception ofthe lease agreement.

49 Employee benefits:

(a) The Company has made provision for gratuity and leave encashment in the nature of defined benefit obligation on the basis of actuarial valuation as per Ind AS 19. Since the liability has not been funded through a trust or insurer, there are no plan assets.

(b) Defined contribution plans:

Employer’s contribution to provident fund H541.81 Lakhs (previous period H543.03 Lakhs).

These sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analyses.

Special events:

There are no special events such as benefit improvements or curtailments or settlements during the inter-valuation period.

(d) Social responsibility is a Company’s commitment to manage the social, environmental and economic effects of its operations responsibly and in line with public expectations. Dwarikesh Sugar Industries Limited emphasis utmost importance on its social responsibilities towards its stakeholders and makes continuous efforts to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

The Company has adopted various policies such as Corporate Social Responsibility policy, Environment policy, Code of Conduct & Ethics and makes sure that strict adherence is followed for the same.

Various committees have been constituted by the Company for periodical reviews & checks of the line of actions under these policies.

The following methods and assumptions were used to estimate the fair values.

a) Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.

b) Due to short term nature, the carrying amount of current financial assets (excluding investments) and current financial liabilities (excluding current maturities of long term debt) are considered to be the same as of their fair values . Hence, the figures are not shown in the above note.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.

as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

Valuation of investment has been done on the basis of latest available financials with the Company.

52 Financial risk management objectives and policies

Financial risk factors

The Company’s principal financial liabilities includes borrowings, trade payable and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s assets and operations. The Company’s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that are derived directly from its operations. The Company is exposed to credit risk, liquidity risk and market risk. The Company’s senior management oversees the management of these risks and the appropriate financial risk governance framework for the Company is in place. The senior management provides assurance 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. It is the Company’s policy that derivatives whenever used are used exclusively for hedging purposes and not for trading or speculative purposes. The Audit Committee and the Board are regularly apprised of these risks every quarter and each such risk and mitigation measures are extensively discussed and the same are summarized below:

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. One of the market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer.

A. Credit risk :

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, thereby leading to a financial loss. The Company’s sugar sales are totally on cash. Power and ethanol are sold to state government entities, thereby the credit default risk is significantly mitigated.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credit facilities, short term loans and commercial papers.

C. Market risk :

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate consequent up on changes in market prices. It mainly comprises of regulatory risk, commodity price risk & interest rate risk, which are discussed herein below:

The Company operates internationally and is transacted in foreign currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas. The Company holds derivative financial instruments such as foreign exchange forward to mitigate the risk of changes in exchange rates on foreign currency exposures.

There is no balance in cash flow hedge reserve as at March 31, 2022, However, in the previous year, the Company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transactions.

Hedge effectiveness is determined at the inception ofthe hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

Ifthe hedge ratio for risk management purposes is no longer optimal but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns with the ratio used for

ii. Regulatory risk :

Sugar industry is regulated both by central government as well as state government. Central and State governments policies and regulations affects the Sugar industry and the Company’s operations and profitability. Distillery business is also dependent on the Government policy. However, with the removal of major regulatory control on sugar sales by the Central Government, the regulatory risks are moderated but not eliminated.

iii. Commodity price risk:

Sugar prices are market driven and sugar industry being cyclical in nature, realizations get adversely affected during downturn. Higher cane price or higher production than the demand ultimately affect profitability. The Company has mitigated this risk by well-integrated business model by diversifying into co-generation and distillation, thereby utilizing the by-products. Additionally Government has also fixed a minimum Selling price of sugar below which sugar cannot be sold.

iv. Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidenc< and to sustain future development of the business. The primary objective of the Company’s Capital Management i: to maximise the shareholder’s value. Management also monitors the return on capital. The board of directors seek: to maintain a balance between the higher returns that might be possible with higher levels of borrowing and th< advantages and security afforded by a sound capital position. However, sugar being a seasonal industry, it is ver highly capital and working capital intensive, therefore required to raise need based short term and long term debt fo smooth running of the operations.

53 Impairment review:

Assets are tested for impairment whenever there are any internal or external indicators of impairment. Impairment test is performed at the level of each Cash Generating Unit (‘CGU’) or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets. The measurement of the cash generating units’ value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid-term market conditions.

Key assumptions used in value-in-use calculations are:-

(i) Operating margins (Earnings before interest and taxes), (ii) Discount Rate, (iii) Growth Rates and (iv) Capital Expenditure

54 During the FY 2020-21, under GOI’s notification no 1(8)/2019-SP-I dated 31st July, 2019 the Company created buffer stock of 4,47,930 quintal sugar on 1st August 2019 for a period of one year and accounted H472.47 Lakhs, of which H403.61 lakhs towards interest reimbursement is deducted from Finance cost and H68.86 lakhs related to reimbursement of storage expenses is deducted from Other expenses. Since the terminal date of the scheme was is in FY 2020-21, during FY 202122, no amount is accounted under the above scheme.

55 GOI vide notification no 1(14)/2019 -S.P.-1 dated 12.09.2019, notified a Scheme for providing-assistance @ H10,448/- per MT to sugar mills for expenses on marketing cost including handling, upgrading and other processing costs and costs of international and internal transport and freight charges on export of sugar under MAEQ Scheme for sugar season 2019-20. During FY 2020-21 Company’s entitlement was H8,409.60 Lakhs under the said scheme and credited the same to other operating revenues.

Further, GOI vide notification no 1(6)/2020 -S.P.-1 dated 29.12.2020, notified a Scheme for providing-assistance @ H6,000/-per MT to sugar mills for expenses on marketing cost including handling, upgrading and other processing costs and costs of international and internal transport and freight charges on export of sugar under MAEQ Scheme for sugar season 202021. Under the said Scheme, the Company’s entitlement during FY 2020-21 works out to H4,767.18 Lakhs and credited the same to other operating revenues.

56 Based on the incentive policy announced by the State Government of Uttar Pradesh vide order no. -1631 (1) S.C./ 18-02-2004-57/ 2004 dated 24.08.2004 to encourage investment in the State, the Company proceeded to invest amount in excess of threshold limit as set out in the policy for availing various benefits over ten years period. On 04.06.2017 the policy was unilaterally withdrawn vide G.O. No. 1216 S.C/18.02.2007-185/2006.

Aggrieved by the said order of withdrawal, the Company and other aggrieved sugar companies challenged the order by filing appropriate writ petitions. Hon’ble High Court on 12.02.2019 passed an order quashing & setting aside the order withdrawing the incentive scheme and held the same to be in violation of principle of estopple & natural justice.

Company has since then written to competent authorities and submitted the requisite information/documents in support of its claims, the matter is yet to be concluded by the authorities.

58 Income tax: (contd.)

thereafter, option to pay corporate income tax at reduced rate plus applicable surcharge and cess (New Tax Rate) by foregoing certain exemptions / deduction. Based on the assessment made by the Company, exemptions / deductions as available to the Company will get exhausted in future financial years after which the Company will opt for lower tax rate as stated above. Accordingly Company has measured its deferred tax assets and liabilities using the dual income tax rates, resulting in reversal of deferred tax liability of H1,628.69 lakhs (previous year H1,422.79 lakhs).

59 COVID 19

The Company is periodically reviewing possible impact of COVID-19 on it’s business and the same are considered in preparation of financial statements for the year ended 31st March, 2022. Review includes internal & external factors as known to the Company up to the date of approval ofthese financial statements to assess and finalise the carrying amounts of its assets & Liabilities.

61 The previous year’s including figures as on the date oftransition have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year including figures as at the date of transition are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

62 Other Statutory information

i) The Company do not have any benami property, and no proceeding has been initiated against the Company for holding any benami property.

ii) The Company do not have any transactions with companies struck off.

iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv) The Company have not traded or invested in crypto currency or virtual currency during the financial year.

v) The Company have 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:

a) 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

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

vi) The Company have 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 Group shall:

a) 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

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

vii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961”.

viii) The Company have not declared willful defaulter by any banks or any other financial institution at any time during the financial year.

ix) All immovable properties are held in the name of the Company.

The accompanying notes form an integral part of these financial statements


Mar 31, 2018

1.Related party disclosures as required by Ind AS 24 for the year ended March 31, 2018

a) Names of the related parties and description of relationship:

i) Enterprises over which key - Morarka Finance Limited management personnel are able - Dwarikesh Trading Company Limited to exercise significant influence - Dwarikesh informatics Limited

- Dwarikesh Agriculture Research institute

- Faridpur sugars Limited

- R R Morarka Charitable Trust

ii) Key management personnel - shri G.R.Morarka Managing Director

- shri B.J.Maheshwari Whole-time Director & Company secretary

Cum Chief Compliance Officer

- shri Vijay s. Banka Whole -time Director & Chief Finance Officer

iii) Relatives of Key Managerial Personnel - Ms. Priyanka G. Morarka (Daughter)

Shri G.R.Morarka

The following methods and assumptions were used to estimate the fair values.

a) Company has adopted effective rate of interest for calculating interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. in addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.

b) Due to short term nature, the carrying amount of current financial assets (excluding investments) and current financial liabilities (excluding current maturities of long term debt) are considered to be the same as of their fair values . Hence, the figures are not shown in the above note.

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

2. Financial risk management objectives and policies

Financial risk factors

The Company''s principal financial liabilities includes borrowings, trade payable and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s assets and operations. The Company''s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that are derived directly from its operations. The Company is exposed to credit risk, liquidity risk and market risk. The Company''s senior management oversees the management of these risks and the appropriate financial risk governance framework for the Company is in place. The senior management provides assurance 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. it is the Company''s policy that derivatives whenever used are used exclusively for hedging purposes and not for trading or speculative purposes. The Audit Committee and the Board are regularly apprised of these risks every quarter and each such risk and mitigation measures are extensively discussed and the same are summarized below:

A. Credit risk :

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, thereby leading to a financial loss. The Company''s sugar sales are totally on cash. Power and ethanol are sold to state government entities, thereby the credit default risk is significantly mitigated.

ii. Regulatory risk :

sugar industry is regulated both by central government as well as state government. Central and state governments policies and regulations affects the sugar industry and the Company''s operations and profitability. Distillery business is also dependent on the Government policy. However, with the removal of major regulatory control on sugar sales by the Central Government, the regulatory risks are moderated but not eliminated.

iii. Commodity price risk:

sugar prices are market driven and sugar industry being cyclical in nature, realizations get adversely affected during downturn. Higher cane price or higher production than the demand ultimately affect profitability. The Company has mitigated this risk by well integrated business model by diversifying into co-generation and distillation, thereby utilizing the by-products.

52 Impairment review:

Assets are tested for impairment whenever there are any internal or external indicators of impairment. impairment test is performed at the level of each Cash Generating Unit (''CGU'') or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets. The measurement of the cash generating units'' value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid-term market conditions.

Key assumptions used in value-in-use calculations are:-

(i) Operating margins (Earnings before interest and taxes), (ii) Discount Rate, (iii) Growth Rates and (iv) Capital Expenditure

3 During FY 2016-17, the Company, as per GOI notification no. 20(43)/2015-sP-I dated December 2nd, 2015 and September 12th, 2016, accounted for Production subsidy @ RS, 4.50 per quintal of sugar cane crushed during the sugar season 2015-16 amounting to RS, 941.06 Lakhs, and considered the same as exceptional income. The Company also accounted RS, 184 Lakhs towards remission of the purchase tax pertaining to sugar season 2012-13 allowed by the state Government of Uttar Pradesh and considered the same as exceptional income.

During FY 2016-17, irrecoverable claim amounting to RS, 631.55 Lakhs were written off by the Company in pursuance of Uttar Pradesh

Government order dated 28th December, 2016 which was recoverable from State Government of Uttar Pradesh towards society commission relating to sugar season 2015-16. The same was considered as exceptional expense.

Net impact of the above transactions stated above amounting to RS, 322.71 Lakhs, net of taxes, was shown as an exceptional item in the Statement of Profit and Loss.

54 During the year, the Company sold Renewal Energy Certificates (RECs) for a consideration of RS, 1,125.52 Lakhs (previous year RS, 890.54 Lakhs). The Company also incurred RS, 111.85 lakhs (previous year RS, 117.31 Lakhs) as expenditure on such sale. These RECs are generated due to environmental concerns and allotted to the Company as per Regulation on Renewal Energy Certificate, notified by Central Electricity Regulatory Commission. Judgments of the various Hon''ble courts held that such credits were not an off shoot of business but an off shoot of environmental concerns and hence, the net gain from such sale was held as capital receipt and not an income forming part of the operations of the Company. The same is also supported by legal opinion obtained by the Company. Accordingly, net earnings on such sale amounting to H 1,013.67 Lakhs (previous year H 773.22 Lakhs) was treated as capital receipt for computation of the income tax (including MAT computation).

55 Allahabad High Court in the case of PiL Rashtriya Kisan Mazdoor Sangathan VS State of U.P. (no.67617 of 2014) passed a final order on 9th March, 2017 directing the Cane Commissioner to decide afresh the issue within 4 months as to whether the Sugar Mills are entitled for waiver of interest on the delayed payment of the price of sugarcane for the seasons 2012-13, 2013-14 and 2014-15 under the provisions of Section 17(3) of the U.P. Sugarcane (Regulations of Supply and Purchase) Act, 1953 (in short ''the Act''). No order has yet been passed by the Cane Commissioner. Based on the legal opinion received by the industry Association, possibility of the liability crystallizing on this score is remote. No provision in respect of such improbable liability is made.

56 Liability component of compound financial instrument :

During FY 2016-17 , being a committed obligation to pay dividend on cumulative redeemable preference shares, the Company provided an amount of H 1,519 Lakhs and H 309.23 Lakhs towards dividend on preference shares and corporate dividend tax thereon respectively, including arrears of H 1,265.80 Lakhs and corporate dividend tax H 257.69 Lakhs thereon respectively. Pursuant to sub section (2) of section 47 of the Companies Act, 2013, all series of preference shareholders are now vested with voting rights since dividend was in arrears for more than 2 years (since paid).

57 Cane societies are in dispute with the State Government of Uttar Pradesh with regard to retrospective partial waiver of society commission payable by the sugar mills for the crushing seasons 2012-13,2014-15 and 2015-16. Company was the beneficiary of such waiver, based on the legal advice no liability is likely to crystalize on the Company on this matter.

58 Events occurring after the balance sheet date:

No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization of financial statements.

4 First time adoption of Ind AS

These financial statements, for the year ended March 31, 2018, are the first the company has prepared in accordance with ind As. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with ind As applicable for period ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. in preparing these financial statements, the Company''s opening balance sheet was prepared as at April 01, 2016, the Company''s date of transition to ind As. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.

Exemptions applied :

The estimates at April 01, 2016 and at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items under Indian GAAP did not require estimation:

- Fair value of investments in unquoted equity instruments.

- impairment of financial assets based on expected credit loss model

- Discount rates

The estimates used by the Company to present these amounts in accordance with ind As reflect conditions that existed as at April 01, 2016 and March 31, 2017.

1. Fair valuation of investments

Under Indian GAAP, investments in equity instruments, mutual funds and debt securities were classified as long term investments or current investments based on the intended holding period and realism ability. Long term investments were carried at cost less provision for other than temporary diminution in the value of investments. Current investments were carried at lower of cost and fair value. ind As requires such investments to be measured at fair value except investments in subsidiaries, associates and joint venture for which exemption has been availed.

Accordingly, the Company has designated investments in equity instruments and mutual funds as FVTPL investments. The difference between the instrument''s fair value and Indian GAAP carrying amount has been recognized in retained earnings.

5. Financial instruments measured at amortized cost

Under Indian GAAP, interest free loan to employees are recorded at their transaction value. Under ind As, these loans are to be measured at amortized cost on the basis of effective interest rate method. Due to this, long term loans to employees and short term loans to employees has been decreased and difference between carrying amount and amortized cost has been recognized as ''Deferred employee cost'' under the head ''Other non-current assets''/''Other current assets''.

6. Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under ind As, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. Therefore, borrowings as at 1st April 2016 and 31st March 2017 have been reduced with corresponding adjustment in retained earnings.

7. Defined benefit obligation

Both under Indian GAAP and ind As, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gain and loss, are charged to profit and loss. Under ind As, such actuarial gain and loss is to be recognized separately through Other Comprehensive income. Thus, employee cost has been reduced and actuarial gain/loss has been recognized in OCi net of taxes.

5. Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under ind As, sale of goods includes excise duty. Thus, sale of goods under ind As has increased by the excise duty with a corresponding increase in other expenses.

8. Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. ind As requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of ind As has resulted in recognition of deferred tax on temporary differences which was not required under Indian GAAP, in addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

9. Statement of cash flows

The transition from Indian GAAP to IND As has not had a material impact on statement of cash flows.

Notes to Reconciliation a Security Deposits

Company has paid security deposit, against the lease of office and guest house situated at Delhi. Indian GAAP requires the entire amount to be recognized in books under assets. However, in ind As, the fair value of security deposit has been disclosed a financial asset and the balance amount has been recognized as advance lease rent, giving a net impact on the retained earnings i.e. nil.

b Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. ind As 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of ind As 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. On the date of transition, the net increase of deferred tax liabilities is of RS, 31.22 Lakhs.

d Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under ind As, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. The net effect of this change is a increase in total equity by RS, 90.20 Lakhs, resulting in a corresponding decrease in long term loan liability towards banks, by RS, 70.56 Lakhs, and their current maturities by RS, 19.64 Lakhs.

e Financial Assets & Liabilities

Under Indian GAAP, there was no such concept of financial assets or liabilities. Under ind As, financial assets and financial liabilities has been classified as per ind As 109 read with ind As 32. Figures of the previous year have been regrouped as per ind As, wherever necessary.

f FVTOCI financial assets

Under Indian GAAP, the company accounted for long term investments in unquoted and quoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under ind As, the company has designated such investments as FVTOCI investments. ind As requires FVTOCI investments to be measured at fair value. At the date of transition to ind As, difference between the instruments fair value and Indian GAAP carrying amount has been recognized under other comprehensive income.

g Dividends

Under Indian GAAP, proposed dividends including DDT are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under ind As, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

h Defined benefit obligation

Both under Indian GAAP and ind As, the company recognized costs related to its post-employment defined benefit obligation on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains/losses and interest, are charged to profit or loss. Under ind AS, actuarial gains/losses debit or credit to retained earnings through OCi and interest as finance cost. Thus the employee benefit cost is reduced by H 209.08 Lakhs (F.Y. 2016-17) and Remeasurement gains/ losses on defined benefit plans has been recognized in the OCi net of tax.

i Property, plant and equipment & Depreciation

The company has elected to measure certain items of property, plant and equipment at cost at the date of transition to ind AS. Hence at the date of transition to ind AS, has no impact on recognized in property, plant and equipment.

j Other comprehensive income

Under Indian GAAP, the company has not presented other comprehensive income (OCi) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per ind AS.

k Standards issued but not effective yet

ind AS 115 was issued in February 15 and establishes a five step model to account for revenue arising from contracts with customers. The new revenue standard will supersede all current revenue recognition requirements under ind AS. This standard will come into force from 1st April, 2018. The company will adopt new standard on the required effective date.

l Revenue from sale of goods

Excise duty Under the previous GAAP, revenue from sale of goods was presented as net of excise duty on sales. However, under ind AS, revenue from sale of goods includes excise duty and such excise duty is separately presented as an expense on the face of the Statement of Profit and Loss. Thus, under ind AS, sale of goods for the year ended 31st March, 2016 has increased by H 6,569.95 lakhs with a corresponding increase in "Total expense"

m Interest Income

The previous GAAP required the recognition of revenue from interest on time proportion basis. However, ind AS requires interest on financial assets to be recognized using the effective interest rate method.

n Total comprehensive income and other comprehensive income

Under the previous GAAP, the Company did not present total comprehensive income and other comprehensive income. Hence, it has reconciled the previous GAAP profit to profit as per ind AS. Further, the previous GAAP profit is reconciled to other comprehensive income and total comprehensive income as per ind AS.

10. The previous year''s including figures as on the date of transition have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year including figures as at the date of transition are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2017

NOTE “1 A” GENERAL INFORMATION

Dwarikesh Sugar Industries Limited (DSIL) is a public limited company domiciled in India and was incorporated in the year 1993 under the provisions of the Companies Act, 1956 superseded by the Companies Act, 2013.

Currently equity shares of the company are listed at BSE and NSE.

DSIL is integrated conglomerate, primarily engaged in manufacture of sugar and allied products. From a humble beginning in 1993, DSIL today is a multi-faceted, fast growing industrial group with the strong presence in diversified fields such as sugar manufacturing, power and Ethanol/Industrial Alcohol production.

The Company has three sugar manufacturing units, out of which 2 units namely Dwarikesh Nagar and Dwarikesh Puram are located in Bijnor District of Uttar Pradesh (U.P) and one unit namely Dwarikesh Dham in Bareilly District (U.P).

Registration details

Registration No. CIN No. L15421 UP1993 PLC 018642 State code 20

Generic name of principal product of the Company

Item code No. (ITC Code) 170111.09 Product Description Cane Sugar

2. Estimated amount of contracts remaining to be executed on capital account, net of advance of RS.37,82,052 (previous period RS.41,31,052) and not provided for is RS.73,39,937 (previous period RS.37,09,872). Other Commitments Rs.Nil (previous period Rs.Nil).

3. a) The company has made provision for gratuity and leave encashment in the nature of defined benefit obligation on the basis of actuarial valuation as per Accounting Standard AS-15. Since the liability has not been funded through a Trust or Insurer, there are no plan assets.

b) i) Defined Contribution Plans:

Employer-s Contribution to Provident Fund RS.4,50,90,791 (previous period RS.3,53,83,025).

ii) Defined Benefits Plans:

Liability for Gratuity is determined on actuarial basis using projected unit credit method. The details are as under:

4. During the year, the Company, as per GOI notification no. 20(43)/2015-SP-I dated December 2nd, 2015 and September 12th, 2016, has accounted for Production subsidy @ RS.4.50 per quintal of sugar cane crushed during the sugar season 2015-16 amounting to RS.9,41,05,562, and is considered as exceptional income. The Company has also accounted RS.1,84,00,000 towards remission of the purchase tax pertaining to sugar season 2012-13 allowed by the State Government of Uttar Pradesh and considered as exceptional income.

During the year irrecoverable claim amounting to RS.6,31,55,220 are written off by the Company in pursuance of Uttar Pradesh Government order dated 28th December, 2016 which was recoverable from State Government of Uttar Pradesh towards society commission relating to sugar season 2015-16. The same is considered as exceptional expense.

During the previous year the State Government of Uttar Pradesh had granted part remission of the commission payable to Cane Societies on cane purchased during the crushing season 2012-13 amounting to RS.7,52,12,766 which was considered as exceptional income.

Net impact of the above transactions stated above amounting to RS.3,22,71,176 ( previous year RS.4,91,83,132) , both net of taxes, are shown as an exceptional item in the Statement of Profit and Loss.

5. During the year, the Company has sold Renewal Energy Certificates (RECs) for a consideration of RS.8,90,53,500 (previous year RS.7,94,73,000) and incurred RS.1,17,31,398 (previous year RS.1,78,61,217 as expenditure on such sale. The Company has not incurred any cost to earn the RECs. These RECs have been generated due to environmental concerns and allotted to the company as per Regulation on Renewal Energy Certificate, notified by Central Electricity Regulatory Commission. Judgements of the various Hon-ble courts have held that such credits are not an off shoot of business but an off shoot of environmental concerns and hence, the net gain from such sale has been held as capital receipt and not an income forming part of the operations of the Company. The same is also supported by legal opinion obtained by the Company. Accordingly, net earnings on such sale amounting to RS.7,73,22,102 (previous year RS.6,16,11,783) is treated as capital receipt for computation of the income tax (including MAT computation) .

6. Trade Receivable/Payables and Loans and Advances balances are subject to confirmation and reconciliation.

7. As per the Accounting Standard AS-28 -Impairment of Assets-, the company has tested impairment to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly, no impairment is required to be recognized during the current period.

8. Operating lease:

Obligation on long - term, non - cancellable operating leases:

The lease rentals charged during the period and the obligation on long-term, non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows:

The operating lease arrangement are renewable on a periodic basis and for most of the leases extend up to a maximum of 6 years from their respective dates of inception and rented premises. These lease agreements have price escalation clause of 15%.

9. There are no present obligations requiring provision in accordance with the guiding principles as enunciated in Accounting Standard AS-29 as it is not probable that an outflow of resources embodying economic benefit will be required.

10. Disclosure on Specified Bank Notes (SBNs):

During the year, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R.308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016, the denomination wise SBN-s and other notes as per the notification is given below:-

11. Derivative instruments and foreign currency exposures:

(a) During the year Rupee term loans of Rs.Nil (previous period RS.4,100 lacs) were converted into foreign currency loan of USD nil (previous period USD 64,85,289.46) out of which Rs.Nil (previous period RS.4,100 lacs equivalent to USD 64,85,289.46) was reinstated as Rupees term loan during previous year itself. The above loans were hedged by forward contracts and there is no foreign currency exposure outstanding as at the Balance Sheet date.

(b) Particulars of un-hedged foreign currency exposures as at the Balance Sheet date are Rs.Nil (Previous period Rs.Nil).

12. Provision for current income tax and deferred tax has been made considering various benefits and allowances available to the Company under the provisions of the Income Tax Act 1961

13. Allahabad High Court in the case of PIL Rashtriya Kisan Mazdoor Sangathan VS State of U.P.( no.67617 of 2014) passed a final order on 9th March, 2017 directing the Cane Commissioner to decide afresh the issue within 4 months as to whether the Sugar Mills are entitled for waiver of interest on the delayed payment of the price of sugarcane for the seasons 2012-13, 2013-14 and 2014-15 under the provisions of Section 17(3) of the U.P. Sugarcane (Regulations of Supply and Purchase) Act, 1953 (in short -the Act-). No order has yet been passed by the Cane Commissioner. Based on the discussions with legal experts, Industry Association is of the opinion that the order is likely to be struck down if an appeal is preferred in Higher Court. Hence the Association is likely to file an SLP with the Supreme Court. Since the possibility of the liability crystallizing on this score is remote, no provision in respect of such improbable liability is made.

14. Pursuant to Section 135 of the Companies Act, 2013 the Company has incurred expenditure (paid) in respect of corporate social responsibility as follows:

(a) Gross amount required to be spent by the company during the year: NIL

(b) Amount Spent during the year on: RS.1,26,18,993

15. (i) Preference Share:

Being a committed obligation to pay dividend on cumulative redeemable preference shares, the Company has provided an amount of RS.15,19,00,000 and RS.3,09,23,266 towards dividend on preference shares and corporate dividend tax thereon respectively including arrears of RS.12,65,80,000 and corporate dividend tax RS.2,57,68,710 thereon respectively. Pursuant to sub section (2) of section 47 of the Companies Act, 2013, all series of preference shareholders are now vested with voting rights since dividend was in arrears for more than 2 years.

(ii) Equity Shares:

The Board of Directors has recommended a dividend of RS.10 Per equity share of RS.10/- each, aggregating to RS.2,266.35 lakhs (including dividend distribution tax).

The Central Government, in consultation with the National Advisory Committee on Accounting Standards, has amended the Companies (Accounting Standards) Rules, 2006 (-principal rules-) through a notification issued by Ministry of Corporate Affairs dated March 30, 2016. Further clarification dated 27th April 2016 provides that The Companies (Accounting Standards) Rules, 2016 is effective for accounting periods commencing on or after the date of notification. According to the amended rules, the above mentioned proposed dividend will not be recognized as a liability as at 31st March 2017. Hence the proposed dividend has not been recognized as liability as on 31st March 2017.

16. Previous period figures have been regrouped and recasted wherever considered necessary.

17. Segment information for the year ended 31st March 2017

(i) Information about Primary Business segment

Revenue in respect of captive power produced from co generation plant has been arrived at based on the rates at which the same is being supplied to State Electricity Board.

(ii) The company does not have any Secondary Business Segment since there were no exports during the year and no assets located outside India.


Mar 31, 2016

b) Preference Shares:-

12% cumulative redeemable preference shares (Series I):

1.10.000, 12% cumulative redeemable preference shares of '' 100 each were issued in September 1998. These preference shares were to be redeemed at par in September,2011 which has been originally extended to September,2014 is now further extended to 01/08/2018 by virtue of the resolution passed in preference shareholders meeting held on 16/08/2014 wherein the consent is obtained from the concerned shareholders.

8% cumulative redeemable preference shares (Series II): 1.500.000, 8% cumulative redeemable preference shares of Rs. 100 each were issued in August,2007. These preference shares were to be redeemed at par in August 2015 which has now been extended to August, 2020 by virtue of consent obtained from the concerned shareholders.

8% cumulative redeemable preference shares (Series III): 1.000.000, 8% cumulative redeemable preference shares of Rs. 100 each were issued in October 2012. These preference shares shall be redeemed at par in September, 2017.

8% cumulative redeemable preference shares (Series IV): 500.000, 8% cumulative redeemable preference shares of Rs. 100 each were allotted in April 2013. These preference shares shall be redeemed at par in March, 2018.

D Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.- Nil

1. As at Balance Sheet date the investments that are intended to be held for not more than one year are reclassified as in order to comply with the requirements of Schedule III of the Companies Act, 2013.

2. Company is having investment in associate companies namely ''Dwarikesh Informatics Limited'' and ''Faridpur Sugars Limited'' and the accounts of these companies are required to be consolidated as per the section 129 (3) of the Companies Act, 2013. In view of the intention of the management to dispose the same in part or in full in the near future, the investment in these associates companies is considered temporary, and therefore, the consolidation of accounts with above mentioned companies is not required as enunciated in Accounting Standard AS-21 ''Consolidated Financial Statement'' specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Company (Accounts) Rules, 2014.

NOTE "3 A" GENERAL INFORMATION

Dwarikesh Sugar Industries Limited (DSIL) is a public limited company domiciled in India and was incorporated in the year 1993 under the provisions of the Companies Act, 1956.

Currently equity shares of the company are listed at BSE and NSE.

DSIL is integrated conglomerate, primarily engaged in manufacture of sugar and allied products. From a humble beginning in 1993, DSIL today is a multi-faceted, fast growing industrial group with the strong presence in diversified fields such as sugar manufacturing, power and Ethanol/Industrial Alcohol production.

The Company has three sugar manufacturing units, out of which 2 units namely Dwarikesh Nagar and Dwarikesh Puram are located in Bijnor District of Uttar Pradesh (U.P) and one unit namely Dwarikesh Dham in Bareilly District (U.P.).

Registration details

Registration No. CIN No. L15421 UP1993 PLC 018642 State code 20

Generic name of principal product of the Company

Item code No. (ITC Code) 170111.09 Product Description Cane Sugar


Mar 31, 2015

1. Figures in bracket indicate cash outflow.

2. The above cash flow statement has been prepared under the indirect method set out in AS-3 notified pursuant to the Companies (Accounting Standards) Rules,2006.

3. Previous year figures have been regrouped and recasted wherever necessary to conform to the current year''s classification.

A Rights & restrictions attached to various classes of shares are as under:

a) Equity Shares:-

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, If any is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

b) Preference Shares:-

12% cumulative redeemable preference shares (Series I):

1.10.000, 12% cumulative redeemable preference shares of Rs. 100 each were issued in September 1998. These preference shares were to be redeemed at par in September,2011 which has been originally extended to September,2014 is now further extended to 01/08/2018 by virtue of the resolution passed in preference share holders meeting wherein the consent is obtained from the concerned shareholders and committee of board.

8% cumulative redeemable preference shares (Series II):

15.00. 000, 8% cumulative redeemable preference shares of Rs. 100 each were issued in August,2007. These preference shares were to be redeemed at par in August, 2012,which has been extended to August, 2015 by virtue of consent obtained from the concerned shareholders.

8% cumulative redeemable preference shares (Series III):

10.00. 000, 8% cumulative redeemable preference shares of Rs. 100 each were issued in October 2012. These preference shares shall be redeemed at par in September,2017.

8% cumulative redeemable preference shares (Series IV):

50.00. 00, 8% cumulative redeemable preference shares of Rs. 100 each were allotted in April 2013. These preference shares shall be redeemed at par in March,2018.

D Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.-Nil notes annexed to and forming part of the financial statements for the eighteen months ended march 31, 2015 note "28 A" general information

Dwarikesh Sugar Industries Limited (DSIL) is a public limited company domiciled in India and was incorporated in the year 1993 under the provisions of the Companies Act,1956.

Currently equity shares of the company are listed at BSE and NSE.

DSIL is integrated conglomerate, primarily engaged in manufacture of sugar and allied products. From a humble beginning in 1993, DSIL today is a multi faceted, fast growing industrial group with the strong presence in diversified fields such as sugar manufacturing, power and Ethanol/Industrial Alcohol production.

The Company has three sugar manufacturing units, out of which 2 units namely Dwarikesh Nagar and Dwarikesh Puram are located in Bijnor District of Uttar Pradesh ( U.P.) and one unit namely Dwarikesh Dham in Bareilly District (U.P.).

Registration details

Registration No. CIN No. L15421 UP1993 PLC 018642 State code 20

Generic name of principal product of the Company

Item code No.(ITC Code) 170111.09 Product Description Cane Sugar

"2 B" - OTHER NOTES

1. SECURITIES FOR BORROWINGS:

Abbreviations:

DN - Dwarikesh Nagar Unit DP- Dwarikesh Puram Unit DD - Dwarikesh Dham Unit ROI-Rate of interest O/S- Amount outstanding Qtly.- Quarterly FCL- Foreign Currency Loan

PNB- Punjab National Bank

IDBI- IDBI Bank Limited

SUPGB- Sarva U.P.Gramin Bank

DCB- District Co-Operative Bank (Zila Sahkari Bank)

UPCB- U.P.Co-Operative Bank

SDF- Sugar Development Fund

2. Contingent liabilities not provided for

Particulars As at As at 31st March 15 30th Sep''13

(a) Claims not acknowledged as debts by the company. 20,76,408 20,76,408

(b) In respect of show cause notices from Central Excise department in various cases against 5,45,34,998 3,22,30,862 which the company has preferred appeals [net of amount reversed and payments of Rs. 2,40,72,147 (previous year Rs. 2,40,62,421)].

(c) In respect of Trade Tax and Entry Tax demand received from Uttar Pradesh Trade Tax Nil Nil authorities in various cases, in respect of which the company has preferred appeals [net of amount deposited under appeal of Rs. 3,76,453 (previous year Rs. 15,98,498)].

(d) Guarantees issued by the bankers on behalf of the Company. 69,68,525 Nil

3. a) Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs. 2,05,11,055 (previous year Rs. 2,76,73,832) and not provided for is Rs. 10,53,344 (previous year Rs. 73,87,249). Other Commitments Rs. Nil (previous year Rs. Nil).

4. a) The company has made provision for gratuity and leave encashment in the nature of defined benefit obligation on the basis of actuarial valuation as per Accounting Standard AS-15. Since the liability has not been funded through a Trust or Insurer, there are no plan assets. b) i) Defined Contribution Plans :

Employer''s Contribution to Provident Fund Rs. 5,20,65,182 (previous year Rs. 3,04,60,024).

5. Trade Receivable/Payables and Loans and Advances balances are subject to confirmation and reconciliation.

6. As per the Accounting Standard AS-28 ''Impairment of Assets'', the company has tested impairment to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the period.

7. The company has not taken/given any assets on finance/ operating lease. Accordingly, Accounting Standard AS-19 on leases is not applicable. The company has taken various office/ residential premises and office equipment''s on cancellable leases which are renewable on expiry of the respective lease period.

8. Derivative instruments and foreign currency exposures:

(a) During the period Rupee term loans of Rs. 15,000 lacs (previous year Nil) were converted into foreign currency loan of USD 2,44,40,305.80, out of which Rs. 10,000 lacs equivalent to USD 1,65,70,008.30 was reinstated as Rupees term loan during the period itself. The above loans are hedged by forward contracts here is no foreign currency exposure outstanding as at the Balance Sheet date (Previous year Rs. Nil).

(b) Particulars of un-hedged foreign currency exposures as at the Balance Sheet date are Rs. Nil (Previous year Rs. Nil).

9. There are no present obligations requiring provision in accordance with the guiding principles as enunciated in Accounting Standard AS-29 as it is not probable that an outflow of resources embodying economic benefit will be required.

10. Previous period figures have been regrouped and recasted wherever considered necessary. However, the same are not strictly comparable as the previous period figures are for the period from 01.10.2012 to 30.09.2013 whereas the current period figures are for the period from 01.10.2013 to 31.03.2015.

11 Related party disclosures as required by Accounting Standard AS-18 for the eighteen months period ended 31st March,2015

a) Names of the related parties and description of relationship:

i) Enterprises over which key management personnel are able to exercise significant influence

-Morarka Finance Limited -Dwarikesh Trading Company Limited -Dwarikesh Informatics Limited -Dwarikesh Agriculture Research Institute -Faridpur Sugars Limited (Associate Company)

ii) Key Management Personnel

-Shri G.R.Morarka Managing Director

-Shri B.J.Maheshwari Whole-time Director & Company Secretary

Cum Chief Compliance Officer

-Shri Vijay S. Banka Whole -time Director & Chief Finance Officer

iii) Relatives of Key Managerial Personnel Shri G.R.Morarka

-Smt. Smriti G. Morarka (Wife) -Ms. Priyanka G. Morarka (Daughter)

-Shri Pranay G. Morarka (Son)


Sep 30, 2013

A) Equity Shares:- The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, If any is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

b) Preference Shares:- 12% cumulative redeemable preference shares (Series I):

1,10,000, 12% cumulative redeemable preference shares of Rs. 100 each were issued in September 1998. These preference shares were to be redeemed at par in September, 2011 which has been extended to September, 2014 by virtue of the resolution passed in the committee of preference share holders meeting held on 28th July, 2011 and the consent obtained from the concerned shareholders.

c) cumulative redeemable preference shares (Series II):

15,00,000, 8% cumulative redeemable preference shares of Rs. 100 each were issued in August, 2007. These preference shares were to be redeemed at par in August, 2012, which has been extended to August, 2015 by virtue of consent obtained from the concerned shareholders.

d) cumulative redeemable preference shares (Series III):

10,00,000, 8% cumulative redeemable preference shares of Rs. 100 each were issued in October 2012. These preference shares shall be redeemed at par in September, 2017.

e) cumulative redeemable preference shares (Series IV):

5,00,000, 8% cumulative redeemable preference shares of Rs. 100 each were allotted in April 2013. These preference shares shall be redeemed at par in March, 2018.

D Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of fve years immediately preceding the reporting date.-Nil

GENERAL INFORMATION

Dwarikesh Sugar Industries Limited (DSIL) is a public limited company domiciled in India and was incorporated in the year 1993 under the provisions of the Companies Act,1956.

Currently equity shares of the company are listed at BSE and NSE.

DSIL is integrated conglomerate, primarily engaged in manufacture of sugar and allied products. From a humble beginning in 1993, DSIL today is a multi faceted, fast growing industrial group with the strong presence in diversifed felds such as sugar manufacturing, power and Ethanol/Industrial Alcohol production.

The Company has three sugar manufacturing units, out of which 2 units namely Dwarikesh Nagar and Dwarikesh Puram are located in Bijnor District of Uttar Pradesh ( U.P.) and one unit namely Dwarikesh Dham in Bareilly District (U.P.).

Registration details

Registration No. CIN No. L15421 UP1993 PLC 018642 State code 20

Generic name of principal product of the Company

Item code No.(ITC Code) 170111.09 Product Description Cane Sugar


Sep 30, 2012

A Rights & restrictions attached to various classes of shares are as under:

a) Equity Shares:-

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, If any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

b) Preference Shares:-

12% cumulative redeemable preference shares (Series I):

1.10.000, 12% cumulative redeemable preference shares of Rs. 100 each were issued in September 1998. These preference shares were to be redeemed at par in September,2011 which has been extended to September,2014 by virtue of the resolution passed in the committee of preference share holders meeting held on 28th July,2011 and the consent obtained from the concerned shareholders.

8% cumulative redeemable preference shares (Series II):

1.500.000, 8% cumulative redeemable preference shares of Rs. 100 each were issued in August,2007. These preference shares were to be redeemed at par in August,2012,which has been extended to August,2015 by virtue of consent obtained from the concerned shareholders.

* There are no outstanding amounts payable beyond the agreed period to Micro, Small and Medium enterprises as required by MSMED Act, 2006 as on the Balance Sheet date to the extent such enterprises have been identified based on information available with the company . In view of this there is no overdue interest payable.

* Includes Rs. 23,30,519 (previous year Rs. 23,30,519) representing sales tax and interest thereon paid as a matter of abundant caution under protest under applicable Trade & Sales tax Act, based on the enquiry made on the company by Uttar Pradesh Trade tax authorities in respect of diesel, steel and cement provided to contractors/ sugar cane transporters during the years 1997-98 to 2000-2001.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. The issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any provision.

* a) Includes Rs. 3,60,67,063 (previous year Rs. 6,79,99,320) being the amount received towards surrender of export entitlement of sugar in favour of third parties.

b) Includes Rs. 1,08,64,146 (previous year Rs. 1,74,94,659) being the amount received from sale of Carbon Emission Reductions (CERs).

* Accounting for cane purchase liability for the sugar season 2007-08 was done in the accounting year ended 30th September, 2008 at Rs. 110 per quintal based on earlier interim order of the Hon''ble Allahabad High Court (subsequently upheld by Hon''ble Supreme Court pending final decision) instead of State Advised Price (SAP) of Rs. 125 per quintal fixed by the Uttar Pradesh Government. Subsequently, Hon''ble Supreme Court , vide order dated 17th January,2012 ordered payment of the balance amount up to SAP within 3 months from the date of the said order. Accordingly, the differential cane price amounting to Rs. 22,68,64,473 (previous year Rs. Nil) has now been provided during the period under the head Raw material consumed. This amount has subsequently been paid in April,2012

* Includes provision for wealth tax of Rs. 4,33,115 for the Assessment year 2012-13 (previous year Rs. 3,77,102) as per the provisions of Wealth Tax Act, 1957 and provision for Fringe Benefit Tax pertaining to earlier years Rs. (61,575) (previous year Rs. 6,261)

NOTES ANNEXED TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2012 NOTE "28 A"

GENERAL INFORMATION

Dwarikesh Sugar Industries Limited (DSIL) is a public limited company domiciled in India and was incorporated in the year 1993 under the provisions of the Companies Act, 1956.

Currently equity shares of the company are listed at BSE and NSE.

DSIL is integrated conglomerate, primarily engaged in manufacture of sugar and allied products. From a humble beginning in 1993, DSIL today is a multi faceted, fast growing industrial group with the strong presence in diversified fields such as sugar manufacturing, power and Ethanol/Industrial Alcohol production.

The Company has three sugar manufacturing units, out of which 2 units namely Dwarikesh Nagar and Dwarikesh Puram are located in Bijnor District of Uttar Pradesh ( U.P.) and one unit namely Dwarikesh Dham in Bareilly District (U.P).

Registration details

Registration No. CIN No. L15421 UP1993 PLC 018642 State code 20

Generic name of principal product of the Company

Item code No.(ITC Code) 170111.09 Product Description Cane Sugar

1. Contingent liabilities not provided for

Particulars As at As at 30th Sept'' 12 30th Sept'' 11

(a) Claims not acknowledged as debts by the company 20,76,408 20,76,408

(b) In respect of show cause notices from Central Excise department in various 3,33,78,481 3,43,43,578 cases against which the company has preferred appeals ( net of amounts reversed and payments of Rs. 2,29,14,802 previous year Rs. 2,18,13,893).

(c) In respect of Trade Tax and Entry Tax demand received from Uttar Pradesh Nil 1,02,62,361 Trade Tax authorities in various cases, in respect of which the company has preferred appeals (net of amount deposited under appeal of Rs. 25,85,075 previous year Rs. 25,67,983).

2. a) Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs. 2,74,52,015 (previous year Rs. 2,63,76,597) and not provided for is Rs. 1,31,43,996 (previous year Rs. 1,91,12,573). Other Commitments Rs. Nil (previous year Rs. Nil).

3. Aggrieved by the Order of the Directorate of Sugar, Government of India, converting un-lifted quantity of non- levy sugar of 1,77,403 quintals into levy, the company filed a writ petition with the Hon''ble Allahabad High Court. Hon''ble High Court upheld the Order of the Directorate of Sugar. The company filed SLP with the Hon''ble Supreme Court of India and the order of the Directorate of Sugar in the interim stands stayed. The company has obtained legal opinion and is advised that the order of the Directorate of Sugar is in contravention of the provisions of applicable laws and is therefore liable to be struck down. Pending disposal of the SLP, liability arising on account of the said Order, if any, has therefore not been provided.

Note: * Excludes Nil Qtls (previous year 4,040 Qtls) of brown sugar use internally for reprocessing in to white sugar.

** Excludes 1,59,510 Qtls (previous year 1,73,817 Qtls) molasses used internally for manufacturing of Industrial Alcohol in Distillery.

*** Excludes 6,16,594 Ltrs (previous year Nil ) spirit used internally manufacturing of Ethanol in Distillery.

Note: The quantities are net of:

* 489 Qtls (Previous year 787 Qtls) normal losses.

** 14,128 Ltrs (Previous year 11,438 Ltrs) normal losses and use from SDS solution.

*** 6,683 Ltrs gains (Previous year Nil Ltrs normal losses).

4. a) The company has made provision for gratuity and leave encashment in the nature of defined benefit obligation on the basis of actuarial valuation as per Accounting Standard AS-15. Since the liability has not been funded through a Trust or Insurer, there are no plan assets.

b) i) Defined Contribution Plans :

Employer''s Contribution to Provident Fund Rs. 2,62,25,374 (previous year Rs. 2,37,32,860)

ii) Defined Benefits Plans :

Liability for Gratuity is determined on actuarial basis using projected unit credit method. The details are as under:

5. Trade Receivable/Payables and Loans and Advances balances are subject to confirmation and reconciliation.

6. As per the Accounting Standard AS-28 ''Impairment of Assets'', the company has tested impairment to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the period.

7 As per requirement of revised Schedule VI , provision of Wealth Tax and Fringe Benefit Tax (FBT) are considered in other expenditure. Accordingly, provision made for Wealth Tax and FBT amounting to Rs. 3,77,102 and Rs. (61,575) respectively earlier shown as Tax Expenses during the previous year have now been reclassified under the head "Other Expenses," which has resulted in change in profit before tax of the previous year to that extent. However, there is no change in Profit after tax.

8 Income from sale of CER , penalty received from customers on late lifting of sugar and amount received towards surrender of export entitlement of sugar in favour of third parties , earlier being shown as " Other Income" ,have now been reclassified under the head "Other Operating Income". This has resulted in change in the sales and other income of the previous year to that extent.

9 The company has not taken/given any assets on finance/ operating lease. Accordingly, Accounting Standard AS- 19 on leases is not applicable. The company has taken various office/ residential premises and office equipments on cancellable leases which are renewable on expiry of the respective lease period.

10 Society commission on purchase of sugar cane amounting to Rs. 4,82,12,723 for the period February, March and April 2012 has not been provided in view of anticipated relief/reduction in the same from the State Government based on the representation made by UPSMA. The liability, if any towards the same, will be provided in future depending on the decision of the State Government in this regard.

11 The financial statements for the year ended September 30, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended September 30, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements.

12 Derivative instruments and foreign currency exposures:

(a) There is no foreign currency exposure outstanding as at the Balance Sheet date (Previous year Rs. Nil).

(b) Particulars of un-hedged foreign currency exposures as at the Balance Sheet date are NIL (Previous year Rs. Nil).

13 There are no present obligations requiring provision in accordance with the guiding principles as enunciated in Accounting Standard (AS)-29 as it is not probable that an outflow of resources embodying economic benefit will be required.


Sep 30, 2011

1 SECURITIES FOR SECURED LOANS:

a) Term Loans from IDBI Bank Limited (IDBI) of Rs 3,299.17 lacs are secured as under:

- Term Loan of Rs 2,000 lacs is secured by (i) paripassu first charge on movable and immovable fixed assets ( both present and future ) of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly , Uttar Pradesh (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) paripassu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term Loan of Rs 1,200 lacs is secured by (i) paripassu first charge on movable and immovable fixed assets ( both present and future ) of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh (ii) paripassu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term loan of Rs 99.17 lacs under the Government''s Scheme for Extending Financial Assistance to Sugar Undertakings 2007 is secured by residual pari-passu charges on movable & immovable fixed assets of (i) Unit -I Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-II Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) Unit-III Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh .

b) Term Loans from Punjab National Bank (PNB) of Rs 30,396.17 lacs (including term loan in foreign currency equivalent to Rs 25,000 lacs) are secured as under:

- Term loan of Rs 7,100 lacs Rs 6,000 lacs converted in foreign currency loan) is secured by (i) First charge on block assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh (present & future) by way of hypothecation of machinery & equipment and other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh,(ii) Second paripassu charge on block of fixed assets of the unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third paripassu charge on block of fixed assets of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

- Term loan of Rs 7,200 lacs Rs 6,000 lacs converted in foreign currency loan) is secured by (i) Paripassu first charge on block of assets, (both present and future ) by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh, ii) second paripassu charge on entire block of fixed assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third pari passu charge on entire block assets of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term loan of Rs 1,200 lacs is secured by (i) paripassu first charge on specific immovable & movable fixed assets by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh pertaining to 24 MW Co-generation plant,(ii) second paripassu charge on entire block of fixed assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third paripassu charge on block of fixed assets of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

All the term loans of PNB mentioned above are also secured by second paripassu charge on current assets of the company.

- Term loan of Rs 4,500 lacs Rs 4,000 lacs fully converted in foreign currency loan) is secured by (i) paripassu first charge on entire block assets of Dwarikesh Nagar unit by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh ,ii) paripassu second charge on entire block of fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and iii) paripassu second charge on entire block of fi xed assets of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

- Corporate loan of Rs 10,000 lacs Rs 9,000 lacs converted in foreign currency loan) is secured by paripassu first charge on movable & immovable fixed assets of (i) Unit -I Dwarikesh Nagar, Village Bundki and Rajpura, Post offi ce Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-II Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iii) Unit -III Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh of the Company.

- Term loan of Rs 396.17 lacs under Government''s Scheme for Extending Financial Assistance to Sugar Undertakings, 2007 is secured by residual paripassu charges on movable & immovable fixed assets of (i) Unit -I Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-II Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iii) Unit-III Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh of the Company.

c) Interest free trade tax loan of Rs 63.88 lacs from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by (i) second paripassu charge on Company''s immovable properties situated at village Bundki and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh. The loan amount is repayable at the end of 5 years from the respective year of collection.

d) Term Loan from Sugar Development Fund (SDF) of rs 5,548.86 are secured as under:

- Term Loan of Rs 2,458.54 lacs is secured by (i) first pari passu charge by way of equitable mortage on immovable properties and by way of hypothecation on movable properties situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh,

- Term Loan of Rs 2,565.32 lacs is secured by (i) first paripassu charge by way of equitable mortage on immovable properties and by way of hypothecation on movable properties situated at Dwarikesh Puram, village: Bhadarpur, Tehsil: Dhampur , District Bijnor, Uttar Pradesh.

- Two short term loans of Rs 187.50 lacs each and one short term loan of Rs 150 Lacs are secured by bank guarantees of Rs 275 lacs each and Rs. 220 lacs respectively aggregating to Rs 770 lacs.

All the term loans mentioned above at a & b are also personally guaranteed by the Chairman & Managing Director of the Company. The company has given counter guarantee to him to secure all these personal guarantees (excluding personal guarantee for corporate loan of PNB),

e) Cash credit balances of Rs 7,118.00 lacs from Punjab National Bank, IDBI Bank Limited and Sarva U.P.Gramin Bank are secured by (i) hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares,( Cash Credit balance of Rs 6,119.77 lacs from Punjab National Bank and Sarva U.P. Gramin Bank is additionally secured by way of pledge of stock of sugar, molasses, chemicals , stores & spares) (ii) second charge on block assets immovable and movable , both present and future, of Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (iii) second charges on block assets immovable & movable, both present & future, of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iv) second charges on block assets immovable & movable, both present & future, of Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

The cash credit facilities are also personally guaranteed by the Chairman & Managing Director of the Company. The company has given counter guarantee to him to secure these personal guarantees (excluding personal guarantee given to Sarva U.P.Gramin Bank).

2. As at As at 30th sep''11 30th sep''10 Rs Rs

Contingent liabilities not provided for

(a) Claims not acknowledged as debts by the company 2,076,408 2,076,408

(b) In respect of show cause notices from Central Excise department in various cases against which the company has preferred appeals ( net of amounts reversed and payments of Rs 21,813,893/-, previous year Rs 21,279,702/-) 34,343,578 32,076,230

(c) In respect of Trade Tax and Entry Tax demand received from Uttar Pradesh Trade Tax authorities in various cases, in respect of which the company has preferred appeals (net of amount deposited under appeal of Rs 2,567,983/ -, previous year Rs 2,499,584/-). 10,262,361 2,702,735

(d) Bank Guarantees given by company''s bankers to third parties Nil 200,000

3. Dividend not provided for on cumulative preference shares Rs 26,640,000/- (previous year Rs 13,320,000/-)

4. Additional information pursuant to Paragraphs 3 & 4 of Part II, Schedule VI, of the Companies Act, 1956.

Note: * Excludes 4,040 Qtls. (previous year 2,782 Qtls.) of brown sugar used internally for reprocessing in to white sugar.

Excludes 173,817 Qtls. (previous year 152,086 Qtls.) molasses used internally for manufacturing of Industrial Alcohol in Distillery.

Excludes Nil Ltrs. (previous year 543,306 Ltrs.) spirit used internally for manufacturing of Ethanol in Distillery.

Excludes Nil Ltrs. (previous year 513,209 Ltrs.) ethanol used internally for conversion in spirit.

Note: The quantities are net of:

787 Qtls. (Previous year 2,810 Qtls.) normal losses.

11,438 Ltrs. (Previous year 7,831 Ltrs.) normal losses and use from SDS solution.

Nil Ltrs. (Previous year 3,882 Ltrs.) normal losses.

Note: Figures in the bracket are for the previous year ended on 30th September, 2010.

5. Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs 253.17 lacs (previous year Rs 27.82 lacs) and not provided for is Rs 191.12 lacs (previous year Rs 203.70 lacs).

6. Auditor''s remuneration charged to accounts:

7. Loans and Advances include Rs 2,330,519/- representing sales tax and interest thereon paid as a matter of abundant caution under protest under applicable Trade & Sales tax Act, based on the enquiry made on the company by Uttar Pradesh Trade tax authorities in respect of diesel, steel and cement provided to contractors/ sugar cane transporters during the years 1997-98 to 2000-2001.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. The issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any provision.

8. The company has not taken any assets on finance/ operating lease. Accordingly, Accounting Standard AS-19 on leases is not applicable. The company has taken various office/ residential premises and office equipments on cancelable leases which are renewable on expiry of the lease period.

9 The company is governed by the provisions of section 115 JB of the Income Tax Act, 1961 and provision for income tax has been made accordingly. The company has considered MAT credit entitlement for MAT paid for earlier financial years based on virtual certainty of sufficient future taxable income available against which the tax credit will be utilized. To the extent of MAT credit entitlement not considered available for set off in future of Rs.12,829,134/- has been reversed.

The provision for Income Tax for the period is the aggregate of the provision made for the six months ended 31st March, 2011 and the estimated provision based on the taxable income earned for the six months upto 30th September,2011, the ultimate liability of which will be determined on the basis of the income for the period from 1st April,2011 to 31st March, 2012.

Provision for wealth tax of Rs 377,102/- has been made for the Assessment year 2011-12 as per the provisions of Wealth Tax Act, 1957.

10 The Company, in compliance of the interim order passed by the Hon''ble High Court of Allahabad (Lucknow Bench) on the 15th November''2007, has paid a price of Rs. 110/- per quintal for sugar cane purchased and accordingly accounted for the liability for sugar season 07-08. However, The High Court of Allahabad, by a subsequent order dated 7th July''2008, upheld the validity of SAP of Rs. 125/- per quintal announced by the State Government. Aggrieved by the said order, the UPSMA filed SLP with Hon''ble Supreme Court of India. Hon''ble Supreme Court, in the interim, upheld that the sugar cane purchased by the sugar mills would continue to be paid for @ Rs. 110/- per quintal. In view of the above, differential liability, if any, will be accounted as and when the matter is finally settled. However, for seasons 2008-09, 2009-10 and 2010-11, the company has paid and accounted for the cane price at SAP announced by the State Government.

11. Aggrieved by the Order of the Directorate of Sugar, Government of India, converting un-lifted quantity of non- levy sugar of 177,403 quintals into levy, the company filed a writ petition with the Hon''ble Allahabad High Court. Hon''ble High Court upheld the Order of the Directorate of Sugar. The company filed SLP with the Hon''ble Supreme Court of India and the order of the Directorate of Sugar in the interim stands stayed. The company has obtained legal opinion and is advised that the order of the Directorate of Sugar is in contravention of the provisions of applicable laws and is therefore liable to be struck down. Pending disposal of the SLP, liability arising on account of the said Order, if any, has therefore not been provided.

12. a) 12% Redeemable Preference Shares of Rs. 100/- each were redeemable in September 2011 . The redemption has been extended to September, 2014 by virtue of the resolution passed in the Board meeting and the consent obtained from the concerned shareholder.

b) 8% Redeemable Cumulative Preference Shares of Rs 100/-each are redeemable at par in August 2012.

13. a) The company has made provision for gratuity and leave encashment in the nature of defined benefit obligation on the basis of actuarial valuation as per revised AS-15. Since the liability has not been funded through a Trust or Insurer, there are no plan assets.

b) i) Defined Contribution Plans :

Employer''s Contribution to Provident Fund Rs 237.33 lacs (previous year Rs 201.72 lacs)

14. Capital Redemption Reserve represents reserve created on account of:

a) Buy-back of Equity Shares in the year 2000-2001 in terms of provisions of section 77A of the Companies Act, 1956.

b) Redemption of 500,000 11% preference shares of Rs. 100/- each amounting to Rs. 50,000,000/- in terms of section 80 of the Companies Act, 1956.

15. Sundry creditors-others in Schedule 8 include Rs. 1,038,101/- (previous year Rs. 1,073,335/-) on account of unpaid dividends/fixed deposits. However, there are no amounts outstanding in respect of unpaid dividend /fixed deposits included under sundry creditors in Schedule 8, for more than seven years to be transferred to Investor Education and Protection Fund.

16. Capital raising expenditure written off during the year Rs. Nil (previous year Rs. 3,011,128/-) represents proportionate expenses incurred in placement of GDR (net of income realized during the course of placement).

17. Miscellaneous income includes Rs 67,999,320 (previous year Nil) being the amount received towards surrender of export entitlement of sugar in favour of third parties.

18. Sundry Debtors/Creditors and Loans and Advances balances are subject to confirmation and reconciliation.

19. There are no outstanding amount payable beyond the agreed period to Micro, Small and Medium enterprises as required by MSMED Act, 2006 as on the Balance Sheet date to the extent such enterprises have been identified based on information available with the company . In view of this there is no overdue interest payable.

20. As per the Accounting Standard AS-28 Impairment of Assets, the company has tested impairment of fixed assets to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the period.

21. During the year Rupee term loans of Rs 25,000 lacs were converted into foreign currency loan of USD 55,985,274.32. The above loans are hedged by forward contracts. There are no other foreign currency exposures.

22. During the year, company has divested 60% stake (30,000 equity shares of Rs. 10 each) in its wholly owned Subsidiary viz. Faridpur Sugars Limited (FSL) which was formed on 9th February,2010. Therefore FSL is now no more a subsidiary company of Dwarikesh Sugar Industries Limited. FSL has not commenced any business activities.

23. Figures for the previous year have been regrouped / reclassified, wherever necessary.

24. Segment information for the year ended 30th Sept, 2011

(i) Information about Primary Business segment

(ii) The company does not have any Secondary Business Segment since there were no export during the year and all the manufacturing facilities are located in India.


Sep 30, 2010

1 A. SECURITIES FOR SECURED LOANS:

a) Term Loans from IDBI Bank Limited (IDBI) ofRs 4,916.67 lacs are secured as under:

- Term loan ofRs 3,000 lacs is secured by (i) pari passu first charge on movable and immovable fixed assets ( both present and future ) of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly , Uttar Pradesh (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term loan ofRs 1,520 lacs is secured by (i) pari passu first charge on movable and immovable fixed assets ( both present and future ) of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term loan ofRs 396.67 lacs under the Governments Scheme for extending Financial Assistance to Sugar Undertakings 2007 is secured by residual pari-passu charges on movable & immovable fixed assets of (i) UnitRsI Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-II Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) Unit-III Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh .

b) Term loans from punjab national Bank (PNB) ofRs 21,584.67 lacs (including term loan in foreign currency equivalent toRs 17,000 lacs) are secured as under:

- Term loan ofRs 7,100 lacs (Rs 5,500 lacs converted in foreign currency loan) is secured by (i) First charge on block assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh (present & future) byway of hypothecation of machinery & equipment and other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh,(ii) Second pari passu charge on block of fixed assets of the unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District. Bijnor, Uttar Pradesh and (iii) third pari passu charge on block of fixed assets of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

- Term loan ofRs 7,200 lacs (- 5,800 lacs converted in foreign currency loan) is secured by (i) Pari passu first charge on block of assets, (both present and future) byway of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh, ii) second pari passu charge on entire block of fixed assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third pari passu charge on entire block assets of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term loan ofRs 1,200 lacs (fully converted in foreign currency loan ) is secured by (i) pari passu first charge on specific immovable & movable fixed assets by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh pertaining to 24 MW Co-generation plant,(ii) second pari passu charge on entire block of fixed assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third pari passut charge on block of fixed assets of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

All the term loans of PNB mentioned above are also secured by second pari passu charge on current assets of the company.

- Term loan ofRs 4,500 lacs (fully converted to foreign currency loan) is secured by (i) pari-passu first charge on entire block assets of Dwarikesh Nagar unit by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) pari passu second charge on entire block of fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iii) pari passu second charge on entire block of fixed assets of unit situated at at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

- Term loan ofRs 1,584.67 lacs under Governments Scheme for extending Financial Assistance to Sugar Undertakings, 2007 is secured by residual pari-passu charges on movable & immovable fixed assets of (i) unitRsI Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-II Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh of the Company.

c) Interest free trade tax loan ofRs 79.69 lacs (includingRs 11.10 lacs added during the year) from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by (i) second pari-passu charge on Companys immovable properties situated at village Bundki and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) and (ii) second pari passu charge byway of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh. the loan amount is repayable at the end of 5 years from the respective year of collection.

d) Term loan from Sugar Development Fund (SDF) ofRs 5,723.86 are secured as under:

- Term loan ofRs 2,458.54 lacs is secured by (i) first pari passu charge by way of equitable mortage on immovable properties and by way of hypothecation on movable properties situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh,

- Term loan ofRs 2,565.32 lacs is secured by (i) first pari passu charge by way of equitable mortage on immovable properties and by way of hypothecation on movable properties situated at Dwarikesh Puram, village: Bhadarpur, Tehsil: Dhampur , District Bijnor, Uttar Pradesh

- Two short term loans ofRs 250 lacs each and one short term loan ofRs 200 lacs are secured by bank guarantees ofRs 275 lacs each andRs 220 lacs respectively aggregating toRs 770 lacs(Refer point no 2 (d) under contingent liabilities).

All the term loans mentioned above at a & b are also personally guaranteed by the Chairman & Managing Director of the Company. the company has given counter guarantee to him to secure these personal guarantees

e) Cash credit balances ofRs 7,426.02 lacs from Punjab National Bank and IDBI Bank Limited are secured by (i) hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares,( Cash Credit balance ofRs 7,426.47 lacs from Punjab national Bank additionally secured by way of pledge of stock of sugar, molasses, chemicals , stores & spares) (ii) second charge on block assets immovable and movable, both present and future, of Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (iii) second charges on block assets immovable & movable, both present & future, of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iv) second charges on block assets immovable & movable, both present & future, of Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

The cash credit facilities are also personally guaranteed by the Chairman & Managing Director of the Company. the company has given counter guarantee to him to secure these personal guarantees.

B. SECURITIES FOR UNSECURED LOANS:

2. Dividend not provided for on cumulative preference shares-Rs 13,320,000/- (previous year-nil)

3 Additional information pursuant to Paragraphs 3 & 4 of Part II, Schedule VI, of the Companies Act, 1956.

(A) Particulars of Capacity, Production, Stock and Turnover

* During current year receipt in foreign currency from sale of CERs Rs 12,743,414, out of which Rs 5,501,113 accrued and provided for as income in the previous year.

Note: Figures in the bracket are for the previous year.

4. Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs 27.82 lacs (previous year nil) and not provided for is Rs 203.70 lacs (previous year Rs 34.90 lacs).

5. Loans and Advances includeRs 2,330,519/- representing sales tax and interest thereon paid as a matter of abundant caution under protest under applicable Trade & Sales tax Act, based on the enquiry made on the company by Uttar Pradesh trade tax authorities in respect of diesel, steel and cement provided to contractors/ sugar cane transporters during the years 1997-98 to 2000-2001.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. the issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any provision.

6. The company has not taken any assets on finance/ operating lease. Accordingly, Accounting Standard AS-19 on leases is not applicable. The company has taken various office/ residential premises and office equipments on cancelable leases which are renewable on expiry of the lease period.

7 The company is governed by the provisions of section 115 JB of the Income Tax Act, 1961 and provision for income tax has been made accordingly. the company has considered MAT credit entitlement for MAT paid for the current financial year and earlier financial years based on virtual certainty of sufficient future taxable income available against which the tax credit will be utilized.

The provision for Income Tax for the period is the aggregate of the provision made for the six months ended 31st March, 2010 and the estimated provision based on the taxable income earned for the six months upto 30th September,2010, the ultimate liability of which will be determined on the basis of the income for the period from 1st April,2010 to 31st March, 2011.

Provision for wealth tax ofRs 384,778/- has been made for the Assessment year 2010-11 as per the provisions of Wealth tax Act, 1957.

8. Deferred tax asset & liability are attributable to the following items:

Deferred tax assets in respect of brought forward losses and depreciation have been recognized owing to virtual certainty of availability of future taxable income to realize such assets.

9 The Company, in compliance of the interim order passed by the honble high Court of Allahabad (Lucknow Bench) on the 15th november2007, has paid a price ofRs 110/- per quintal for sugar cane purchased and accordingly accounted for the liability for sugar season 07-08. however, the high Court of Allahabad, by a subsequent order dated 7th July2008, upheld the validity of SAP ofRs 125/- per quintal announced by the State Government. Aggrieved by the said order, the UPSMA filed SLP with Honble Supreme Court of India. Honble Supreme Court, in the interim, upheld that the sugar cane purchased by the sugar mills would continue to be paid for @Rs 110/- per quintal. In view of the above, differential liability, if any, will be accounted as and when the matter is finally settled. However, for seasons 2008-09 and 2009-10, the company has paid and accounted for the cane price at SAP announced by the State Government.

10 Aggrieved by the Order of the Directorate of Sugar, Government of India, converting Un- lifted quantity of non-levy sugar of 177,403 quintals into levy, the company filed a writ petition with the Honble Allahabad High Court.Honble High Court upheld the Order of the Directorate of Sugar. The company filed SLP with the Honble Supreme Court of India and the order of the Directorate of Sugar in the interim stands stayed. The company has obtained legal opinion and is advised that the order of the Directorate of Sugar is in contravention of the provisions of applicable laws and is therefore liable to be struck down. pending disposal of the SLP, liability arising on account of the said order, if any, has therefore not been provided.

11. a) 12% Redeemable preference Shares of- 100/- each are redeemable at par in September 2011.

b) 8% Redeemable Cumulative preference Shares ofRs 100/- each are redeemable at par in August 2012.

12. a) The company has made provision for gratuity and leave encashment in the nature of defined benefit obligation on the basis of actuarial valuation as per revised AS-15. Since the liability has not been funded through a Trust or Insurer, there are no plan assets.

b) i) Defined Contribution Plans: employers Contribution to provident FundRs 201.72 lacs (previous yearRs 157.48 lacs)

13. Capital Redemption Reserve represents reserve created on account of:

a) Buy-back of Equity Shares in the year 2000-2001 in terms of provisions of section 77A of the Companies Act, 1956.

b) Redemption of 500,000 11% preference shares ofRs 100/- each amounting toRs 50,000,000/- in terms of section 80 of the Companies Act, 1956.

14. Sundry creditors-others in Schedule 8 includeRs 1,073,335/- (previous yearRs 593,796/-) on account of unpaid dividends/fixed deposits. However, there are no amounts outstanding in respect of unpaid dividend /fixed deposits included under sundry creditors in Schedule 8, for more than seven years to be transferred to Investor education and protection Fund.

15. Capital raising expenditure written off during the yearRs 3,011,128/- (previous yearRs 3,011,120/-) represents proportionate expenses incurred in placement of GDR (net of income realized during the course of placement).

16. Sundry Debtors/Creditors and Loans and Advances balances are subject to confirmation and reconciliation.

17. Sundry creditorsRs others include short term loan ofRs 5,000 lacs by IDBI Bank Limited (Previous year Nil) to farmers, wherein the company is acting as a managing agent. Short term loan is collaterally backed by personal guarantee of the Chairman & Managing Director of the company.

18. There are no outstanding amount payable beyond the agreed period to Micro, Small and Medium enterprises as required by MSMED Act, 2006 as on the Balance Sheet date to the extent such enterprises have been identified based on information available with the company . In view of this there is no overdue interest payable.

19. As per the Accounting Standard AS-28 Impairment of Assets, the company has tested impairment of fixed assets to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the year.

20. During the year Rupee term loans of Rs 17,000 lacs were converted into foreign currency loan of USD 36,600,216.80. the above loans are hedged by forward contracts. there are no other foreign currency exposures.

21. A wholly owned Subsidiary Viz.Faridpur Sugars limited (FSl) was formed on 9th February, 2010. FSl has not yet started any commercial operations.

22. Figures for the previous year have been regrouped / reclassified, wherever necessary.

23. Segment information for the year ended 30th September, 2010 Revenue in respect of captive power produced from Co generation plant has been arrived at based on the rates at which the same is being supplied to State electricity Board.

(ii) the company does not have any Secondary Business Segment since there were no export during the year and all the manufacturing facilities are located in India.


Sep 30, 2009

1 SECURITIES FOR SECURED LOANS:

a) Term Loans from IDBI Bank Limited (IDBI) of Rs.6,794 lacs are secured as under:

% Term Loan of Rs 99 lacs is secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts), situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) pari passu first charge by way of equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii)paripassu second charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

2 Term Loan of Rs 4,500 lacs is secured by (i) pan passu first charge on movable and immovable fixed assets (both present and future) of unit situated at Dwarikesh Dham, Village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

Term Loan of Rs 1,600 lacs is secured by (i) pari passu first charge on movable and immovable fixed assets (both present and future) of unit situated at Dwarikesh Dham, Village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

Term loan of Rs. 595 lacs under the Governments Scheme for Extending Financial Assistance to Sugar Undertakings 2007 is secured by residual pari-passu charges on movable & immovable fixed assets of (i) Unit -I Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit- II Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) Unit- Ill Dwarikesh Dham, Village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

b) Term Loans from Punjab National Bank (PNB) of Rs. 27,916.84 lacs (including term loan in foreign currency equivalent to Rs 24,196 lacs) are secured as under:

C Term loan of Rs. 90 lacs is secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) on entire block assets of Dwarikesh Nagar, Village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh, and (ii) equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh

Term loan of Rs. 7,200 lacs (including term loan in foreign currency equivalent to Rs 7,100 lacs) is secured by (i) First charge on block assets of unit situated at Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh (present & future) by way of hypothecation of machinery & equipment and other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (ii) Second pari passu charge on block assets of the unit situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh.

Term loan of Rs. 8,459.90 lacs (including term loan in foreign currency equivalent to Rs 8,396 lacs) is secured by (i) Pari passu first charge on block of assets (both present and future), by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties of unit situated at Dwarikesh Dham, Village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh, ii) second pari passu charge on entire block assets of Dwarikesh Nagar, Village Bundki and Rajupura,

Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third pari passu charge on entire block assets of Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

It Term loan of Rs. 5,039.94 lacs (including term loan in foreign currency equivalent to Rs 4,200 lacs) is secured by (i) pari passu first charge on specific immovable & movable fixed assets by way of hypothecation of machinery, equipment and otherfixed assets and equitable mortgage on immovable properties situated at Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh pertaining to 24 MW Co-generation plant, and (ii) second pari passu charge on entire block assets of Dwarikesh Nagar, Village Bundki and Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh.

All the term loans of PNB mentioned above are also secured by second pari passu charge on current assets of the company.

C Term loan of Rs. 2,377 lacs under Governments Scheme for Extending Financial Assistance to Sugar Undertakings, 2007 is secured by residual pari passu charges on movable & immovable fixed assets of (i) unit -I Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-ll Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) Dwarikesh Dham, Village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh of the Company.

C Term loan of Rs. 4,750 lacs (including term loan in foreign currency equivalent to Rs 4,500 lacs) is secured by (i) pari passu first charge on entire block assets of Dwarikesh Nagar unit by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) pari passu second charge charge on entire block assets of unit situated at Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and iii) Pari Passu second charge on entire block assets unit situated at at Dwarikesh Dham, Village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

c) Interest free trade tax loan of Rs. 97.26 lacs (including Rs. 22.76 lacs added during the year) from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by (i) second pari passu charge on Companys immovable properties situated at Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh. The loan amount is repayable at the end of 5 years from the respective year of collection.

d) Loan from Sugar Development Fund of Rs. 2,458.54 lacs is secured by (i) first pari passu charge by way of equitable mortage on immovable properties and by way of hypothecation on movable properties situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

All the term loans mentioned at above (a to c) are also personally guaranteed by the Chairman & Managing Director of the Company. The company has given counter guarantee to him to secure these personal guarantees.

e) Cash credit balances of Rs. 6,433.28 lacs from Punjab National Bank and IDBI Bank Limited are secured by (i) hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares, (Cash Credit balance of Rs 4,453.73 lacs from Punjab National Bank additionally secured by way of pledge of stock of sugar, molasses, chemicals, stores & spares) (ii) second charge on block assets immovable and movable , both present and future, of Dwarikesh Nagar, Village Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (iii) second charges on block assets immovable & movable, both present & future, of Dwarikesh Puram, Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iv) second charges on block assets immovable & movable, both present & future, of Dwarikesh Dham, Village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

The cash credit facilities are also personally guaranteed by the Chairman & Managing Director of the Company. The company has given counter guarantee to him to secure these personal guarantees

As at As at 30th Sep 09 30th Sep 08

3. Contingent liabilities not provided for

(a)In respect of show cause notices from Central Excise department in various 18,288,154 10,503,596 cases against which the company has preferred appeals.

(b) In respect of Trade Tax and Entry Tax demand received from Uttar 5,545,116 3,212,316 Pradesh Trade Tax authorities in various cases, in respect of which the company has preferred appeals (net of amount deposited under appeal of Rs.2,499,584/-, previous year Rs.2,499,584/-).

(c) Bank Guarantees given to Pollution Control Board and Petroleum 3,392,800 3,560,000 Companies.

4. Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs. Nil (previous year Rs. Nil) and not provided for is Rs.34.90 lacs (previous year Rs. 140.50 lacs).

5. Loans and Advances include Rs. 2,330,51 9/- representing sales tax and interest thereon paid as a matter of abundant caution under protest under applicable Trade & Sales Tax Act, based on the enquiry made on the company by Uttar Pradesh Trade Tax authorities in respect of diesel, steel and cement provided to contractors/sugar cane transporters during the years 1997-98 to 2000-01.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. The issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any orovision.

6. The company has not taken any assets on finance/operating lease. Accordingly, Accounting Standard AS-19 on leases is not applicable. The company has taken various office/residential premises and office equipment on cancellable leases which are renewable on expiry of the lease period.

7. The company is governed by the provisions of Section 1 15 JB of the Income Tax Act, 1961 and provision for income tax has been made accordingly. The company has considered MAT credit entitlement for MAT paid for the current financial year and earlier financial years based on virtual certainty of sufficient future taxable income available against which the tax credit will be utilized.

The provision for Income Tax for the period is the aggregate of the provision made for the six months ended 31 st March, 2009 and the estimated provision based on the taxable income earned for the six months upto 30th September, 2009, the ultimate liability of which will be determined on the basis of the income for the period from 1st April, 2009 to 31 st March, 2010.

Provision for Wealth Tax of Rs 3,01,969/- has been made for the Assessment Year 2009-10 as per the provisions of Wealth Tax Act, 1957.

8. 15 lacs Equity Share warrants convertible into 15 lacs equity shares were allotted to promoters on 30th July 2007 on receipt of deposit @1 0% of the amount calculated at the time of allotment of warrants as per pricing formula contained in the SEBI guidelines on preferential allotment. The warrants were convertible into equity shares at the option of warrants holders at any time after 31st January 2008 but before the expiry of 18 months from the date of allotment considering the relevant date as 1st January 2008 for the purpose of determining the price of the equity shares arising out of the conversion. Out of 1 5 lacs warrants, 7.50 lacs warrants have been converted into 7.50 lacs Equity Shares in February 2008 and balance deposit on 7.50 lac warrants has been forfeited on 31st January 2009 on expiry of the last date of conversion of the warrants. The funds raised by the company through preferential allotment had been utilized for augmenting long term resources. The amount of deposit against forfeited warrants of Rs 5,986,500/- has been credited to capital reserve in Schedule 2 of the financial statements.

9. The Company, in compliance of the interim order passed by the Honble High Court of Allahabad (Lucknow Bench) on the 15th November 2007, has paid a price of Rs. 110/- per quintal for sugar cane purchased and accordingly accounted for the liability for sugar season 07-08. However, The High Court of Allahabad, by a subsequent order dated 7th July2008, upheld the validity of SAP of Rs 1 25/- per quintal announced by the State Government. Aggrieved by the said order, the UPSMA filed SLP with Honble Supreme Court of India. Honble Supreme Court, in the interim, upheld that the sugar cane purchased by the sugar mills would continue to be paid for @ Rs 110/- per quintal. In view of the above, differential liability, if any, will be accounted as and when the matter is finally settled. However, for season 2008-09, the company has paid and accounted for the cane price at SAP announced by the State Government.

10. Aggrieved by the Order of the Directorate of Sugar, Government of India, converting un-lifted quantity of non-levy sugar of 1 77,403 quintals into levy, the company filed a writ petition with the Honble Allahabad High Court.Honble High Court upheld the Order of the Directorate of Sugar. The company filed SLP with the Honble Supreme Court of India and the order of the Directorate of Sugar in the interim stands stayed. The company has obtained legal opinion and is advised that the order of the Directorate of Sugar is in contravention of the provisions of applicable laws and is therefore liable to be struck down. Pending disposal of the SLP, liability arising on account of the said order, if any, has therefore not been provided.

11. a) 1 2% Redeemable Preference Shares of Rs. 100/- each are redeemable at par in September 201 1.

b) 8% Redeemable Cumulative Preference Shares of Rs. 1 OOAeach are redeemable at par in August 201 2.

12. Capital Redemption Reserve represents reserve created on account of:

a) Buy-back of Equity Shares in the year 2000-01 in terms of provisions of section 77A of the Companies Act, 1 956.

b) Redemption of 500,000 1 1 % preference shares of Rs. 100/- each amounting to Rs.50,000,000/- in terms of Section 80 of the Companies Act, 1956.

13. Sundry creditors-others in Schedule 8 include Rs 593,796/- (previous year Rs 564,735/-) on account of unpaid dividends/fixed deposits. However, there are no amounts outstanding in respect of unpaid dividend /fixed deposits included under sundry creditors in Schedule 8, for more than seven years to be transferred to Investor Education and Protection Fund.

14. a) The company has made provision for gratuity and leave encashment in the nature of defined benefit obligation on the basis of actuarial valuation as per revised AS-15. Since the liability has not been funded through a Trust or Insurer, there are no plan assets.

b) i) Defined Contribution Plans:

Employers Contribution to Provident Fund Rs. 1 57.48 lacs ( previous year Rs 1 36.20 lacs)

15. Capital raising expenditure written off during the year Rs.3,01 1,120/-( previous year Rs.3,01 1,120/-) represents proportionate expenses incurred in placement of GDR (net of income realized during the course of placement).

16. Sundry Debtors/Creditors and Loans and Advances balances are subject to confirmation and reconciliation.

17. There are no outstanding amount payable beyond the agreed period to Micro, Small and Medium enterprises as required by MSMED Act, 2006 as on the Balance Sheet date to the extent such enterprises have been identified based on information available with the company. In view of this there is no interest payable also.

18. As per the Accounting Standard AS-28 Impairment of Assets, the company has tested impairment of fixed assets to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the year.

19. During the year, Rupee term loans of Rs.24,1 96 lacs were converted into foreign currency loan of USD 50,1 68,930.30 . The above loans are hedged by forward contracts. There are no other foreign currency exposures.

20. Figures for the previous year have been regrouped/reclassified, wherever necessary.

21. Related party disclosures as required by Accounting Standard AS-1 8 for the year ended 30th September, 2009. a) Names of the related parties and description of relationship:

i) Associates

- Morarka Finance Limited

- Dwarikesh Trading Company Limited

- Dwarikesh Informatics Limited (Formerly Dwarikesh Samvad Limited)

- Dwarikesh Sugarcane Research Institute

ii) Key Management Personnel

- Shri G.R.Morarka Chairman &

Managing Director

- Shri BJ.Maheshwari Wholetime Director &

(w.e.f. 01.05.09) Company Secretary Cum Chief

Compliance Officer

- Shri Vijay S. Banka ( w.e.f. 01.05.09) Wholetime Director & Chief

Financial Officer

iii) Relatives of Key Managerial Personnel

Shri G.R. Morarka

- Smt. Smriti G. Morarka (Wife)

- Ms. Priyanka G. Morarka (Daughter)

- Master Pranay G. Morarka (Son)

Shri Vijay S. Banka

- Smt. Sarla V. Banka (Wife)


Sep 30, 2008

1.a) Term Loans from IDBI Bank Limited (IDBI) of Rs. 12,826 lacs (including term loan in foreign currency equivalent to Rs 2,500 Lacs) are secured as under:

- Term Loan of Rs 231 Lacs is secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts),situated at Dwarikesh Nagar, village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) pari passu first charge by way of equitable mortgage on immovable properties situated at Dwarikesh Nagar, village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu second charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term Loan of Rs 5,000 Lacs (including term loan in foreign currency equivalent to Rs 2,500 Lacs) is secured by (i) pari passu first charge on movable and immovable fixed assets (both present and future) of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term Loan of Rs 1,600 Lacs is secured by (i) pari passu first charge on movable and immovable fixed assets (both present and future) of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term loan of Rs. 595 Lacs is secured by residual pari-passu charges on movable & immovable fixed assets of (i) unit -I Dwarikesh Nagar, Village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-ll Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

b) Term Loans from Punjab National Bank (PNB) of Rs. 30,237 lacs (including term loan in foreign currency equivalent to Rs 1, 196.10 Lacs) are secured as under:

- Term loan of Rs. 7,650 lacs is secured by (i) First charge on block assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh (present & future) by way of hypothecation of machinery & equipment and other fixed assets and equitable mortgage of land and building situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (ii) Second pari passu charge on block assets of the unit situated at Dwarikesh Nagar, village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh.

- Term loan of 9,400 lacs (including term loan in foreign currency equivalent to Rs 1, 196.10 Lacs) is secured by (i) Pari passu first charge on block of assets, (both present and future ) by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage of Land and Building of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh, ii) second pari passu charge on entire block assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third pari passu charge on entire block assets of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

- Term loan of Rs.5,600 lacs is secured by (i) pari passu first charge on specific immovable & movable fixed assets by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage of Land & Building of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh pertaining to 24 MW Co-generation plant, and (ii) second pari passu charge on entire block assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh.

- Term loans of Rs 210 lacs are secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) on entire block assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh and (ii) equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh

All the term loans of PNB mentioned above are also secured by second pari passu charge on current assets of the company.

- Term loans of Rs. 2,377 Lacs are secured by residual pari-passu charges on movable & immovable fixed assets of (i) Unit -I Dwarikesh Nagar, Village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) Unit-ll Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh of the Company.

- Term loan of 5,000 lacs is secured by (i) Pari passu first charge on immovable and movable fixed assets, (both present and future) by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage of Land and Building of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh, and ii) pari passu first charge on specific immovable & movable fixed assets by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage of Land & Building of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh pertaining to 24 MW Co-generation plant

c) Interest free trade tax loan of Rs. 105.77 lacs (including Rs. 19.12 lacs added during the year) from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by (i) second pari-passu charge on Companys immovable properties situated at Villages Bundki and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh. The loan amount is repayable at the end of 5 years from the respective year of collection.

d) Loan from Sugar Development Fund of Rs. 236.50 lacs is secured by (i) first pari passu charge on whole of movable properties of the unit & equitable mortage on immovable properties situated at Villages Bundki, and Rajupura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh including its moveable plant and machinery, machinery spares, tools and accessories and other movables, both present and future and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

All the term loans mentioned at above (a to c) are also personally guaranteed by the Chairman & Managing Director of the Company.

e) Cash credit balances of Rs. 14,268.20 lacs from Punjab National Bank and IDBI Bank Limited are secured by (i) hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares, (ii) second charge on block assets immovable and movable , both present and future, of Dwarikesh Nagar, Village Bundki and Rajupura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (iii) second charges on block assets immovable & movable, both present & future, of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iv) second charges on block assets immovable & movable, both present & future, of Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh.

The cash credit facilities are also personally guaranteed by the Chairman & Managing Director of the Company.

As at As at 30th Sep 08 30th Sep07 Rupees Rupees

2. Contingent liability not provided for

(a) In respect of show cause notices from Central Excise department 10,503,596 4,383,005 in various cases against which the company has preferred appeals. (b) In respect of Trade Tax and Entry Tax demand received from 3,212,316 885,760 Uttar Pradesh trade tax authorities in various cases, in respect of which the company has preferred appeals (net of amount deposited under appeal Rs.2,499,584/-, previous year Rs. 2,847,404/-). (c) Bank Guarantees given to Pollution Control Board and Petroleum 3,560,000 3,400,000 Companies.

3. Dividend not provided for on cumulative preference shares- Rs 13,320,000/- (previous year-nil)

4. Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs. Nil (previous year Rs. 215.87 lacs) and not provided for is Rs. 140.50 lacs (previous year Rs. 3,883.72 lacs).

5. Loans and Advances include Rs. 2,330,519/- representing sales tax and interest thereon paid as a matter of abundant caution under protest under applicable Trade & Sales tax Act, based on the enquiry made on the company by Uttar Pradesh Trade tax authorities in respect of diesel, steel and cement provided to contractors/ sugar cane transporters during the years 1997-98 to 2000-2001.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. The issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any provision.

6. The company has not taken any assets on finance/ operating lease. Accordingly, Accounting Standard AS-19 on leases is not applicable. The company has taken various office/ residential premises and Office Equipments on cancelable leases which are renewable on expiry of the lease period.

7. In view of losses during the year, no provision for income tax has been considered.

Provision for wealth tax of Rs. 337,480/- represents provision applicable for the Assessment year 2008- 09 as per the provisions of Wealth Tax Act, 1957.

8. 15 Lac Equity Share warrants convertible into 15 lac equity shares were allotted to promoters on 30th July, 2007 on receipt of deposit @ 10% of the amount calculated at the time of allotment of warrants as per pricing formula contained in the SEBI guidelines on preferential allotment. The warrants are convertible into equity shares at the option of warrants holders at any time after 31st January, 2008 but before the expiry of 18 months from the date of allotment considering the relevant date as 1st January, 2008 for the purpose of determining the price of the equity shares arising out of the conversion. Out of 15 lacs warrants, 7.50 Lac warrants have been converted into 7.50 Lacs Equity Shares in February, 2008 and balance 7.50 Lac warrants are pending for conversion as on 30th September, 2008. The funds raised by the company through preferential allotment have been utilized for augmenting long term resources.

9. The Company, in compliance of the interim order passed by the Honble High Court of Allahabad (Lucknow Bench) on the 15th November, 2007, has paid a price of Rs. 110/- per quintal for sugar cane purchased and accordingly accounted for the liability for sugar season 2007-08. However, The High Court of Allahabad, by a subsequent order dated 7th July, 2008, upheld the validity of SAP of Rs 125 per quintal announced by the State Government. Aggrieved by the said order, the UPSMA filed SLP with Honble Supreme Court of India. Honble Supreme Court, in the interim, upheld that the sugar cane purchased by the sugar mills would continue to be paid for @ Rs 110/- per quintal. In view of the above, differential liability, if any, will be accounted as and when the matter is finally settled.

10. a) 12% Redeemable Preference Shares of Rs. 100/- each are redeemable at par in September, 2011.

b) 8% Redeemable Cumulative Preference Shares of Rs. 100/-each are redeemable at par in August 2012.

11. Capital Redemption Reserve represents reserve created on account of:

a) Buy-back of Equity Shares in the year 2000-2001 in terms of provisions of section 77A of the Companies Act, 1956.

b) Redemption of 500,000 11 % preference shares of Rs. 100/- each amounting to Rs. 50,000,000/- in terms of section 80 of the Companies Act, 1956.

12. There are no amounts outstanding in respect of unpaid dividend /fixed deposits for more than seven years to be transferred to Investor Education and Protection Fund.

13. Capital raising expenditure written off during the year Rs.3,01 1,120/- (previous year Rs.3,011,120/-) represents proportionate expenses incurred in placement of GDR (net of GDR income).

14. Sundry Debtors/Creditors and Loans and Advances balances are subject to confirmation and reconciliation.

15. a) There are no dues to Micro, Small and Medium enterprises/ Small scale industrial undertaking (SSI) outstanding for more than 30 days.

b) The company has not made any delays in settlement of balances due to small-scale undertakings and hence no provision for interest on delayed payment is required. Further there are no outstanding amount payable beyond the agreed period to Micro, Small and Medium enterprises as required by MSMED Act, 2006 as on the Balance Sheet date to the extent such enterprises have been identified based on information available with the company.

16. As per the Accounting Standard AS-28 Impairment of Assets, the company has tested impairment of fixed assets to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the year.

17. During the year Rupee term loans of Rs. 3,696.10 Lacs were converted into foreign currency loan of USD 9,333,924.50. The above loans are hedged by forward contract. There are no other foreign currency exposures.

18. Figures for the previous year have been regrouped / reclassified, wherever necessary.


Sep 30, 2007

A Term Loans from Industrial Development Bank of India Limited (IDBI) of Rs.5313 lacs are secured as under:

Term Loan of Rs 363 Lacs is secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts),situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, (ii) pari passu first charge by way of equitable mortgage on immovable properties situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu second charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

Term Loan of Rs 4,950 Lacs is secured by (i) pari passu first charge on movable and immovable fixed assets ( both present and future ) of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly (ii) pari passu second charge on the movable and immovable fixed assets of unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) pari passu third charge on the movable and immovable fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

B Term Loans from Punjab National Bank ( PNB) of Rs. 23,160 lacs are secured as under:

Term loan of Rs. 7,650 lacs is secured by (i) First charge on block assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh (present & future) by way of hypothecation of machinery & equipment and other fixed assets and equitable mortgage of land and building situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (ii) Second pari passu charge on block assets of the unit situated at Dwarikesh Nagar, village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh.

Term loan of 9,400 lacs is secured by (i) Pari passu first charge on immovable and movable fixed assets, (both present and future ) by way of hypothecation of machinery, equipment & other fixed assets and equitable mortgage of Land and Building of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh, ii) second pari passu charge on entire block assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) third pari passu charge on entire block assets of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

Term loan of Rs.5,600 lacs is secured by (i) pari passu first charge on specific fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh pertaining to 24 MW Co-generation project, (ii) pari passu second charge on fixed assets of unit situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (iii) pari-passu second charge on fixed assets of unit situated at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh and (iv) second pari passu charge on entire block assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh.

Term loans of Rs 180 lacs and Rs 330 lacs are secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) on entire block assets of Dwarikesh Nagar, village Bundki & Rajupura, Tehsil Nagina, District Bijnor, Uttar Pradesh. (ii) equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

All the term loans of PNB mentioned above are also secured by second pari passu charge on current assets of the company.

C Term Loan from Indian Renewable Energy Development Agency Limited (IREDA) of Rs. 5,054 lacs is secured by (i) first pari passu charge on specific fixed assets at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh pertaining to 24 MW Co-generation project, by way of equitable mortgage on specific immovable properties /assets both existing and future and hypothecation of movable fixed assets/properties and (ii) first pari passu charge on specific fixed assets at Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil Faridpur, District Bareilly, Uttar Pradesh pertaining to 24 MW Co-generation project, by way of equitable mortgage on specific immovable properties /assets both existing and future and hypothecation of movable fixed assets/properties.

D Interest free trade tax loan of Rs. 106.53 lacs (including Rs. 4.65 lacs added during the year) from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by (i) second pari-passu charge on Company’s immovable properties situated at Villages Bundki and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh. The loan amount is repayable at the end of 5 years from the respective year of collection.

E Loan from Sugar Development Fund of Rs. 302.50 lacs is secured by (i) first pari passu charge on whole of movable properties of the unit & equitable mortage on immovable properties situated at Villages Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh Company including its moveable plant and machinery, machineries spares, tools and accessories and other movables, both present and future and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

All the term loans mentioned at above (A to C) are also personally guaranteed by the Chairman & Managing Director of the Company.

F Cash credit of Rs. 7,400.74 lacs from Punjab National Bank and Rs. 992.98 lacs from IDBI Bank Limited is secured by (i) hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares, (ii) second charge on block assets immovable and movable, both present and future of Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh , (iii) second charges on block assets immovable & movable, both present & future of Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and (iv) second charges on block assets immovable & movable, both present & future of Dwarikesh Dham, village Bhagwanpur Phulwa, Tehsil faridpur, District Bareilly, Uttar Pradesh.

The cash credit facilities are also personally guaranteed by the Chairman & Managing Director of the Company.

2. Sundry creditors- others include short term loan of Rs. 4,000 lacs by ICICI Bank Limited (Previous year Rs. 1000 lacs by HDFC Bank Limited) to farmers, wherein the company is acting as a managing agent and the same is collaterally backed by corporate guarantee from the company.

As at As at

30th Sept.07 30th Sept.06

Rupees Rupees

3. Contingent liability not provided for

(a) In respect of show cause notices from Central Excise 4,383,005 3,695,839 department in various cases against which the company

has preferred appeals.

(b) In respect of Trade Tax and Entry Tax demand received 885,760 885,760 from Uttar Pradesh trade tax authorities in various cases,

in respect of which the company has preferred appeals (net of amount deposited under appeal of Rs.2,847,404/-, previous year Rs. 2,804,144/-).

(c) Bank Guarantees given to Pollution Control Board and 3,400,000 2,700,000 Petroleum Companies.

5. Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs. 215.87 Lacs (previous year Rs. 3,661.13 lacs) and not provided for is Rs. 3,883.72 lacs (previous year Rs. 26,659.06 lacs).

6. During the year, the Company has changed the method of valuation of molasses from ‘equivalent content of sugar in molasses’ to ‘net realisable price’ and also value of molasses and sales realization of bagasse has been reduced for determination of sugar valuation and consequent to this, total inventory has reduced by Rs. 374.47 lacs. This change is adopted in line with the normal trade practice.

9. a. Loans and advances include capital advances of Rs. 215.87 lacs (previous year Rs.3,661.13 lacs).

9. b. Loans and Advances include Rs. 2,330,519/- representing sales tax and Interest thereon paid as

a matter of abundant caution under protest under applicable Trade & Sales tax Act, based on the enquiry made on the company by Uttar Pradesh Trade tax authorities in respect of diesel, steel and cement provided to contractors/ sugar cane transporters during the years 1997-98 to 2000-2001.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. The issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any provision.

10. Preoperative expenditure capitalized as part of fixed assets and carried forward is as under:

11. The company has not taken any assets on finance/ operating lease. Accordingly, Accounting Standard AS-19 on leases is not applicable. The company has taken various office/ residential premises and Office Equipments on cancelable leases which are renewable on expiry of the lease period.

12. The company is governed by the provisions of section 115 JB of the Income Tax Act, 1961, since there is no taxable income under the normal computation. Accordingly, provision for income tax has been made under the provisions of Minimum Alternate Tax (MAT) considering the profit for the year ended 30th September, 2007.

Provision for wealth tax of Rs.199,445/- represents provision applicable for the Assessment year 2007- 08 as per the provisions of Wealth Tax Act, 1957.

13. Deferred Tax Asset & liability are attributable to the following items:

14. The company revised its’ Income Tax return for assessment year 2006-07 and opted not to claim deduction under section 80IA of the Income Tax Act, 1961 for the assessment year 06-07 and revised return for the assessment year 06-07 is filed. Consequent to this revision, net deferred tax liability up to 30th September, 2006 has been recomputed at Rs.214,409,540/-from Rs.156,935,504/- as mentioned above in note no.13. The differential amount of Rs.57,474,036/- has been charged off this year as deferred tax and corresponding amount is withdrawn from general reserve thus having no impact on profit after tax for the year ended 30.09.07 reported above. However, if the basis of revised return was considered during the previous year EPS, reported as on 30.09.06 of Rs.13.90 would have been to Rs.10.04.

15. 15 Lac Equity Share warrants convertible into 15 lac equity shares are allotted to promoters on 30th July’2007 on receipt of deposit @10% of the amount calculated at the time of allotment of warrants as per pricing formula contained in the SEBI guidelines on preferential allotment. The warrants are convertible into equity shares at the option of warrants holders at any time after 31st January’2008 but before the expiry of 18 months from the date of allotment considering the relevant date as 1st January’2008 for the purpose of determining the price of the equity shares arising out of the conversion.

16. a. 12% Redeemable Preference Shares of Rs. 100/- each are redeemable at par in September 2008.

b. During the year the Company has allotted 15 lacs 8% Redeemable Cumulative Preference Shares of Rs. 100/-each redeemable at par in August 2012.

17. Capital Redemption Reserve represents reserve created on account of:

a. Buy-back of Equity Shares in the year 2000-2001 in terms of provisions of section 77A of the Indian Companies Act 1956.

b. Redemption of 500,000 11% preference shares of Rs.100/- each amounting to Rs.50,000,000/- in terms of section 80 of the Indian Companies Act 1956.

18. There are no amounts outstanding in respect of unpaid dividend /fixed deposits for more than seven years to be transferred to Investor Education and Protection Fund.

19. Capital raising expenditure written off during the year Rs.3,011,120/-( previous year Rs.3,011,121/-) represents proportionate written off expenses incurred in placement of GDR (net of GDR income).

20. Sundry Debtors/Creditors and Loans and Advances balances are subject to confirmation and reconciliation.

21. (a) There are no dues to small scale industrial undertaking (SSI) outstanding for more than 30 days.

(b) The company has not made any delays in settlement of balances due to small-scale undertakings and hence no provision for interest on delayed payment is required. Further there are no outstanding amount payable beyond the agreed period to small, micro and medium enterprises as on the Balance Sheet date to the extent such enterprises have been identified based on information available with the company .

22. As per the Accounting Standard AS-28 Impairment of Assets, the company has tested impairment of fixed assets to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the year.

23. Figures for the previous year have been regrouped / reclassified, wherever necessary.


Sep 30, 2006

Out of the above equity shares

1) 1,159,691 Equity Shares of Rs. 10/- each have been issued and alloted as fully paid up bonus shares, by way of capitalisation of securities premium account in the year ended September, 2001.

2) 2,520,000 Equity shares of Rs. 10/- each have been bought back during the year ended 30th September 2001 in accordance with the provisions of Section 77A, 77AA & 77B and other applicable provisions of the Companies Act, 1956.

3) 3 million Global Depository Receipt (GDR) have been issued & alloted on 22.12.05, representing 3 million equity shares of face value of Rs.10/- each @ USD 4 per GDR

4. SECURITIES FOR SECURED LOANS:

A. Term Loans from Industrial Development Bank of India of Rs. 690 lakhs are secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts), (ii) equitable mortgage on immovable properties situated at Dwarikesh Nagar village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

B. Term Loans from Punjab national Bank of Rs. 9,810 lakhs are secured as under:

* Term loan of Rs. 9,000 lakhs is secured by (i) First charge on block assets of new unit situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh (present & future) by way of hypothecation of machinery & equipment and other fixed assets and equitable mortgage of land and building situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (ii) Second pari passu charge on block assets of the unit situated at Dwarikesh Nagar.village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) Second pari-passu charge on current assets of both the units at Dwarikesh Nagar & Dwarikesh Puram.

Term loans of Rs 810 lakhs are secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts), (ii) equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

* Out of term loans of Rs.810 lakhs, Rs.450 lakhs is also secured by second charge on current assets of the company.

All the term loans mentioned at `A' and `B' above are also personally guaranteed by the Chairman & Managing Director of the Company.

C. Cash credit of Rs. 1,231.46 lakhs from Punjab National Bank and Rs. 172.02 lakhs from ABN Amro Bank is secured by hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares, and are further secured by second charge on Company's immovable properties situated at Villages Bundki/Rajpura, Post Office Medhpurasultan, Tehsil Nagina, and at Village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh and movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The cash credit facilities are also personally guaranteed by the Chairman & Managing Director of the Company.

D. Interest free trade tax loan of Rs. 116.37 lakhs (including Rs. 11.70 lakhs added during the year) from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by (i) second charge on Company's immovable properties situated at Villages Bundki and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The charge ranks pari-passu with the charges already created in favour of Punjab National Bank in respect of cash credit facilities extended by them and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

The above amount is repayable at the end of 5 years from the respective year of collection.

E. Loan from Sugar Development Fund of Rs. 330 lakhs is secured by (i) first pari passu charge on whole of movable properties of the unit situated at Villages Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh Company including its movable plant and machinery, machinery, spares, tools and accessories and other movables, both present and future and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahadarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh

5. Sundry creditors - others include short term loan of Rs. 10 crores (Previous year nil) by HDFC Bank to farmers, wherein the company is acting as a managing agent and the same is collaterally backed by corporate guarantee from the company.

As at As at 30th Sept.06 30th Sept.05 Rupees Rupees

6. Contingent liability not provided for

(a) In respect of show cause notices from Central Excise 3,695,839 2,260,838 department in various cases against which the company has preferred appeals.

(b) In respect of Trade Tax and Entry Tax demand 885,760 885,760 received from Uttar Pradesh trade tax authorities in various cases, in respect of which the company has preferred appeals (net of amount deposited under appeal Rs.2,804,144/-, previous year Rs.2,563,284/-).

(c) Bank Guarantees issued on behalf of the Company 2,700,000 1,600,000

7. Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs. 3,661.13 lakhs (previous year Rs. 1,219.66 lakhs) and not provided for is Rs. 26,659.06 lakhs (previous year Rs. 3,266.60 lakhs).

8. During the year company has changed accounting method in respect of provision of excise duty on excisable finished goods. Accordingly, an amount of Rs. 148.37 lakhs towards estimated excise duty on finished goods is included in the value of inventories under the head current assets and similar amount is provided as manufacturing expenses and included in current liabilities which is in line with `Guidance Note on Accounting Treatment of Excise Duty' issued by the Institute of Chartered Accountants of India. However, this change has no impact on results for the year.

9. Loans and Advances include Rs. 2,330,519/- representing sales tax and interest thereon paid as a matter of abundant caution under protest under applicable Trade & Sales tax Act, based on the enquiry made on the company by Uttar Pradesh Trade tax authorities in respect of diesel, steel and cement provided to contractors/sugar cane transporters during the years 1997-98 to 2000-2001.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. The issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any provision.

b) During crushing season 2005-2006, company's Dwarikesh Puram unit, which commenced production w.e.f 1st January, 2006, could be run at 45% of its installed capacity owing to various deficiencies observed in the equipments supplied by one supplier and need for some modifications in other equipments. Suitable remedies have already been taken in this regard and the company has already taken steps to rectify the problems. In the broader interest of the business and to minimize the losses, the plant was run at such a lower capacity. However, for carrying out various modifications/rectifications in the plant, so as to achieve optimum capacity utilization from crushing season 2006-2007, it was decided to take the plant under major modification/maintenance w.e.f. 16th April, 2006. Accordingly, the direct and incidental cost relating to such modification/maintenance is being capitalized. The company is confident of attaining the rated capacity and the optimum efficiencies in the forthcoming season.

10. The company has not taken any assets on finance/operating lease. Accordingly, Accounting Standard 19 on leases is not applicable. The company has taken various office/residential premises on cancelable lease which are renewable on expiry of the lease period.

11. The company is governed by the provisions of section 115 JB of the Income Tax Act, 1961, since there is no taxable income under the normal computation. Accordingly, provision for income tax has been made under the provisions of Minimum Alternate Tax (MAT) considering the profit for the year ended 30th September, 2006.

Provision for wealth tax of Rs. 135,000/- represents provision applicable for the Assessment year 2006-07 as per the provisions of Wealth Tax Act, 1957.

Deferred tax assets in respect of brought forward losses and depreciation have been recognized owing to virtual certainty of availability of future taxable income to realize such assets owing to increase in profitability due to start of commercial operations at Dwarikesh Puram unit and also due to increased volume in business at Dwarikesh Nagar.

12. 12% Redeemable Preference Shares of Rs.100/- each are redeemable at par in September 2008.

13. Capital Redemption Reserve represents reserve created for the purpose of:

a. Buy-back of Equity Shares in the year 2000-2001 in terms of provisions of section 77A of the Indian Companies Act 1956.

b. Redemption of 500,000 11% preference shares of Rs.100/- each amounting to Rs.50,000,000/- in terms of section 80 of the Indian Companies Act 1956.

14. There are no amounts outstanding in respect of unpaid dividend/fixed deposits for more than seven years to be transferred to Investor Education and Protection Fund.

15. The company has invested in 20,000 equity shares of Rs.10/- each and 20000 10% preference shares of Rs. 100/- each of M/s Dwarikesh Samvad Limited. The above company has accumulated losses which have reduced substantially owing to continuous profits from 2003-2004 onwards. Having regard to the above and long-term interest in the above company, the management is of the opinion that no provision is considered necessary since the company is continuing its operations as a going concern and is continuously earning profits from last three years.

16. In the previous year the exceptional item (net) of Rs. 2,092,225/- was relating to IPO expenses of Rs. 23,728,031/- netted off with interest of Rs. 21,635,806/- on IPO proceeds.

17. The company is required to pay purchase tax to Uttar Pradesh Government on all its purchases of sugarcane during the seasons 2001-2002, 2002-2003, 2003-2004 and 2004-2005 @ Rs. 2 per quintal vide State Government Circular nos 4000/C.D/46-2000-3 1401/98-99 dated 27th October 2001, 2736/S/CHI.U.ANU-1/02-1623/96 dated 11th December 2002, 182S.CHI.U.ANU-1/04-1623/96 dated 30th January 2004 and 4195/S. CHI.U.ANU.-1/-1606/2004 dated 12th January 2005 respectively. Out of this, Rs. 1.75 per quintal was payable to farmers as part of State Administered Price (SAP) declared by the State Government and balance of Rs. 0.25 per quintal was payable to the Government Treasury.

However, for sugar season 2005-2006 entire purchase tax is payable to the state government, since no directives are issued by the state government contrary to this effect.

18. Sundry Debtors/Creditors and Loans and Advances balances are subject to confirmation and reconciliation.

19. (a) As per information available on records, there are no dues to small scale industrial undertaking (SSI) outstanding for more than 30 days.

(b) The company has not made any delays in settlement of balances due to small-scale undertakings and hence no provision for interest on delayed payment is required.

20. During the year, the company has raised funds amounting to Rs. 540,549,427/-, through 3 million Global Depositary Receipts (GDR) representing 3 million Equity Shares of face value of Rs 10/- each @ USD 4 per GDR. The GDRs have been listed on Luxembourg Stock Exchange. Out of 3 million GDRs issued and allotted, 2,937,500 GDR investors have opted for conversion into equity shares and balance 62,500 GDRs underlying equity shares are pending for conversion till 30th September, 2006. GDR proceeds have been utilized in accordance with the objectives of GDR issue and there are no unutilized money at the end of the year.

21. As per the Accounting Standard 28-impairment of Assets, the company has tested impairment of fixed assets to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount as per market price for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the year.

22. The Company has entered into a contract with bank for swap of a part of its INK term loan in CHF for a period up to 29th December' 2006. Valuation of this swap is done by a forex professional organization and as certified by them, the market to market (MTM) of the swap is showing derivative assets of Rs.8.65 lakhs as on 30th September' 2006. This derivative was for the purpose of hedging and there is no unhedged foreign currency exposure.

23. Figures for the previous year have been regrouped/reclassified, wherever necessary.


Sep 30, 2005

SECURITIES FOR SECURED LOANS:

A. Term Loans from Industrial Development Bank of India of Rs. 1,082 lacs are secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts), (ii) equitable mortgage on immovable properties situated at Dwarikesh Nagar,village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

B. Term Loans from Punjab national Bank of Rs. 7,626 lacs are secured as under:

* Term loan of Rs. 6,381 lacs is secured by (i) First charge on block assets of new unit situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh (present & future) by way of hypothecation of machinery & equipment and other fixed assets and equitable mortgage of land and building situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh, (ii) Second pari passu charge on block assets of the unit situated at Dwarikesh Nagar,village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) Second pari-passu charge on current assets of both the units at Dwarikesh Nagar & Dwarikesh Puram.

Term loans of Rs 1,245 lacs are secured by (i) pari passu first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts), (ii) equitable mortgage on immovable properties situated at Dwarikesh Nagar, Village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and (iii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

* Out of term loans of Rs.1,245 lacs, Rs 570 lacs is also secured by second charge on current assets of the company and Rs.180 lacs is further guaranteed by the promoter companies, viz. (a) Morarka Finance Limited and (b) Dwarikesh Trading Company Limited.

All the term loans mentioned at `A' and `B' above are also personally guaranteed by the Chairman & Managing Director of the Company.

C. Cash credit of Rs. 5,47.21 lacs from Punjab National Bank is secured by hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares, and are further secured by second charge on Company's immovable properties situated at Villages Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The cash credit facilities are also personally guaranteed by the Chairman & Managing Director of the Company.

D. Interest free trade tax loan of Rs.122.83 lacs (including Rs.24.35 lacs added during the year) from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by (i) second charge on Company's immovable properties situated at Villages Bundki and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The charge ranks pari-passu with the charges already created in favour of Punjab National Bank in respect of cash credit facilities extended by them and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh.

The above amount is repayable at the end of 5 years from the respective year of collection.

E. Loan from Sugar Development Fund of Rs.330 lacs is secured by (i) first par; passu charge on whole of movable properties of the unit situated at Villages Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh Company including its moveable plant and machinery, machineries, spares, tools and accessories and other movables, both present and future and (ii) second pari passu charge by way of equitable mortgage on immovable properties situated at Dwarikesh Puram, village Bahardarpur, Tehsil Dhampur, District Bijnor, Uttar Pradesh

5. Contingent liability not provided for

(a) In respect of show cause notices from Central Excise department regarding CENVAT claims on capital goods disputed by the department and levy of penalty and interest on the above amount due against which the company has preferred appeals.

(b) In respect of Trade Tax and Entry Tax demand received from Uttar Pradesh trade tax authorities in various cases, in respect of which the company has preferred appeals (net of amount deposited under appeal of Rs. 2,563,584/-, previous year Rs. 2,508,004/-).

(c) Bank Guarantees given to Pollution Control Board

6. Estimated amount of contracts remaining to be executed on capital account, net of advance of Rs. 1,219.66 lacs (previous year Rs. 86.79 lacs) and not provided for is Rs. 3,266.60 lacs (previous year Rs.681.13 lacs).

7. Estimated excise duty of Rs. 26,257,034/- (previous year Rs.26,318,465/-) on finished goods lying in the excise bonded warehouse and in Distillery for captive consumption but not cleared before 30th September, 2005 has not been provided and hence not included in the inventory valuation. However, there is no effect on the profit for the year on account of the above treatment.

8. During the year the company has changed the method in respect of measurement of inventories of raw materials, stores & spares and traded goods from cost followed hitherto to lower of cost and net realizable value in line with Accounting Standard AS-2 `Valuation Of Inventories' issued by the Institute Of Chartered Accountants Of India. However, the change has no impact on results for the year.

9. Loans and Advances include Rs. 2,330,519/- representing sales tax and interest thereon paid as a matter of abundant caution under protest under applicable Trade & Sales tax Act, based on the enquiry made on the company by Uttar Pradesh Trade tax authorities in respect of diesel, steel and cement provided to contractors/sugar cane transporters during the years 1997-98 to 2000-2001.

However, the company is confident of the non-applicability of any sales tax levy on this score as these items have been provided strictly for the activities directly related to the manufacturing process. The issue of diesel and other items has also not been classified as revenue income and has always been treated as store consumption. The company has paid the amount purely to establish its bona fide intentions and is confident of settling the issue in its favour and does not consider it necessary for making any provision.

10. The company has not taken any assets on finance/operating lease. Accordingly, Accounting Standard 19 on leases is not applicable. The company has taken various office/residential premises on cancelable lease which are renewable on expiry of the lease period.

11. The company is governed by the provisions of section 115 JB of the Income Tax Act, 1961, since there is no taxable income under the normal computation. Accordingly, provision for income tax has been made under the provisions of Minimum Alternate Tax (MAT) considering the profit for the year ended 30th September, 2005.

Provision for wealth tax of Rs. 84,121/- represents provision applicable for the Assessment year 2005-06 as per the provisions of Wealth Tax Act, 1957.

Deferred tax assets in respect of brought forward losses and depreciation have been recognized owing to virtual certainty of availability of future taxable income to realize such assets owing to increase in profitability in sugar and co-generation business on one hand and start of commercial operations in distillery business on the other.

12. 12% Redeemable Preference Shares of Rs. 100/- each are redeemable at par in September 2008.

13. Capital Redemption Reserve represents reserve created for the purpose of:

a. Buy-back of Equity Shares in the year 2000-2001 in terms of provisions of section 77A of the Indian Companies Act 1956.

b. Redemption of 500,000 11% preference shares of Rs.100/- each amounting to Rs.50,000,000/- in terms of section 80 of the Indian Companies Act 1956.

14. There are no amounts outstanding in respect of unpaid dividend/fixed deposits for more than seven years to be transferred to Investor Education and Protection Fund.

15. The company has invested in 20,000 equity shares of Rs. 10/- each and 20000 10% preference shares of Rs. 100/- each of M/s Dwarikesh Samvad Limited. The above company has accumulated losses which have reduced substantially owing to profits during 2003-2004 and 2004-2005. Having regard to the above and long-term interest in the above company, the management is of the opinion that no provision is considered necessary since the company is continuing its operations as a going concern.

16. During the year, exceptional item (net) of Rs. 2,092,225/- represents IPO expenses of Rs. 23,728,031/- netted off with interest on IPO proceeds of Rs. 21,635,806/-. In the previous year the exceptional item of Rs. 62,772,718/- was relating to the difference between State Administered Price and Statutory Minimum Price payable as upheld by the Hon'ble Supreme Court, the amount pertaining to earlier years.

17. The company is required to pay purchase tax to Uttar Pradesh Government on all its purchases of sugarcane during the seasons 2001-2002, 2002-2003 , 2003-2004 and 2004-2005 @ Rs. 2 per quintal vide State Government Circular nos 4000/C.D/46-2000-31401/98-99 dated 27th October 2001, 2736/S/CHI.U.ANU-1/02-1623/96 dated 11th December2002,182S.CHI.U.ANU-1704-1623/96 dated 30th January 2004 and 4195/S. CHI.U.ANU.-1/-1606/2004 dated 12th January 2005 respectively. Out of this, Rs. 1.75 per quintal is payable to farmers as part of State Administered Price (SAP) declared by the State Government and balance of Rs. 0.25 per quintal is payable to the Government Treasury.

The circulars have also fixed the cane price payable for each season for different varieties of cane purchased from the farmers. The cane price paid to farmers includes Rs.1.75 per quintal, as aforesaid. The total amount debited to purchases on account of the above for the year is Rs. 14,052,860/-. The company has paid to the Government Treasury balance and filed necessary returns in this regard.

18. Sundry Debtors/Creditors and Loans and Advances balances are subject to confirmation and reconciliation.

19. (a) As per information available on records, there are no dues to small scale industrial undertaking (SSI) outstanding for more than 30 days.

(b) The company has not made any delays in settlement of balances due to small-scale undertakings and hence no provision for interest on delayed payment is required.

20. During the year, the company has raised funds amounting to Rs. 325,278,525/-, through Initial Public Offer (IPO) of 5,004,285 equity shares of Rs. 10/- each, fully paid up, at a premium of Rs.55/- per share. Necessary procedural formalities for allotment and listing of the equity shares have been completed. Process for issuing refund orders towards over subscription received in the offer has also been completed. The funds raised through IPO have been utilized towards putting up a new distillery, balancing of equipments and sugar green field venture under commissioning.

21. As per the Accounting Standard 28-impairment of Assets, the company has tested impairment of fixed assets to identify the impairment loss, if any. Based on the assessment of the existing assets, the realizable amount as per market price for all the units is higher than the carrying values of such units. Accordingly no impairment is required to be recognized during the year.

22. Figures for the previous year have been regrouped/reclassified, wherever necessary.

23. Segment information for the year 30th September, 2005

(i) The company does not have any Secondary Business Segment since there were no export during the year.


Sep 30, 2000

1. A Term Loans from Industrial Development Bank of India and Punjab National Bank are seemed by first charge on movable fixed assets including movable plant & machineries machinery spares tools and accessories both present and future (save and except book debts). The term loans are further seemed by equitable mortgage on immovable properties situated at village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and by second charge on current assets of the company. The term loans are personally guaranteed by the Chairman & Managing Director of the Company.

B. Cash credit facilities from Punjab National Bank are secured by hypothecation of current assets of the Company viz stock of sugar, molasses, chemicals, stores & spares and are further seemed by second charge on Company's immovable properties situated at Village Bundki, and Rajpura, Post Other Medhpurasultan, Tehsil Nagina District Bijnor, Uttar Pradesh and movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The cash credit facilities are personally guaranteed by the Chairman & Managing Director of the Company.

C. The term loans (except term loan of Rs 485.50 lacs from Industrial Development Bank of India, term loan of Rs. 12.37 lacs from Government of India (Sugar Development Fund) and interest free loan of Rs 1,000 lacs from ICICI and interest free loan of Rs 121.05 lacs from Pradeshiya Industrial & Investment Corporation of U.P. Limited) and cash credit facilities are also guaranteed by the promoter companies, viz. (a) Morarka Finance Limited (b) Yashodhan Industrial Investments Company Limited and (c) Morarka Investments Private Limited.

D. Term loan from Government of India (Sugar Development Fund) is secured by second charge on movable fixed assets including plant & machineries, machinery spares tools and accessories, both present and future (save and except book debts) and on the Company's immovable properties situated at Village Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnore, Uttar Pradesh, ranking pari passu with the charge already created in favour of Punjab National Bank to secure its working capital facility. The term loan is further secured by second charge on the current assets of the Company ranking pari passu with the charge already created in favour of Industrial Development Bank of India and Punjab National Bank to secure then term loans.

E. Interest free loan (except for Rs. 1,213,665/- added during the year) from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by second charge on Company's immovable prosperities situated at Village Bundki, and Rajupura, Post Office Medhpurasultan, Tehsil Nagina District Bijnore, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The charge ranks pari-passu with the charges already created in favour of Punjab National Bank in respect of cash credit facilities extended by them and the term loan from Government of India (Sugar Development Fund).

2. Contingent liability not provided for

1999-2000 1998-1999 Rupees Rupees

a) In respect of excise duty on Uttar Pradesh State administrative charges levied on sale of Molasses 416,893 416,893

b) In respect of show cause notices from Central Excise Department regarding MOD VAT claims on capital goods disputed by the Department and levy of penalty and interest on the above amount due against which the company has preferred an appeal 3,383,437 7,345,804

c) In respect of suit filed by Nagina Cane Development Society towards differential price payable to the farmers 5,880,288 5,880,288

3. Estimated excise duty of Rs. 28,549,205/- (Previous year Rs. 24,453,106/-) on finished goods lying in the excise bonded warehouse but not cleared before 30th September, 2000 has not been provided and hence not included in the inventory valuation. However, there is no effect on the profit for the period on account of the above treatment.

4. Estimated amount of contracts remaining to be executed on capital account, net of advances, and not provided for Rs. 225,745/- (previous year Rs. 3,125,458/-)

5. Manufacturing & operating expenses include Rs. 1,015,625/- (previous year Rs. 891,572/-) representing expenditure incurred on research & development.

6. Additional information pursuant to Paragraphs 3 & 4 of Part II, Schedule VI, of the Companies Act, 1956.

7. Loans and Advances include Rs 2,330,519/ representing sales tax and interest thereon paid under protest under applicable Trade & Sales Tax Act, as a matter of abundant caution based on the enquiry by Uttar Pradesh Trade tax authorities in respect of diesel provided to contractors/sugar cane transporters. However, the company is confident of the non applicability of any sales tax levy on this score as diesel has been provided strictly for the activities directly related to the manufacturing process. The issue of diesel has also not been classified under revenue and has always been treated as a store consumption item. The company has paid the amount purely to establish its bonafide intentions and is confident of settling the issue in its favour and does not consider the necessity for making any provision.

8. Loans and advances include Rs 100,000,000/ (Rs Ten crores only) paid to a company as deposit under Memorandum of understanding dated 16th May, 2000 towards identifying projects for investment and/or acquisitions by the company

9. The company is covered by the provisions of section 115JB of the Income Tax Act 1961 since there is no taxable income for the period and accordingly provision for income tax has been made for the period Provision for Wealth Tax has been made proportionately for the period up to 30th September 2000 as per the provisions of Wealth Tax Act 1957. The provision for Income tax for the period is the aggregate of the provision made for the six months ended 31st March 2000 and the estimated provision based on the taxable income earned for the six months upto 30th September, 2000, the ultimate liability of which will be determined on the basis of the Income for the period from 1st April, 2000 to 31st March, 2001.

10. Hitherto, the company has been depreciation computers (including accessories and peripherals) on SLM basis at the rates and in the manner specified in the Schedule XIV to the Companies Act, 1956 During the year the company has changed the rate of depreciation for computers (including accessories and peripherals) from 1621% to 100% irrespective of the date of addition. Retrospectively. Consequent to the above, depreciation for the year is higher by Rs 5,069,528/ and profit before tax lower by Rs 2,501,604/ and reserves lower by Rs 2,295,222/-.

11. The company has not capitalized any borrowing cost during the year.

12. Figures for the previous year have been regrouped / reclassified, wherever necessary.


Sep 30, 1999

1. A. Term Loans from Industrial Development Bank of India and Punjab National Bank are secured by first charge on movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The term loans are further secured by equitable mortgage on immovable properties situated at village Bundki and Rajpura, Post office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and by second charge on current assets of the company. The term loans are personally guaranteed by the Chairman & Managing Director of the Company.

B. Cash credit facilities from Punjab National Bank is secured by hypothecation of current assets of the Company viz. stock of sugar, molasses, chemicals, stores & spares, and are further secured by second charge on Company's immovable properties situated at Village Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh and movable fixed assets including movable plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The cash credit facilities are personally guaranteed by the Chairman & Managing Director of the Company.

C. The term loans (except term loan of Rs 1,728.50 lacs from Industrial Development Bank of India, term loan of Rs. 37.13 lacs from Government of India (Sugar Development Fund) and interest free loan of Rs. 81.08 lacs from Pradeshiya Industrial & Investment Corporation of U.P. Limited) and cash credit facilities are also guaranteed by the promoter companies, viz. (a) Morarka Finance Limited (b) Yashodhan Industrial Investments Company Limited and (c) Morarka Investments Private Limited.

D. Term loan from Government of India (Sugar Development Fund) is secured by second charge on movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts) and on the Company's immovable properties situated at Village Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnor, Uttar Pradesh, ranking pari passu with the charge already created in favour of Punjab National Bank to secure its working capital facility. The term loan is further secured by second charge on the current assets of the Company ranking pari passu with the charge already created in favour of Industrial Development Bank of India and Punjab National Bank to secure their term loans.

E. Interest free loan from Pradeshiya Industrial & Investment Corporation of UP Limited is secured by second charge on Company's immovable properties situated at Village Bundki, and Rajpura, Post Office Medhpurasultan, Tehsil Nagina, District Bijnore, Uttar Pradesh and movable fixed assets including plant & machineries, machinery spares, tools and accessories, both present and future (save and except book debts). The charge ranks pari-passu with the charges already created in favour of Punjab National Bank in respect of cash credit facilities extended by them and the term loan from Government of India (Sugar Development Fund).

2. Contingent liability not provided for :

1998-99 1997-98 Rupees Rupees

(a) In respect of excise duty on Uttar Pradesh State administrative 417,038 417,038

charges levied on sale of Molasses 7,345,659 12,307,321

(b) In respect of show cause notices from Central Excise department regarding MODVAT claims on capital goods disputed by the department of levy of penalty and interest on the above amount due against which the company has preferred an appeal

(c) In respect of suit filed by Nagina Cane Development Society towards 5,880,288 5,880,288 differential price payable to the farmers

3. Estimated excise duty of Rs. 24,453,106/- (previous year Rs. 20,929,242/-) on finished goods lying in the excise bonded warehouse but not cleared before 30th September, 1999 has not been provided and hence not included in the inventory valuation. However, there is no effect on the profit for the year on account of the above treatment.

4. Estimated amount of contracts remaining to be executed on capital account, net of advances, and not provided for Rs. 3,125,458/- (Previous year Rs. 6,781,969/-).

5. Hitherto, by product generated by the Company had been valued at net realisable value. However during the current year the same has been valued at cost and accordingly the inventory value and profit before taxes is lower by Rs.2,097,838/- and the reserves is lower by Rs.1,855,538/- (net of taxes).

6. The Company has reviewed the risk associated with the year 2000 problem concerning computer systems used by them, their customers and suppliers as a going concern. The company believes that in view of the remedial steps taken, the Y2K problem will have no material adverse effect on the Company's financial statements. Necessary contingency plan has been taken to solve the problem, if any, before the deadline set for the same, in order to minimise any disruptions that may arise. The Company is in a position to meet the cost, which is not material.

7. Manufacturing & operating expenses include Rs. 891,572/- (previous year Rs. 750,545/-) representing expenditure incurred on research & development.

8. Future liability on account of assets taken on lease is Rs. Nil (Previous year Rs. 129,700/-).

9. Sundry debtors include Rs. Nil (Previous year Rs. 923,434/-) being amount receivable from the Government of India in respect of differential selling price of free sale sugar for Public Distribution System.

10. The company is covered by the provisions of section 115JA of the Income Tax Act, 1961 for the year and accordingly provision for income tax has been made after considering applicable exemptions as determined by the management. Provision for taxation includes wealth tax provision of Rs. 78,793/-.

11. The provision for Income tax for the year is the aggregate of the provision made for the six months ended 31st March, 1999 and the estimated provision based on the taxable income earned for the six months upto 30th September, 1999, the ultimate liability of which will be determined on the basis of the income for the period from 1st April, 1999 to 31st March, 2000.

உடனடி நியூஸ் அப்டேட்டுகள்
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X