Notes to Accounts of Bannari Amman Sugars Ltd.

Mar 31, 2024

l) Provisions and Contingencies

Provision is recognised only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources embodying economic benefits to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Contingent liabilities are disclosed when there is a possible obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of obligation cannot be measured reliably. When the possible obligation in respect of which the outflow of resources embodying economic benefits is remote, it is not been disclosed as Contingent Liability.

m) Income Tax

Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current Tax

Current tax is the amount of income tax payable in respect of taxable profit for the year. The taxable profit differs from profit before tax as reported in Statement of Profit and Loss because of items of income or expenses that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period for the amount expected to be paid to / recovered from the taxation authorities.

Minimum Alternate Tax (MAT) credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the sufficient taxable profit will be available against which the MAT credit can be utilised.

Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statement and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised on all temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of an asset or liability in a transaction (other than a business combination) affects neither accounting profit nor taxable profit (tax loss).

Deferred tax assets are recognised for the carry forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised based on the review at the end of each reporting period by the company considering the likely timing and the level of

future taxable profits together with future tax planning strategies.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities.

As per the company''s assessment on uncertainty over tax treatment on recognising Income tax with respect to Appendix C amendment, there are no material uncertainties over tax treatments.

Presentation of Current and Deferred Tax

Current and deferred tax is recognised in the statement of profit and loss except to the extent it relates to items recognised in other comprehensive income or directly in equity. In such cases, the tax is also recognised in other comprehensive income.

The company offsets current tax assets and current tax liabilities, where it is legally enforceable right to set off the recognised amount and where it intends either to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

In case of deferred tax assets and deferred tax liabilities, the company offsets only when they relate to income taxes levied by the same taxation authorities and it has legally enforceable right to set off current tax assets against current tax liabilities..

n) Employee Benefits

Short Term Employee Benefits

All employee benefits payable within twelve months of rendering service are classified as short term employee benefits and are recognised in the period

in which the employee renders the related service. The Company recognises the undiscounted amount of short term employee benefits expected to be paid as a liability after deducting the amount already paid.

Post-employment Benefits

The Company operates the following postemployment schemes:

a) defined contribution plans such as provident fund; and

b) defined benefit plans such as gratuit Defined Contribution Plans

Defined Contribution Plans are Provident Fund, Employee State Insurance scheme and Government administered Pension Fund scheme for all applicable employees.

The company recognises contribution payable to a defined contribution plan as expenses in the statement of profit and loss when the employee renders services to the company during the reporting period. If the contribution payable for services received from employee before the reporting date exceeds the contribution already paid, the deficit payable is recognised as a liability after deducting the contribution already paid.

Defined Benefit Plans Gratuity obligations

Defined Contribution Plans are Provident Fund, Employee State Insurance scheme and Government administered Pension Fund scheme for all applicable employees. The company recognises contribution payable to a defined contribution plan as expenses in the statement of profit and loss when the employee renders services to the company during the reporting period. If the contribution payable for services received from employee before the reporting date exceeds the contribution already paid, the deficit payable is recognised as a liability after deducting the contribution already paid..

The Company operates a defined benefit plan for employees. The Company contributes to a seperate entity (a fund), towards meeting the gratuity obligation. The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by Independent actuaries using the projected unit credit method.The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows at a predetermined rate of interest based on the market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income.

Other long-term employee benefit obligations

The liabilities for earned leave which is not expected to be settled wholly within 12 months are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted at a predetermined rate of interest based on yields on Government Bonds that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in the Statement of Profit and Loss.

o) Operating Segments

Operating segments are identified in accordance with the criteria set out in paragraphs 5 to 10 of Ind AS 108 viz. a component of an entity that engages in business activities from which the company earns revenues and incur expenses and the operating results are regularly reviewed by the entity''s Chief

Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and assess the performance for which discrete financial information is available.

The operating segments are reported after taken into consideration of aggregation criteria and quantitative threshold as mentioned in Para 12 and 13 of Ind AS 108.

Operating segments are reported in a manner consistent with the internal reporting provided to the CODM of the company. The CODM is responsible for allocating the resources and assessing the performance of the operating segments of the company.

p) Leases

The Company''s significant leasing arrangements are operating leases and cancelable in nature.

Company as Lessor

The lease rental income under agreements are recognised in the statement of profit and loss as per the terms of the lease. The rental income from operating lease is generally recognised on a straight line basis over the term of relevant lease. When the rentals are structured solely to increase in line with expected general inflation to compensate for the Company''s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Contingent rental income arising under operating leases are recognised as income in the period in which they accrue.

Company as Lessee

The Company''s lease asset classes primarily consists of leases for land and building. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified assets, the Company assesses whether: (i) the right to obtain substantially all of the economic

benefits from use of the identified asset through the period of the lease and (ii) the right to direct the use of the asset.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received

The Right-of-Use-Asset is subsequently measured at cost less any accumulated depreciation thereon. The right-of-use asset is depreciated using the straightline method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rate. Lease liabilities are remeasured with a corresponding adjustment to the related Right-of-Use asset if the Company changes its assessment of whether it will exercise an extension or a termination option.

Lease liability and Right-of-Use asset have been presented in the Balance Sheet and lease payments have been classified as cash flows from financing activities. The Interest expense and depreciation relating to Right-of- Use Asset have also been disclosed in the statement of profit and loss.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases and leases of low-value assets. The Company recognises such lease payments relating to these leases as an expense on a straight-line basis over the lease term.

q) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit or loss is adjusted for the effects of transactions of non cash nature, any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the company are segregated based on the available information.

For the purpose of presentation of cash flow statement, cash and cash equivalents includes cash on hand, cheques on hand, bank balances, demand deposit with banks where the original maturity is three months or less and other short term highly liquid investments.

r) Borrowings

Borrowings are initially recognised at net of transaction costs incurred and are subsequently measured at amortised cost.

s) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of those assets. Borrowing costs capitalisation be commenced by the company when (i) incurs expenditure for the asset (ii) incurs borrowing cost (iii) incurs activities that are necessary to prepare the asset for its intended use or sale. All other borrowing costs are recognised as an expense in the statement of profit and loss in the period in which they are incurred.

t) Events occuring after balance sheet date

Where events occurring after the Balance Sheet date

provide evidence of conditions that existed at the end of thereporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after theBalance Sheet date of material size or nature are only disclosed.

u) Recent Accounting Pronouncements and Application:

Ministry of Corporate Affairs ("MCA") vide notification dated March 31,2023 has amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023 and the amendements are applicable with effect from April 1,2023. The amendments are as follows :

Ind AS 1 - Presentation of Financial

Statements

This amendment prescribes "Disclosure of accounting policy information", which requires the entity to disclose material accounting policies instead of significant accounting policies in the financial statements. The Company has assessed that this amendment has no significant impact on the financial statements.

Ind AS 8 - Accounting policies, Changes in Accounting estimates and errors

This amendment replaces the definition of a change in accounting estimates with the new definition of accounting estimates to clarify the entity on the accounting estimates, treatment of change in accounting estimates and accounting policies. The Company has assessed that this amendment has no significant impact on the financial statements.

Ind AS 12 - Income Tax

This amendment has narrowed the exceptions on initial recognition that the exception is not applicable to the transactions which give rise to equal taxable and deductable temporary differences on initial recognition. The Company has assessed that this amendment has no impact on the financial statements.

Description of nature and purpose of Reserve :

Capital Reserve is utilised in accordance with the Act and not available for distribution by way of dividend

Securities Premium represents premium on issue of shares. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

Capital Redemption Reserve is created for redemption of Preference Shares and it is not available for distribution by way of dividend

General Reserve is created out of retained earnings from time to time.

Retained Earnings: Retained Earnings are the profits that the company has earned till date of the balance sheet less any transfers to other reserves and dividend paid to the shareholders, if any.

Other Comprehensive Income: Other Comprehensive Income represents the cumulative gain/loss arising on measurement of Equity Instruments at fair value and remeasurement of Defined Benefit Obligation. This would not be reclassified to the statement of profit and loss

20.1 Rupee term loan of Nil ('' 300 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable fixed assets of Sugar Unit I.

The loan carries Interest at the rate of 1Year MCLR and repayable in 20 equal quarterly instalments starting from December 2018.

The loan amount repayable within twelve months of Nil ('' 300 Lakhs) is grouped under Short Term Borrowings.

20.2 Rupee term loan of '' 2625 Lakhs ('' 4125 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable fixed assets of Distillery Plant at Unit II.

The loan carries Interest at the rate of 0.30% over applicable six months MCLR and repayable in 20 equal quarterly instalments from March 2021.

The loan amount repayable within twelve months of '' 1500 Lakhs ('' 1500 Lakhs) is grouped under Short Term Borrowings.

20.3 Working Capital Rupee term loan of '' 7500 Lakhs ('' 12500 Lakhs) from The Federal Bank Ltd is secured by way of exclusive charge against receivable from TANGEDCO for supply of power from Cogeneration units and Wind mills.

The loan carries Interest at the rate of Repo Rate plus sperad of 1.40% and repayable in 12 equal quarterly instalments from December 2022

The loan amount repayable within twelve months of '' 5000 Lakhs ('' 5000 Lakhs) is grouped under Short Term Borrowings.

20.4 Loan from Sugar Development Fund (Government of India) availed for modernisation of Sugar Unit-I, amounting to '' 1025.66 Lakhs ('' 1139.62 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Plant at Unit-I.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and payment of interest thereon commences after the expiry of one year from the repayment of bank term loan and interest thereon or on the expiry of a period of 5 years reckoned from the date of disbursement whichever is earlier in ten half yearly instalments.

The loan amount repayable within twelve months of '' 227.92 Lakhs ('' 113.96 Lakhs) is grouped under Short Term Borrowings.

20.5 Loan from Sugar Development Fund (Government of India) availed for modernisation cum expansion of Sugar Unit-III, amounting to '' 1520.12 Lakhs ('' 2128.17 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Plant at Unit-III.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement and repayable in ten half yearly i nstalments from December 2021.

The loan amount repayable within twelve months of '' 608.04 Lakhs ('' 608.04 Lakhs) is grouped under Short Term Borrowings.

20.6 Loan from Sugar Development Fund (Government of India) availed for setting up of 20 MW bagasse based cogeneration plant at Sugar Unit-III, amounting to '' 631.65 Lakhs ('' 1053.20 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Cogeneration Plant at Unit-III.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Interest shall be paid half yearly for the first three years from the date of each disbursement after which it shall be paid half yearly alongwith repayment of principal.

Repayment of principal shall commence after expiry of three years reckoned from the date of each disbursement and it shall be paid in ten half yearly instalments.

The loan amount repayable within twelve months of '' 421.55 Lakhs ('' 421.55 Lakhs) is grouped under Short Term Borrowings.

20.7 Loan from Sugar Development Fund (Government of India) availed for expansion of distillery plant at Sugar Unit-II from 60 KLPD to 150 KLPD for production of ethanol from molasses with spent wash incineration to achieve ZLD, amounting to '' 2300.75 Lakhs ('' 3451.13 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Unit - II.

The loan carries interest at the date of 2% below the bank rate prevailing on the date of disbursement. Repayment of loan shall commence after the expiry of one year from the date of each disbursement of the loan and shall be in eight half yearly instalment. The interest shall be paid annually for the first year from the date of disbursement after which it shall be paid half yearly alongwith instalments.

The loan amount repayable within twelve months of '' 1150.38 Lakhs (''1150.38 Lakhs) is grouped under Short Term Borrowings.

20.8 The purchase tax of '' 103.24 Lakhs ('' 171.29 Lakhs) payable to Government of Karnataka for purchase of Sugarcane to Sugar Unit III during the years ended 31.03.2015 and 31.03.2016 has been converted into interest free loan. The loan is secured by issue of Bank Guarantee from ICICI Bank Limited. The loan is repayable

in five annual instalments from the sixth year of Conversion into Loan.

The loan amount repayable within twelve months is '' 68.05 Lakhs ('' 68.05 Lakhs) is grouped under Short Term Borrowings.

20.9 None of the Directors has given any Security or Guarantee to any borrowings.

25.1 Cash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank, The Federal Bank Ltd, The Karur Vysya Bank Ltd, Indian Overseas Bank, State Bank of India, Bank of India, Axis bank Ltd, ICICI Bank Ltd and The HDFC Bank Ltd to the company are secured by way of hypothecation of current assets and other movable block assets of the sugar units I, II, III, IV and V and third mortgage on the immovable properties of the Sugar units I, II, III, IV and V.

The credit limit availed as at 31.03.2024 is '' 17851.52 Lakhs ('' 20688.23 Lakhs)

The availed limits are repayable on demand and carries interest rates between Bank''s MCLR plus 0% and 1.85% per annum.

23.2 The Unsecured short term loan of Nil ('' 12500 lakhs) from The Federal Bank Ltd is repayable within ninety days from the date of availment and carries interest at 7.35% per annum.

The Unsecured short term loan of '' 3500 lakhs (Nil) from The Federal Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at 7.45% per annum.

The Unsecured short term loan of '' 8500 lakhs (Nil) from The Federal Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at 7.50% per annum.

The Unsecured short term loan of '' 3000 lakhs (Nil) from The Federal Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at 7.60% per annum.

NOTE 45. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) CONTINGENT LIABILITIES

45. 1. The company has preferred a Writ Appeal before the Division Bench of the Hon''ble High Court, Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is '' 594.89 Lakhs.

45.2. The Company has received a demand for payment of excise duty for '' 148.44 lakhs on the machineries purchased for cogeneration plant in Sugar Unit-II which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon''ble High Court of Madras.

proceedings of the above mentioned assessment years.

45.3 The Company has Income Tax demand of '' 139.36 lakhs for the assessment years from 2015-16 to 2018-19 and '' 358.45 lakhs for the assessment year 2021-22. The Company has filed appeal before Commissioner of Income Tax (Appeals) in respect of the income tax

COMMITMENTS

45.4. Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is '' 4801.54 Lakhs ('' 8120.07 lakhs).

NOTE 48. DISCLOSURE UNDER IND AS 19 Contd.... :

ii) DEFINED BENEFIT PLAN :

GRATUITY

The company provides the Gratuity benefit through annual contributions to the fund managed by Life Insurance Corporation of India (LIC).

The defined benefit plans expose to the actuarial risks such as:

a) Interest Rate Risk:

The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to government bond yields. 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 obligation.

b) Salary Risk:

The present value of the defined benefit plan is calculated based on the salary of plan participants in the future. Accordingly, an increase in salary of the plan participants will increase the defined benefit obligation and will have an exponential effect.

c) Investment Risk:

The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to government bond yields. If there are significant changes in the discount rate during the inter valuation period, it can result in wide fluctuations in the net liability or plan assets.

d) Variability in mortality rates:

The present value of the defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. If actual mortality rates are higher than the assumed mortality rate assumption, there is a risk of payment of gratuity benefits earlier than expected.

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 operations. The Company''s principal financial assets include investments, trade receivables, cash and cash equivalents, Bank Balance other than cash and cash equivalent, loans and other financial assets that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management under the supervision of Risk management committee / Board of Directors oversees the management of these risks and the appropriate financial risk governance framework for the Company. 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.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market price. Market risk comprises three types of risk: interest rate risk, currency risk and other risks, such as regulatory risk and commodity price risk. Financial Instruments affected by market risk includes investment, borrowings, trade receivable, trade payable and loans.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s borrowings obligations with floating interest rate. Interest rate risk is managed by maintaining a combination of fixed and floating rate debt and cash management policies.

The carrying amount of Company''s borrowings at the end of the reporting period is as under:

iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. The Company is exposed to price risk arising mainly from investments in equity instruments recognised at FVTOCI. As at 31st March, 2024, the carrying value of such equity instruments recognised at FVTOCI amounts to '' 307.21 Lakhs ('' 168.88 Lakhs). The details of such investments in equity instruments are given in Note No 5.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument leading to a financial loss. Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. The Company had managed the credit risk with respect to trade receivables by selling majority of sugar sales covering minimal portion on credit basis.

The Company''s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties. The company manages the risk by credit

aprroval. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified.

The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each balance sheet date. The company has recognised provision for Expected Credit Loss on the financial assets in the statement of Profit & Loss.

Financial assets are written off when there is no reasonable expectation of recovery. However, the Company continues to attempt to recover the receivables and are recognised in the Statement of Profit and Loss when recovered.

c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result for an inability to sell a financial asset quickly close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

The objective of Capital Management is to safeguard its ability to continue as a going concern and optimise the returns to shareholders. Capital includes paid up equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company and debt refers to Long Term Borrowings, Short Term Borrowings and Interest accrued thereon for the purpose of Capital Management of the Company.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of the financial covenants. The capital structure of the Company consist of net debt and total equity of the Company.

In order to achieve this overall objectives, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

NOTE 61. RECOGNITION OF LATE PAYMENT SURCHARGE (LPSC)

The Company has recognised Nil ('' 3289.36 Lakhs) towards Late Payment surcharge (LPSC) upto 03.06.2022 on the receivable as on 31.03.2022 from TANGEDCO vide The Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 under Other Income. The total outstanding including LPSC will be paid by TANGEDCO in 48 monthly installments from August, 2022. The carrying amount of LPSC has been classified under Other Financial Assets in the Balance Sheet. The installments comprising receivables and LPSC beyond next twelve months is classified under non-current assets in the Balance sheet. The original due date of such trade receivables has been considered for the purpose of ageing schedule. The Expected Credit Loss on such receivables has been disclosed under Other Expenses in Statement of Profit & Loss.

NOTE 62. ADDITIONAL REGULATORY INFORMATION

i) Title Deed of Immovable Properties not held in the name of the Company:

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

ii) Fair Value of Investment Property :

The Company as on the reporting date doesn''t have any Investment Property.

iii) Revaluation of Property, Plant and Equipment :

The Company has not revalued the Property, Plant and Equipment during the year.

iv) Revaluation of Intangible Assets :

Not Applicable.

v) Loans and advances granted to Promoters, Directors, KMPs and the related parties :

The Company has not granted any loans to promoters, directors, KMPs and the related parties as defined under Companies Act, 2013 either jointly or severally with any other person that are repayable on demand or without specifying any terms or period of repayment.

vi) Capital Work-in-Progress :

The ageing schedule of Capital Work-in-Progress has been disclosed in Note No. 2 - Property, Plant and Equipment.

vii) Intangible Assets under development :

Not Applicable.

viii) Details of Benami Property :

Nil

ix) Reconciliation of Statement of Current Assets filed by the Company with banks for Working Capital facilities availed by the Company:

Name of the Bank : Punjab National Bank (Consortium Leader).

Particulars of Security Provided : Current Assets of Sugar and Granite Division.

x) Wilful Defaulter : The Company has not been declared wilful defaulter.

xi) Relationship with struck off companies : Nil

xii) Registration/ Satisfaction of charges with Registrar of Companies : The Company does not have any charges yet to be registered or file the satisfaction of charges with Registrar of Companies beyond the statutory period.

xiii) Layers of Companies : The Company does not have any subsidiary or associate company.

xiv) Approved Scheme of Arrangements: Nil

xv) Utilisation of Borrowed funds and Share premium:

A) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall 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 provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall 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 provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

NOTE 63. Previous year''s figures have been regrouped / reclassified wherever necessary.

NOTE 64. EVENTS OCCURING AFTER BALANCE SHEET DATE - PROPOSED DIVIDEND

The Board of Directors at its meeting held on 23^rd May 2024 has recommended a payment of final dividend of '' 12.50/- per equity share for the year ended 31^st March, 2024 amounting to '' 1567.46 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

NOTE 65. APPROVAL OF FINANCIAL STATEMENTS

The Financial statements are reviewed and recommended by Audit Committee and approved for issue by the Board of Directors at their meeting held on 23^rd May 2024.

As per our report of even date attached

For P N RAGHAVENDRA RAO & CO., ^{S V BALASUBRAMAN}I^{AM B SAR}AV^ANAN

Chartered Accountants - Firm Regn No. : 003328S ^{Chairman Mana}gⁱⁿg Wredoc

DIN 00002405 DIN 00002927

P. R. VITTEL

Partner

M No 0₁8₁₁₁ ^{C PALAN}>^SWAMY M RAMPRABHU

^Comp^any ^Secretary Chief Financial Officer

Place : Coimbatore Date : 23.05.2024

---

Mar 31, 2023

a. Terms/rights attached to equity shares

The company has issued only one class of equity shares having face value of? 10/- each. One equity share carries one vote. The members are entitled to vote in accordance with their shareholding. The Company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Description of nature and purpose of Reserve :

Capital Reserve is utilised in accordance with the Act and not available for distribution by way of dividend

Securities Premium represents premium on issue of Shares. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

Capital Redemption Reserve is created for redemption of Preference Shares and it is not available for distribution by way of dividend

General Reserve is created out of retained earnings from time to time.

Retained Earnings: Retained Earnings are the profits that the company has earned till date of the balance sheet less any transfers to other reserves and dividend paid to the shareholders, if any.

Other Comprehensive Income: Other Comprehensive Income represents the cumulative gain/loss arising on measurement of Equity Instruments at fair value and remeasurement of Defined Benefit Obligation. This would not be reclassified to the statement of profit and loss.

18.1 Rupee term loan of 7 300 Lakhs (7 700 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable fixed assets of Sugar Unit I.

Theloancarrieslnterestattherateof 1 YearMCLR and repayable in 20 equal quarterly instalments starting from December 2018

The loan amount repayable within twelve months of 7 300 Lakhs (7 400 Lakhs) is grouped under Short Term Borrowings.

18.2 Rupee term loan of 74125 Lakhs (7 5625 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable fixed assets of Distillery Plant at Unit II.

The loan carries Interest at the rate of 0.20% over applicable six months MCLR and repayable in 20 equal quarterly instalments from March 2021

The loan amount repayable within twelve months of 71500 Lakhs (71500 Lakhs) is grouped under Short Term Borrowings.

18.3 Working Capital Rupee term loan of 7 12500 Lakhs (Nil) from The Federal Bank Ltd is secured by way of exclusive charge against receivable from TANGEDCO lor supply of power from Cogeneration units and Wind mills.

The loan carries Interest at the rate of Repo Rate plus sperad of 1.40% and repayable in 12 equal quarterly instalments from December 2022

The loan amount repayable within twelve months of 7 5000 Lakhs (Nil) is grouped under ShortTerm Borrowings.

18.4 Loan from Sugar Development Fund (Government of India) availed for modernisation of Sugar Unit-1, amounting to

passu first charge basis on the immovable and movable properties of Sugar Plant at Unit-1.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and payment of interest thereon commences after the expi ry of one year from the repayment of bank term loan and interest thereon or on the expiry of a period of 5 years reckoned from the date of disbursementwhichever is earlier in ten half yearly instalments.

The loan amount repayable within twelve months of 7 113.96 Lakhs (Nil) is grouped under ShortTerm Borrowings.

18.5 Loan from Sugar Development Fund (Government of India) availed for modernisation cum expansion of Sugar Unit-Ill, amounting to 7 2128.17 Lakhs (7 2736.21 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Plant at Unit-Ill.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement and repayable in ten half yearly instalments from December 2021.

The loan amount repayable within twelve months of 7 608.04 Lakhs (7 608.04 Lakhs) is grouped under Short Term Borrowings.

18.6 Loan from Sugar Development Fund (Government of India) availed for setting up of 20 MW bagasse based cogeneration plant at Sugar Unit-Ill, amounting to 7 1053.20 Lakhs (7 1474.75 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Cogeneration Plant at Unit-Ill.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Interest shall be paid half yearly for the first three years from the date of each disbursement after which it shall be paid half yearly alongwith repayment of principal.

Repayment of principal shall commence after expiry of three years reckoned from the date of each disbursement and it shall be paid in ten half yearly instalments.

The loan amount repayable within twelve months of 7 421.55 Lakhs (7421.55 Lakhs) is grouped under ShortTerm Borrowings.

18.7 Loan from Sugar Development Fund (Government of India) availed for expansion of distillery plant at Sugar Unit-ll from 60 KLPD to 150 KLPD for production of ethanol from molasses with spent wash incineration to achieve ZLD, amounting to 7 3451.13 Lakhs (7 4601.50 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Unit-ll.

The loan carries interest at the date of 2% below the bank rate prevailing on the date of disbursement. Repayment of loan shall commence after the expiry of one year from the dale of each disbursement of the loan and shall be in eight half yearly instalment. The interest shall be paid annually for the first year from the date of disbursement after which it shall be paid half yearly alongwith instalments.

The loan amount repayable within twelve months of ? 1150.38 Lakhs (? 1150.38 Lakhs) is grouped under Short Term Borrowings.

18.8 The purchase tax of ? 171.29 Lakhs (? 239.34 Lakhs) payable to Government of Karnataka for purchase of Sugarcane to Sugar Unit III during the years ended 31.03.2015 and 31.03.2016 has been converted into interest free loan. The loan is secured by issue

of Bank Guarantee from ICICI Bank Limited. The loan is repayable in five annual instalments from the sixth year of Conversion into Loan

The loan amount repayable within twelve months is ? 68.05 Lakhs (? 68.05 Lakhs) is grouped under ShortTerm Borrowings.

18.9 None of the Directors has given any Security or Guarantee to any borrowings.

23.1 Cash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank, Canara Bank, The Federal Bank Ltd, The Karur Vysya Bank Ltd, Indian Overseas Bank, State Bank of India, Bank of India, Axis bank Ltd, ICICI Bank Ltd and The HDFC Bank Ltd to the company are secured by way of hypothecation of current assets and other movable block assets of the sugar units I, II, III, IV and V and third mortgage on the immovable properties of the Sugar units I, II, III, IVandV.

The credit limit availed as at 31.03.2023 is '' 20688.23 Lakhs ('' 49979.89 Lakhs)

The availed limits are repayable on demand and

carries interest rates between Bank''s MCLR plus 0% and 1.85% perannum.

23.2 The Unsecured Short term loan of Nil (? 8000 Lakhs) from HDFC Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at the rate of 4.50% perannum.

The Unsecured short term loan of ? 12500 lakhs (? 12500 lakhs) from The Federal Bank Ltd is repayable within ninety days from the date of availment and carries interest at 7.35% perannum.

The Unsecured short term loan of Nil (? 9000 lakhs) from Axis Bank Ltd is repayable within a period ranges from thirty days to one hundred and eighty days from the date of availment and carries interest at 4.50% perannum.

43. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) CONTINGENT LIABILITIES

43.1. The company has preferred a Writ Appeal before the Division Bench of the Hon''ble High Court, Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is ? 608.45 Lakhs (? 577.24 Lakhs)

43.2. Sugar Unit-1 at Sathyamangalam was permitted to sell 100% of the sugar

production as Free Sugar for a period of 8 years from 1985-86 Sugar Reason. Chief Director (Sugar), Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar. The approximate unprovided quantum under dispute is?683.35 Lakhs.

43.3 The Company has received a demand for payment of excise duty for ? 148.44 lakhs on the machineries purchased for co-

generation plant in Sugar Unit-ll which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon''ble High Court of Madras.

43.4 The Company has Income Tax demand of '' 139.36 lakhs for the assessment years from 2015-16 to 2018-19. The Company has preferred appeal before Commissioner of Income Tax (Appeals) in respect of the Income Tax proceedings of the above mentioned assessmentyears.

COMMITMENTS

43.5. Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is ? 8120.07 Lakhs (?2116.49 lakhs).

i) The Interest on lease liabilities is included under Finance Costs in the Statement of Profit & Loss

ii) The payment of Principal and Interest on lease liabilities has been disclosed under Financing activities in the statement of cash flow.

45. DISCLOSURE UNDER IND AS 19 :

i) DEFINED CONTRIBUTION PLAN :

The Company has defined contribution plan like Provident Fund and Employees State Insurance Scheme for the benefit of employees. Contributions are made at the specified rate of percentage to payroll cost as per the regulations to fund the benefits. The expenses recognised in the statement of profit and loss is ? 770.10 Lakhs (? 663.54 Lakhs)

ii) DEFINED BENEFIT PLAN :

GRATUITY

The company provides the Gratuity benefit through annual contributions to the fund managed by Life Insurance Corporation of India (LIC).

The defined benefit plans expose to the actuarial risks such as:

a) Interest Rate Risk:

The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to government bond yields. 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 obligation.

b) Salary Risk:

The present value of the defined benefit plan is calculated based on the salary of plan participants in the future. Accordingly, an increase in salary of the plan participants will increase the defined benefit obligation and will have an exponential effect.

c) Investment Risk:

The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to government bond yields. If there are significant changes in the discount rate during the inter valuation period, it can result in wide fluctuations in the net liability or plan assets

d) Variability in mortality rates:

The present value of the defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. If actual mortality rates are higher than the assumed mortality rate assumption, there is a risk of payment of gratuity benefits earlier than expected.

The following table sets out the details of the defined benefits obligations and amount recognised in the financial statements

F SENSITIVITY ANALYSIS

The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The defined benefit obligation increases / (decrease) as follows:

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

The expected contribution to the plan for the next Annual reporting period is ? 208.40 Lakhs (? 146.03 lakhs)

46. SEGMENT INFORMATION FOR THE YEAR ENDED 31ST MARCH 2023

Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts. Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Geographical revenues are allocated based on the location of the customer. The Company has the following operating segments, which are its reportable segments.

Operating segment disclosures are consistent with the information provided to and reviewed by the Chief Operating Decision Maker (CODM).

These operating segments have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.

50 BORROWINGS COSTS

The Company has capitalised the specific borrowing cost of Nil (? 392.37 Lakhs) during the period which were incurred specifically to get ready the qualifying assets for their intended use.

The Company uses the following Fair Value Hierarchy for determining and disclosing the fair value of the finanicial instruments.

Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilties

Level 2 : inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 : inputs that are unobservable for the asset or liability.

The carrying amount of financial assets and liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the company does not anticipate that the carrying amount would be significantly different from the values that would eventually be received or settled.

57. FINANCIAL RISK MANAGEMENT - OBJECTIVES & POLICIES

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 Com pan/s operations. The Compan/s principal financial assets include investments, trade receivables, cash and cash equivalents, Bank Balance other than cash and cash equivalent, loans and other financial assets that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Compan/s senior management under the supervision of Risk management committee / Board of Directors oversees the management of these risks and the appropriate financial risk governance framework for the Company. The senior management provides assurance that the Compan/s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Compan/s policies and risk objectives.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market price. Market risk comprises three types of risk: interest rate risk, currency risk and other risks, such as regulatory risk and commodity price risk. Financial Instruments affected by market risk includes investment, borrowings, trade receivable, trade payable and loans.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Compan/s exposure to the risk of changes in market interest rates relates primarily to the Compan/s borrowings obligations with floating interest rate. Interest rate risk is managed by maintaining a combination of fixed and floating rate debt and cash management policies.

The company determines the sensitivity of 25 basis points increase (or) decrease on borrowings with floating rate of interest. The impact on the Profit after tax at the reporting date, assuming outstanding balance and other factors remain constant for the whole year, except the rate of interest, would be ? 125.28 Lakhs (^214.51 Lakhs).

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rate. The Com pan/s exposure to the risk of changes in foreign exchange rate relates primarily to the Compan/s foreign currency denominated financial assets and financial liabilities.

The carrying amounts of the Compan/s foreign currency denominated monetary assets and liabilities at the end of the reporting period is as under.

The above table represents total exposure of the Company towards foreign exchange denominated liabilities (net). Thedetails of unhedged exposures are given as part of Note No.51.

The company determines the sensitivity of 10% increase or decrease in the foreign currency rate. The impact on the profit after tax and total equity at the reporting date, assuming other factors constant except the exchange difference will be ? 4.46 Lakhs (? 15.10 Lakhs)

iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. The Company is exposed to price risk arising mainly from investments in equity instruments recognised at FVTOCI. As at 31 st March, 2023, the carrying value of such equity instruments recognised at FVTOCI amounts to? 168.88 Lakhs (? 119.06 Lakhs). The details of such investments in equity instruments are given in Note No 5.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument leading to a financial loss. Credit risk arising from trade receivables is managed in accordance with the Compan/s established policy, procedures and control relating to customer credit risk management. The Company had managed the credit risk with respect to trade receivables by selling majority of sugar sales covering minimal portion on credit basis.

The Compan/s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties. The company manages the risk by credit aprroval. Credit quality of a customer is assessed based on a detailed study of creditworthiness and accordingly individual credit limits are defined/modified.

The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each balance sheet date. The company has recognised provision for Expected Credit Loss on the financial assets in the statement of Profit and Loss.

Financial assets are written off when there is no reasonable expectation of recovery. However, the Company continues to attempt to recover the receivables and are recognised in the Statement of Profit and Loss when recovered.

c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result for an inability to sell a financial asset quickly close to its fairvalue.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

58. CAPITAL MANAGEMENT

The objective of Capital Management is to safeguard its ability to continue as a going concern and optimise the returns to shareholders. Capital includes paid up equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company and debt refers to Long Term Borrowings, Short Term Borrowings and Interest accrued thereon for the purpose of Capital Management of the Company.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of the financial covenants. The capital structure of the Company consist of net debt and total equity of the Company.

In order to achieve this overall objectives, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

59. RECOGNITION OF LATE PAYMENT SURCHARGE (LPSC)

The Company has recognised ? 3289.36 Lakhs towards Late Payment surcharge (LPSC) upto 03.06.2022 on the receivable as on 31.03.2022 from TANGEDCO vide The Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 under Other Income. The total outstanding including LPSC will be paid by TANGEDCO in 48 monthly installments from August, 2022. The carrying amount of LPSC has been classified under Other Financial Assets in the Balance Sheet. The installments comprising receivables and LPSC beyond next twelve months is classified under non-current assets in the Balance sheet. The original due date of such trade receivables has been considered for the purpose of ageing schedule. The Expected Credit Loss on such receivables has been disclosed under Other Expenses in Statement of Profit & Loss.

60. ADDITIONAL REGULATORY INFORMATION

i) Title Deed of Immovable Properties not held in the name of the Company:

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

ii) Fair Value of Investment Property :

The Company as on the reporting date doesn''t have any Investment Properly.

x) Wilful Defaulter : The Company has not been declared wilful defaulter.

xi) Relationship with struck off companies : Nil

xii) Registration/ Satisfaction of charges with Registrar of Companies : The Company does not have any charges yet to be registered or file the satisfaction of charges with Registrar of Companies beyond the statutory period.

xiii) Layers of Companies : The Company does not have any subsidiary or associate company.

xiv) Approved Scheme of Arrangements: Nil

xv) Utilisation of Borrowed funds and Share premium:

A) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall 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 provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall 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 provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

iii) Revaluation of Property, Plant and Equipment :

The Company has not revalued the Properly, Plant and Equipment during the year.

iv) Revaluation of Intangible Assets :

Not Applicable.

v) Loans and advances granted to Promoters, Directors, KMPs and the related parties :

The Company has not granted any loans to promoters, directors, KMPs and the related parties as defined under Companies Act, 2013 either jointly or severally with any other person that are repayable on demand or without specifying any terms or period of repayment.

vi) Capital Work-in-Progress :

The ageing schedule of Capital Work-in-Progress has been disclosed in Note No. 2 - Properly, Plant and Equipment.

vii) Intangible Assets under development :

Not Applicable.

viii) Details of Benami Property :

Nil

ix) Reconciliation of Statement of Current Assets filed by the Company with banks for Working Capital facilities availed by the Company:

Name of the Bank : Punjab National Bank (Consortium Leader).

61. Previous year''s figures have been regrouped / reclassified wherever necessary.

62. EVENTS OCCURING AFTER BALANCE SHEET DATE - PROPOSED DIVIDEND

The Board of Directors at its meeting held on 24^th May 2023 has recommended a payment of final dividend of ? 12.50/- per equity share for the year ended 31 * March, 2023 amounting to ? 1567.46 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

63. APPROVAL OF FINANCIAL STATEMENTS

The Financial statements are reviewed and recommended by Audit Committee and approved for issue by the Board of Directors at their meeting held on 24* May 2023.

---

Mar 31, 2018

Appendix B to Ind AS 21

The appendix clarifies how to determine the date of transaction for the exchange rate to be used on initial recognition of the related asset, expense or income (or part of it) where an entity pays or receives consideration in advance for foreign currency-denominated contracts. For a single payment or receipt, the date of the transaction should be the date on which entity initially recognises the non-monetary asset or liability arising from advance consideration towards such assets, expenses or income. If there are multiple payments or receipts in advance, then an entity must determine transaction date for each payment or receipt of advance consideration.

The effect of this amendment on the financial statement of the company is being evaluated.

1.1 Rupee term loan of Rs. 4950 Lakhs (Rs.6750 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III .

The loan carries Interest at the rate of Bank’s Base rate plus 1% and repayable in 20 equal quarterly instalments starting from January 2016.

The loan amount repayable within twelve months Rs 1800 lakhs (Rs.1800 Lakhs) is grouped under Other Current Liabilities.

1.2 Rupee term loan of Rs. Nil (Rs.4950 Lakhs) from State Bank of India is secured by pari passu first charge on the movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III .

The loan carried Interest at the rate of Bank’s Base rate plus 1% and amount repayable during the year was Rs.1800 Lakhs. The entire loan has been repaid during November 2017

1.3 Rupee term loan of Rs. 2000 Lakhs (Nil) from HDFC Bank Ltd is secured by pari passu first charge on the movable fixed assets of Sugar Unit I.

The loan carries Interest at the rate of 1 Year MCLR rate and repayable in 20 equal quarterly instalments starting from December 2018.

The loan amount repayable within twelve months Rs 200 lakhs is grouped under Other Current Liabilities.

1.4 Rupee term loan of Rs. 1100 Lakhs (Rs.1500 Lakhs) from The Federal Bank Ltd is secured by pari passu first charge on the movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III .

The loan carries Interest at the rate of Bank’s Base rate plus 0.60% and repayable in 20 equal quarterly instalments starting from January 2016.

The loan amount repayable within twelve months Rs 400 lakhs (Rs.400 Lakhs) is grouped under Other Current Liabilities.

1.5 Corporate loan of Rs. Nil (Rs.7500 Lakhs) from State Bank of India is secured by pari passu first charge on the fixed assets (excluding vehicles) of the Sugar Complex at Sugar Unit II .

The loan carried Interest at the rate of Bank’s Base rate plus 1% and loan repayable during the year was Rs.937.50 Lakhs. The entire loan has been repaid during September 2017.

1.6 Term loan of Rs. Nil (Rs.4687.50 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the fixed assets (excluding vehicles) of the Sugar Complex at Sugar Unit II .

The loan carried Interest at the rate of Bank’s Base rate plus 1% and loan repayable during the year was Rs.1250 Lakhs. The entire loan has been repaid during November 2017.

1.7 Term loan of Rs. Nil (Rs.10000 Lakhs) from ICICI Bank Ltd is secured by pari passu first charge on the fixed assets (excluding vehicles) of the Sugar Complex at Sugar Unit II .

The loan carried Interest at the rate of Bank’s Base rate plus 0.75% and loan repayable during the year was Rs.937.50 Lakhs. The entire loan has been repaid during September 2017.

1.8 Loan from Sugar Development Fund (Government of India) availed for setting up of cogeneration plant in Sugar Unit-IV, amounting to Rs. 961.39 Lakhs (Rs.1442.09 lakhs) is secured by way of first charge on the movable and immovable properties of Sugar Unit-IV and first pari passu charge on the movable and immovable properities of cogeneration plant in Sugar Unit IV.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal commenced after the expiry of three years and in ten equal half yearly installments. The interest on the loan shall be paid half-yearly from the date of disbursement. The loan was disbursed during the financial year 2013.

The loan amount repayable within twelve months Rs 480.69 lakhs (Rs.480.70) is grouped under Other Current Liabilities.

1.9 Loan from Sugar Development Fund (Government of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit-II, amounting to Rs. 236.25 Lakhs (Rs.371.25 lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit-II.

Repayment of principal commenced after the expiry of three years and in four equal annual installments. The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. The loan was disbursed in two instalments of Rs. 270 lakhs each.The interest on the first instalment of Rs.270 lakhs disbursed during the financial year 2013 is payable annually and the interest on the second instalment of Rs.270 lakhs disbursed during the financial year 2014 is payable half yearly from the date of disbursement

The loan amount repayable within twelve months Rs 135 lakhs (Rs.135 Lakhs) is grouped under Other Current Liabilities

1.10 Loan from Sugar Development Fund (Government of India) availed for modernisation cum expansion of Sugar Unit-III, amounting to Rs. 3040.24 Lakhs (Rs.480.06 Lakhs) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar plant at Sugar Unit-III.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and payment of interest thereon commenced after the expiry of one year of the repayment the bank term loan and interest thereon or on the expiry of a period of 5 years reckoned from the date of disbursement whichever is earlier.

1.11 Loan from Sugar Development Fund (Government of India) availed for setting up of 20 MW bagasse based cogeneration plant at Sugar Unit-III, amounting to Rs. 2107.73 Lakhs (Nil) is secured by way of pari passu first charge basis on the immovable and movable properties of cogeneration plant at Sugar Unit-III.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Interest shall be paid half yearly for the first three years from the date of each disbursement after which it shall be paid half yearly alongwith repayment of principal.

Repayment of principal shall commence after expiry of three years reckoned from the date of each disbursement and it shall be paid in ten half yearly instalments.

1.12 Loan of Rs.2386.67 Lakhs (Rs.5006.67 Lakhs) under SEFASU notified by Government of India availed from Punjab National Bank, The HDFC Bank Ltd and Indian Overseas Bank is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I, II, III and IV.

The loan availed from Punjab National Bank and HDFC Bank Ltd carries interest at the rate of 12% per annum and loan availed from Indian Overseas Bank carries interest at the rate of Bank’s base rate plus 0.50%. The loan is eligible for interest subvention upto 12% and is repayble in 36 equal monthly installments after the expiry of 2 years from the date of disbursement.

The loan amount repayable within twelve months Rs 2386.67 lakhs (Rs.2620 lakhs) is grouped under Other Current Liabilities .

1.13 Loan of Rs.407.67 Lakhs (Rs.783.66 Lakhs) under SEFASU notified by Government of India availed from Central Bank of India and The Karur Vysya Bank Ltd is secured by residual first charge on all fixed assets of Sugar Unit V.

The loan availed from Central Bank of India carries interest at the rate of 12% per annum and loan availed from The Karur Vysya Bank Ltd carries interest at the rate of Bank’s base rate plus 0.50%. The loan is eligible for interest subvention upto 12% and is repayble in 36 equal monthly installments after the expiry of 2 years from the date of disbursement.

The loan amount repayable within twelve months Rs.376 Lakhs (Rs 376 Lakhs) is grouped under Other Current Liabilities.

1.14 Loan of Rs.Nil (Rs.3282.50 Lakhs) under SOFT LOAN notified by Government of India availed from The HDFC Bank Ltd and Union Bank of India is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I, II, III and IV.

The loan is eligible for interest subvention. The loan amount repayable during the year was Rs 1745 lakhs. The entire loan has been repaid during August 2017.

1.15 The interest free loan availed by Madras Sugars Limited from a related party is repayable as specified in the scheme of Amalgamation and the same will continue to be interest free loan until repayment.

1.16The purchase tax of Rs. 164.32 lakhs (Rs.164.32 lakhs) payable to Government of Karnataka for purchase of Sugarcane to sugar Unit III during the Year ended 31.03.2015 has been converted into interest free loan. The loan is secured by issue of Bank Guarantee from ICICI Bank Limited. The loan is repayable in five annual instalments from the sixth year of Conversion into Loan.

2.1 Cash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank, Canara Bank, The Federal Bank Ltd, The Karur Vysya Bank Ltd, Indian Overseas Bank, State Bank of India, Bank of India, Axis bank Ltd, ICICI Bank Ltd and The HDFC Bank Ltd to the company’s Sugar Units I, II, III and IV are secured by way of hypothecation of current assets and other movable block assets of the sugar units and third mortgage on the immovable properties of the Sugar units I, II, III and IV.

The credit limit availed as at 31.3.2018 is Rs. 15041.09 Lakhs (Rs.18522.33 Lakhs)

The availed limits are repayable on demand and carries interest rates between Bank’s base rate plus 0.25% and 1% per annum.

2.2 The Unsecured Short term loan of Rs.2500 lakhs (Rs.15000 lakhs) from HDFC Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 8% per annum.

The Unsecured short term Farmer Finance loan of Rs. 2585.74 lakhs (Rs.5418.41 lakhs) from HDFC Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at 8.05% per annum.

The unsecured loan of Rs.Nil (Rs.2028.55 lakhs) from Axis Bank Ltd repaid during the year.

The other unsecured loan of Rs. 5000 lakhs availed by M/s Madras Sugars Limited from the related parties will be repaid as specified in the scheme of amalgamation.

The vendors of the Company are yet to submit their status under Micro, Small and Medium Enterprises; hence the relevant information is not available with the company. Accordingly no disclosures relating to Micro, Small and Medium Enterprises have been made in the accounts.

3. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for) Contingent liabilities

3.1. The company has preferred a Writ Appeal before the Division Bench of the Hon’ble High Court, Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs.417.66 Lakhs (Rs. 408.14 Lakhs)

3. 2. Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season. Chief Director (Sugar), Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar.

The approximate unprovided quantum under dispute is Rs. 683.35 Lakhs.

3.3. The Entry Tax of Rs. 188.29 lakhs on Inter-state purchase of rough blocks is disputed

3.4. The Company has received a demand for payment of excise duty for Rs.148.44 lakhs on the machineries purchased for co-generation plant in Sugar Unit-II which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon’ble High Court of Madras.

3.5. The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction for the Assessment year 2013-14. The quantum under dispute is Rs.1.60 Lakhs.

3.6. Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs.277.93 Lakhs (Rs. 461.72 lakhs).

4. Segment Information for the year ended 31st March 2018

Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts. Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Geographical revenues are allocated based on the location of the customer. The Company has the following operating segments, which are its reportable segments. These operating segments have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.

1. Sugar

2. Power

3. Distillery

4. Granite Products

Operating segment disclosures are consistent with the information provided to and reviewed by the Chief Operating Decision Maker (CODM).

5 Related Party disclosures

1 KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam, Chairman Sri B Saravanan, Managing Director

2 RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Relatives

Sri B Saravanan (Son)

Sri B Saravanan Relatives

Sri S V Balasubramaniam (Father)

3 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

1. Annamallai Enterprise Private Limited

2. Annamallai Estates Private Limited

3. Bannari Amman Exports Private Limited

4. Bannari Amman Finance Private Limited

5. Shiva Cargo Movers Private Limited

6. Shiva Distilleries Private Limited

7. SVB Holdings Private Limited

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

7 Foreign currency exposures that are not hedged by a derivative instrument or otherwise are as under :-

8. The dividend is paid to Non Resident shareholders in Indian Rupee by crediting to their Rupee Bank account.

a) Fair Value Hierarchy

Fair Value Measurement Hierarchy of Financial Instruments :

The Company uses the following fair value hierrachy for determining and disclosing the fair value of the finanicial instruments

Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilties

Level 2 : inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 : inputs that are unobservable for the asset or liability.

Fair Value Measured at amortised Cost:

The carrying amount of financial assets and liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the company does not anticipate that the carrying amount would be singicantly different from the values that would eventually be received or settled.

9. Financial Risk Management - Objectives & Policies

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 operations. The Company’s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that derive directly from its operations.

The Company is exposed to credit risk, liquidity risk and market risk. The Company’s senior management under the supervision of Risk management committee / Board of Directors oversees the management of these risks and the appropriate financial risk governance framework for the Company. 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.

a) Market risk

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

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings obligations with floating interest rates. Interest rate risk is managed maintaining a combination of fixed and floating rate debt and cash management policies. There is no material interest risk to the company’s financial liabilities.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s foreign currency denominated financial assets and financial liabilities.

iii) Commodity price risk

The realisation gets adversly affected during downturn since sugar industry is cyclic in nature. 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.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument leading to a financial loss. Credit risk arising from trade receivables is managed in accordance with the Company’s established policy, procedures and control relating to customer credit risk management. The Company had managed the credit risk with respect to trade receivables by selling majority of sugar sales covering minimal portion on credit basis.

The Company’s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the counterparties. The company manages the risk by credit aprroval. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified.

The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each balance sheet date.

Financial assets are written off when there is no reasonable expectation of recovery. However, the Company continues to attempt to recover the receivables and are recognised in the Statement of Profit and Loss when recovered.

c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result for an inability to sell a financial asset quickly close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

10. Capital Management

Capital includes paid up equity capital and all other equity reserves attributable to the equity shareholders of the Company for the purpose of Capital Management of the Company. The objective of Capital Management is to safeguard its ability to continue as a going concern so that it can continue to provide returns to shareholders and other stake holders.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of the financial covenants. The capital structure of the Company consist of net debt and total equity of the Company.

In order to achieve this overall objectives, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2018

11. Reconciliation of effective tax rate

The tax expense for the year can be reconciled to the accounting profit as follows :

The tax rate used above for the reconciliation of income tax expenses for years 2016-17 and 2017-18 is the corporate tax rate of 34.608% (30% surcharge @ 12% and education cess @ 3%) payable on taxable profits under the Income Tax Act, 1961

12. Events occuring after Balance Sheet date

The Board of Directors at its meeting held on 25.05.2018 have recommended a payment of final dividend of Rs.10 Per equity share for the year ended 31st March, 2018 amounting to Rs.1509.25 lakhs including dividend distribution tax of Rs. 255.28 lakhs.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

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Mar 31, 2017

NOTE 1. EQUITY

a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

b. Details of shareholders holding more than 5% shares in the company

c. Terms/rights attached to equity shares

The company has issued only one class of equity shares having face value of Rs. 10/- each. One equity share carries one vote. The members are entitled to vote in accordance with their shareholding. The Company declares and pays dividend in Indian rupees. The dividend recommended by the board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

2.1 Rupee term loan of Rs. 6750 Lakhs (31.03.2016 -Rs.8550 Lakhs and 01.04.2015 - Rs.9000 Lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III.

The loan carries Interest at the rate of Bank’s Base rate plus 1% and repayable in 20 equal quarterly instalments starting from January 2016.

The loan amount repayable within twelve months is Rs 1800 lakhs (31.03.2016 - Rs.1800 Lakhs and 01.04.2015 - Rs.450 Lakhs) is grouped under Other Current Liabilities

2.2 Rupee term loan of Rs. 4950 Lakhs (31.03.2016 -Rs.6750 Lakhs and 01.04.2015 - Rs.8550 Lakhs) from State Bank of India is secured by pari passu first charge on the movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III.

The loan carries Interest at the rate of Bank’s Base rate plus 1% and repayable in 20 equal quarterly instalments starting from March 2015.

The loan amount repayable within twelve months is Rs 1800 lakhs (31.03.2016 - Rs.1800 Lakhs and 01.04.2015 - Rs.1800 Lakhs ) is grouped under Other Current Liabilities.

2.3 Rupee term loan of Rs. 1500 Lakhs (31.03.2016 -Rs.1900 Lakhs and 01.04.2015 - Rs.2000 Lakhs) from The Federal Bank Ltd is secured by pari passu first charge on the movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III.

The loan carries Interest at the rate of Bank’s Base rate plus 0.60% and repayable in 20 equal quarterly instalments starting from January 2016.

The loan amount repayable within twelve months is Rs 400 lakhs (31.03.2016 - Rs.400 Lakhs and 01.04.2015 - Rs.100 Lakhs) is grouped under Other Current Liabilities

2.4 Corporate loan of Rs. 7500 Lakhs (31.03.2016 -Rs.7500 Lakhs and 01.04.2015 - Rs. NIL) from State Bank of India is secured by pari passu first charge on the fixed assets (excluding vehicles) of the Sugar Complex at Sugar Unit II.

The loan carries Interest at the rate of Bank’s Base rate plus 1% and repayable in 16 equal quarterly instalments starting from December 2017.

The loan amount repayable within twelve months is Rs 937.50 Lakhs (31.03.201 6 -Rs. NIL and 01.04.2015 - Rs. NIL) is grouped under Other Current Liabilities.

2.5 Term loan of Rs. 4687.50 Lakhs (31.03.2016 -Rs.5000 Lakhs and 01.04.2015 - Rs. NIL ) from HDFC Bank Ltd is secured by pari passu first charge on the fixed assets (excluding vehicles) of the Sugar Complex at Sugar Unit II.

The loan carries Interest at the rate of Bank’s Base rate plus 1% and repayable in 16 equal quarterly instalments with moratorium of 12 months from the date of first availment.

The loan amount repayable within twelve months is Rs.1250 Lakhs (31.03.2016 - Rs. NIL and 01.04.2015 - Rs. NIL) is grouped under Other Current Liabilities.

2.6 Term loan of Rs. 10000 Lakhs (31.03.2016 -Rs.10000 Lakhs and 01.04.2015 - Rs. NIL) from ICICI Bank Ltd is secured by pari passu first charge on the fixed assets (excluding vehicles) of the Sugar Complex at Sugar Unit II.

The loan carries Interest at the rate of Bank’s Base rate plus 0.75% and repayable in 16 equal quarterly instalments with moratorium of 24 months from the date of first availment.

The loan amount repayable within twelve months is Rs.937.50 Lakhs (31.03.201 6 -Rs. NIL and 01.04.2015 - Rs. NIL) is grouped under Other Current Liabilities.

2.7 Loan from Sugar Development Fund (Government of India) availed for setting up of cogeneration plant in Sugar Unit-IV, amounting to Rs. 1442.09 Lakhs (31.03.2016 - Rs.1922.79 Lakhs and 01.04.2015 - Rs. 2403.48 Lakhs) is secured by way of first charge on the movable and immovable properties of Sugar Unit-IV and first pari passu charge on the movable and immovable properities of cogeneration plant in Sugar Unit IV.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal commenced after the expiry of three years and in ten equal half yearly installments. The interest on the loan shall be paid half-yearly from the date of disbursement. The loan was disbursed during the financial year 2013.

The loan amount repayable within twelve months is Rs 480.70 lakhs (31.03.2016 - Rs.480.70 Lakhs and 01.04.2015 - Rs.480.70 Lakhs) is grouped under Other Current Liabilities.

2.8 Loan from Sugar Development Fund (Govt. of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit-II, amounting to Rs. 371.25 Lakhs (31.03.2016 - Rs.472.50 Lakhs and 01.04.2015 - Rs. 540 Lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit-II.

Repayment of principal commenced after the expiry of three years and in four equal annual installments. The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. The loan was disbursed in two intalments of Rs. 270 lakhs each.The interest on the first instalment of Rs.270 lakhs disbursed during the financial year 2013 is payable annually and the interest on the second instalment of Rs.270 lakhs disbursed during the financial year 2014 is payable half yearly from the date of disbursement.

The loan amount repayable within twelve months is Rs 135 lakhs (31.03.2016 - Rs.101.25 Lakhs and 01.04.2015 - Rs.67.50 Lakhs) is grouped under Other Current Liabilities.

2.9 Loan from Sugar Development Fund (Govt. of India) availed for modernisation cum expansion of Sugar Unit-III, amounting to Rs. 480.06 Lakhs (31.03.2016 - Rs. NIL and 01.04.2015 - Rs. NIL) is secured by way of pari passu first charge basis on the immovable and movable properties of Sugar Unit-III.

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and payment of interest thereon commenced after the expiry of one year of the repayment the bank term loan and interest thereon or on the expiry of a period of 5 years reckoned from the date of disbursement whichever is earlier.

2.10 Loan of Rs.5006.67 Lakhs (31.03.2016 -Rs.7556.67 Lakhs and 01.04.2015 - Rs.7840 Lakhs) under SEFASU notified by Government of India availed from Punjab National Bank, The HDFC Bank Ltd and Indian Overseas Bank is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I, II, III and IV

The loan availed from Punjab National Bank and HDFC Bank Ltd carries interest at the rate of 12% per annum and loan availed from Indian Overseas Bank carries interest at the rate of Bank’s base rate plus 0.50%. The loan is eligible interest subvention upto 12% and is repayable in 36 equal monthly installments after the expiry of 2 years from the date of disbursement.

The loan amount repayable within twelve months is Rs 2620 lakhs (31.03.2016 - Rs.2620 Lakhs and 01.04.2015 - Rs.218.33 Lakhs) is grouped under Other Current Liabilities.

2.11 Loan of Rs.783.66 Lakhs (31.03.2016 -Rs.1127.99 Lakhs and 01.04.2015 - Rs. NIL) under SEFASU notified by Government of India availed from Central Bank of India and The Karur Vysya Bank Ltd is secured by residual first charge on all fixed assets Sugar Units V.

The loan availed from Central Bank of India carries interest at the rate of 12% per annum and loan availed from The Karur Vysya Bank Ltd carries interest at the rate of Bank’s base rate plus 0.50%. The loan is eligible interest subvention upto 12% and is repayable in 36 equal monthly installments after the expiry of 2 years from the date of disbursement.

The loan amount repayable within twelve months is Rs.376 Lakhs (31.03.2016 - Rs.344.33 Lakhs and 01.04.2015 - Rs. NIL) is grouped under Other Current Liabilities.

2.12 Loan of Rs.3282.50 Lakhs (31.03.2016 - Rs.4250 Lakhs and 01.04.2015 - Rs.NIL) under SOFT LOAN notified by Government of India availed from The DFC Bank Ltd and Union Bank of India is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I, II, III and IV.

The loan availed from HDFC Bank Ltd carries interest at the rate of 10% per annum for the first twelve months and at HDFC bank rate for the second and third year of loan or subject to change as per Goverment/Reserve Bank of India. The loan availed from Union Bank of India carries interest at the rate of Bank’s base. The loan availed from HDFC Bank Ltd is repayable in 8 equal quarterly instalments after expiry of one year from the date of first disbursement. The loan availed from Union Bank of India is repayable in 16 equal quarterly instalements after expiry of one year. The loan is eligible interest subvention.

The loan amount repayable within twelve months is Rs 1745 lakhs (31.03.2016 - Rs.1308.75 Lakhs and 01.04.2015 - Rs.NIL) is grouped under Other Current Liabilities.

2.13 The interest free loan availed by Madras Sugars Limited from a related party is repayable as specified in the scheme of Amalgamation and the same will continue to be interest free loan until repayment.

2.14 The purchase tax of Rs. 164.32 lakhs payable to Government of Karnataka for purchase of Sugarcane to sugar Unit III during the Year eneded 31.03.2015 has been converted into interest free loan. The loan is secured by issue of Bank Guarentee from ICICI Bank Limited. The loan is payable in five annual instalments from the sixth year of Conversion into Loan.

3.1 Cash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank, Bank of Baroda, Canara Bank, The Federal Bank Ltd, The Karur Vysya Bank Ltd, Union Bank of India, Indian Overseas Bank, State Bank of Travancore, State Bank of India, State Bank of Hyderabad, Bank of India, Axis bank Ltd, ICICI Bank Ltd and The HDFC Bank Ltd to the company’s Sugar Units I, II, III and IV are secured by way of hypothecation of current assets and other movable block assets of the sugar units and third mortgage on the immovable properties of the Sugar units I, II, III and IV.

The credit limit availed as at 31.3.2017 is Rs. 18522.33 Lakhs (31.03.2016 - Rs.43961.29 Lakhs and 01.04.2015 - Rs.56945.04 Lakhs)

The availed limits are repayable on demand and carries interest rates between Bank’s base rate plus 0.25% and 1% per annum.

3.2 The Unsecured Short term loan of Rs.10000 lakhs from HDFC Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 7.90% per annum.

The Unsecured short term factoring facility for domestic receivable / sales invoice discount facility of Rs. 711.66 lakhs from Axis Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 8.15% per annum.

The Unsecured short term vender financing / purchase invoice discounting facility of Rs. 1316.89 lakhs from Axis Bank Ltd is repayable within one hundred and twenty days from the date of availment and carries interest at the rate of 8.25% per annum.

The Unsecured short term farmer finance loan of Rs. 5418.41 lakhs from HDFC Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at 8% per annum.

The Unsecured Shot term FCNRB loan of Rs. 5000 lakhs from HDFC Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at LIBOR plus 200 basis points

The other unsecured loan of Rs.5000 lakhs availed by M/s Madras Sugars Limited from the related parties will be repaid as specified in the scheme of amalgamation

NOTE 4. TRADE PAYABLES

The vendors of the Company are yet to submit their status under Micro, Small and Medium Enterprises; hence the relevant information is not available with the company. Accordingly no disclosures relating to Micro, Small and Medium Enterprises have been made in the accounts.

5. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Contingent liabilities

5.1 The company has preferred a Writ Appeal before the Division Bench of the Hon’ble High Court, Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs.408.14 Lakhs (31.03.201 6 -Rs.397.94 Lakhs and 01.04.2015 -Rs.387.76 Lakhs)

5.2. Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season. Chief Director (Sugar), Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar. The approximate unprovided quantum under dispute is Rs. 683.35 Lakhs (31.03.2016 -Rs.683.35 Lakhs and 01.04.2015 -Rs.683.35 Lakhs).

5.3. Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for a period of 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar. In respect of incentive sugar sold by Unit-I from 20.09.1991 to 31.01.1994, the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs.33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company. The Company has filed Writ Petitions in Madras High Court and the Hon’ble High Court disposed the case with direction to submit all explanations before the adjudicating authority. Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs.1 49.99 Lakhs (31.03.2016 - Rs.149.99 Lakhs and 01.04.2015 - Rs.149.99 Lakhs).

5.4. The Entry Tax of Rs. 188.29 lakhs on Inter-state purchase of rough blocks is disputed (31.03.2016 - Rs.188.29 Lakhs and 01.04.2015 - Rs.188.29 Lakhs).

5.5. The Company has received a demand for payment of excise duty for Rs.148.44 (31.03.2016 - Rs.148.44 Lakhs and 01.04.2015 - Rs.148.44 Lakhs). lakhs on the machineries purchased for cogeneration plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon’ble High Court of Madras.

5.6. The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction for the Assessment year 2013-14. The quantum under dispute is Rs.1.60 Lakhs.

5.7. As at the year end, the Company has an obligation under EPCG Scheme to export sugar of a value of USD 93,28,827. (31.03.2016 - USD 93,28,827 and 01.04.2015 - USD 1,03,17,105).

5.8. Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs.461.72 Lakhs (31.03.2016 -Rs.174.38 Lakhs and 01.04.2015 -Rs.155.10 Lakhs).

The above remuneration does not include gratuity and leave encashment benefit, since the same is computed actuarially for all the employees and the amount attributable to the managerial person cannot be ascertained separately.

6. Segment Information for the year ended 31st March 2017

Information reported to the chief operating decision maker (C.O.D.M.) for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided, and in respect of the following segment tabulated below . Business segments are primarily Sugar, Power, Distillery and Granite products. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts. Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Geographical revenues are allocated based on the location of the customer.

7 Related Party disclosures as required under Indian Accounting Standard on “Related Party Disclosures” issued by the Institute of Chartered Accountants of India are given below

1 KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam, Chairman Sri B Saravanan, Managing Director

2 RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Relatives

Sri B Saravanan (Son)

Sri B Saravanan Relatives

Sri S V Balasubramaniam (Father)

3 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

1 Annamallai Enterprise Private Limited

2 Bannari Amman Exports Private Limited

3 Shiva Cargo Movers Private Limited

4 Shiva Distilleries Private Limited

5 SVB Holdings Private Private Limited

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

9 Foreign currency exposures that are hedged by a derivative instrument or natural hedging are as under :-

10. The dividend is paid to Non Resident shareholders in Indian Rupee by crediting to their Rupee Bank account

11. During the year the company had Specified Bank Notes (SBN) or other denomination notes as defined in the MCA notification G.S.R 308 (E) dated 30.3.2017 on the details of SBN held and transacted during the period from 8.11.2016 to 30.12.2016 are as under :

12. Financial Instruments : Capital Management

The Company manages its capital to ensure that the company will be able to continue as going concern by maximizing the return to stakeholders through the optimization of the debt and equity balance. The Capital structure of the company consist of net debt (as mentioned in Note 13,16 & 18 off set by cash and bank balances) and total equity of the company. The company is not subject to any externally imposed capital requirements.

Financial risk management objectives and policies :

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is set by the Managing Board.

The Company’s corporate treasury function provides services to the business co-ordinates access to financial markets and manages financial risks relating to the operation of the company through internal risk reports which analyze exposures by degree and magnitude of risk. These risks include market risk (including currency risk, interest risk), credit and liquidity risk. The use of financial derivatives is governed by the Company’s policies approved by Board of Directors. The company does not enter into or trade financial instruments, including derivatives instruments for speculative purposes.

The Market Risk - Currency risk is mitigated through forward contracts and natural hedging.

Market risk - Interest Rate risk is managed maintaining a combination of fixed and floating rate debt and cash management policies. There is no material interest risk to the company’s financial liabilities.

Credit Risk Management - refers to the risk that the customer’s ability to meet the contractual obligation. The company manages the risk by credit approval, monitoring process and adequate insurance coverage.

Liquidity Risk Management - refers to the fluctuation in cash flows; the same is managed by preparing and monitoring the forecast of cash flows, cash management policies by matching the maturity profiles of financial assets and liabilities.

All current financial liabilities are repayable within 1 year. The company covering its currency exposure under forward cover/ natural hedging, and hence sensitive analysis is not required.

The tax rate used for the years 2015-16 and 2016-17 reconciliation above is the corporate tax rate of 34.608% (30% surcharge @ 12% and education cess @ 3%) payable on taxable profits under the Income Tax Act, 1961.

13. Events occurring after Balance Sheet date.

The Board of Directors has recommended equity dividend of Rs. 12.50 per share (Previous year Rs.7.50 per share) for the financial year 2016-17.

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Mar 31, 2016

1 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Contingent liabilities

2 The company has preferred a Writ Appeal before the Division Bench of the Hon''ble High Court, Madras challenging the Order pronounced in Writ Petition No 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G O No 474 dated 13.11.2001 for the water drawn for industrial purposes The approximate amount under dispute is Rs 397.94 Lakhs (Rs 387.76 Lakhs)

3 Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season Chief Director (Sugar) Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained By virtue of injunction order the entire production was sold as Free Sugar The approximate unprovoked quantum under dispute is Rs 683.35 Lakhs

4 Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for a period of 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar In respect of incentive sugar sold by Unit-I from 20.09.1991 to 31.01.1994 the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company The Company has filed Writ Petitions in Madras High Court and the Hon''ble High Court disposed the case with direction to submit all explanations before the adjudicating authority Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs 149.99 lakhs

5 The Entry Tax of Rs 188.29 lakhs on Inter-state purchase of rough blocks is disputed

6 The Company has received a demand for payment of excise duty for Rs148.44 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance The Company has remitted the amount under protest The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon''ble High Court of Madras

7 The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction for the Assessment year 2012-13 The quantum under dispute is Rs 1579.62 Lakhs

8 As at the year end The Company has an obligation under EPCG Scheme to export sugar of a value of USD 93,28,827

9 Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs 174.38 Lakhs (Rs 155.10 lakhs)

10 Segment Information for the year ended 31^st March 2016

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily Sugar Power Distillery and Granite products Revenues and expenses directly attributable to segments are reported under each reportable segment Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts Income or Expenses which are not attributable or allocable to segments have been disclosed as unallowable Income / Expenses Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment Geographical revenues are allocated based on the location of the customer

11 RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam

Relatives

Sri B Saravanan (Son)

Sri B Saravanan Relatives

Sri S V Balasubramaniam (Father)

12 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

Annamallai Enterprise Private Limited

Bannari Amman Exports Private Limited

Shiva Cargo Movers Private Limited

Shiva Distilleries Private Limited

SVB Holdings Private Private Limited

13. Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets - During the year the company had reviewed the carrying value of assets for finding out impairment if any The review has revealed that there is no impairment as per Accounting Standard 28

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

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Mar 31, 2015

1. Terms / rights attached to equity shares

The company has issued only one class of equity shares having face value of Rs10/- each One equity share carries one vote The members are entitled to vote in accordance with their shareholding The Company declares and pays dividend in Indian rupees The dividend recommended by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting

2. Rupee term loan of Rs 9000 lakhs (Rs 6800 lakhs) from HDFC Bank Ltd is secured by pari passu first charge on the land & building and movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III

The loan carries interest at the rate of Bank's Base rate plus 1% and repayable in 20 equal quarterly instalments starting from January 2016

The loan amount repayable within twelve months is Rs 450 lakhs (Nil) grouped under Other Current Liabilities

3. Rupee term loan of Rs 8550 Lakhs (Rs 7100 Lakhs) from State Bank of India is secured by pari passu first charge on the land & building and movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III

The loan carries Interest at the rate of Bank's Base rate plus 1% and repayable in 20 equal quarterly instalment starting from March 2015

The loan amount repayable within twelve months is Rs 1800 lakhs (Rs 400 Lakhs) grouped under Other Current Liabilities

4. Rupee term loan of Rs 2000 Lakhs (Rs 2000 Lakhs) from The Federal Bank Ltd is secured by pari passu first charge on the land & building and movable plant and machinery of the Sugar and Co-generation Plant at Sugar Unit III

The loan carries Interest at the rate of Bank's Base rate plus 0.60% and repayable in 20 equal quarterly instalments starting from January 2016

The loan amount repayable within twelve months is Rs 100 lakhs (Nil) grouped under Other Current Liabilities

5. Loan from Sugar Development Fund (Government of India) availed for setting up of co-generation plant in Sugar Unit-IV amounting to Rs 2403.48 Lakhs (Rs 2403.48 lakhs) is secured by way of first charge on the movable and immovable properties of Sugar Unit IV and first pari passu charge on the movable and immovable properties of co-generation plant in Sugar Unit IV

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in ten equal half yearly installments The interest on the loan shall be paid half-yearly from the date of disbursement The loan was disbursed during the financial year 2013

The loan amount repayable within twelve months is Rs 480. 70 lakhs (Nil) grouped under Other Current Liabilities

6. Loan from Sugar Development Fund (Government of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit-II amounting to Rs 540 Lakhs (Rs 540 lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit-II

Repayment of principal commenced after the expiry of three years and in four equal annual installments The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement The loan was disbursed in two instalments of Rs 270 lakhs each The interest on the first instalment of Rs 270 lakhs disbursed during the financial year 2013 is payable annually and the interest on the second instalment of Rs 270 lakhs disbursed during the financial year 2014 is payable half yearly from the date of disbursement

The loan amount repayable within twelve months is Rs 67. 50 lakhs (Nil) grouped under Other Current Liabilities

7. Loan of Rs 7840 Lakhs (Rs 5811.58 Lakhs) under SEFASU notified by Government of India availed from Punjab National Bank HDFC Bank Ltd and Indian Overseas Bank is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I, II, III and IV

The loan availed from Punjab National Bank and HDFC Bank Ltd carries interest at the rate of 12% per annum and loan availed from Indian Overseas Bank carries interest at the rate of Bank's base rate plus 0.50% The loan is eligible interest subvention upto 12% and is repayable in 36 equal monthly instalments after the expiry of 2 years from the date of disbursement

The loan amount repayable within twelve months is Rs 218. 33 lakhs (Nil) grouped under Other Current Liabilities

8. Cash Credit and other Working Capital Limits /Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank Bank of Baroda Canara Bank The Federal Bank Ltd The Karur Vysya Bank Ltd Union Bank of India Indian Overseas Bank State Bank of Travancore State Bank of India State Bank of Hyderabad Bank of India Axis bank Ltd ICICI Bank Ltd and HDFC Bank Ltd to the company's Sugar Units are secured by way of hypothecation of current assets and other movable block assets of the sugar units and third mortgage on the immovable properties of the Sugar units

The credit limit availed as at 31.3.2015 is Rs 56945.04 Lakhs (Rs 48967.42 Lakhs)

The availed limits are repayable on demand and carries interest rates between Bank 's base rate plus 0.25% and 1% per annum

9. Packing Credit Limit and other working capital limits sanctioned by Punjab National Bank and State Bank of India to Granite Division are secured by way of hypothecation of current assets and second mortgage on other movable and immovable properties of Granite Division

The credit limit availed as at 31.3.2015 is Rs 500 Lakhs (Rs 500 Lakhs)

The credit limits availed are repayable on demand and carries interest at the rate of banks base rate plus 0.25% per annum

10. Cash Credit Limits sanctioned by Canara Bank and The Lakshmi Vilas Bank Ltd to Distillery Unit at Tamilnadu are secured by way of Hypothecation of current assets and second charge on other movable and immovable properties of the Distillery Unit in Tamilnadu

The credit limit availed as at 31.3.2015 is Rs 247.60 Lakhs (Rs 148.28 Lakhs)

The cash credit limits are repayable on demand and carries interest ranges between Bank's base rate plus 0.30% and 1.25% per annum

The Unsecured Short Term loan of Rs 5000 lakhs from HDFC Bank Ltd is repayable within one hundred and eighty days from the date of availment and carries interest at the rate of 10% per annum

The Unsecured Short Term loan of Rs 10000 lakhs from HDFC Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 10% per annum

The Unsecured Short Term Export Credit facility of Rs 2000 lakhs from HDFC Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 10% per annum

The Unsecured Short Term Vendor Financing/Purchase Invoice Discounting facility of Rs 2500 lakhs from Axis Bank Ltd is repayable within one hundred and twenty days from the date of availment and carries interest at the rate of 10.25% per annum

11. The Unsecured Short Term Factoring Facility for domestic receivables of Rs 2500 lakhs from Axis Bank Ltd is repayable within ninety days from the date of availment and carries interest at the rate of 10.50% per annum

The Unsecured Short Term Loan of Rs 4649.97 lakhs from Canara Bank is repayable in four monthly equal instalments commencing from fifth month from the date of availment and carries interest at the rate of 10.25% per annum

12. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Contingent liabilities

1 The company has preferred a Writ Appeal before the Division Bench of the Hon'ble High Court Madras challenging the Order dated 28.02.2006 in Writ Petition No 4030/2002 in connection with increase in rate of water charges and the method of computation of water charges The approximate amount under dispute is Rs 387.76 Lakhs (Rs 377.55 Lakhs)

2 Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season Chief Director (Sugar) Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim Injunction has been obtained By virtue of injunction order the entire production was sold as Free Sugar The approximate unprovided quantum under dispute is Rs 683.35 Lakhs

3 Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for a period of 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar In respect of incentive sugar sold by Unit-I from 20.09.1991to 31.01.1994 the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company The Company has filed Writ Petitions in Madras High Court and the Hon'ble High Court disposed the case with direction to submit all explanations before the adjudicating authority Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs149.99 lakhs

4 The Entry Tax of Rs 188.29 lakhs on Inter-state purchase of rough blocks is disputed

5 The Company has received a demand for payment of excise duty for Rs148.44 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance The Company has remitted the amount under protest The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon'ble High Court of Madras

6 The Company has been asked to pay Electricity Tax of 10 Paise per unit with effect from 16th June 2003 for the electricity consumed from own captive power generators at its sugar factories in Tamilnadu under Tamilnadu Tax on Consumption or Sale of Electricity Act 2003 which has been disputed by filing a Writ petition before the Hon'ble High Court of Madras The approximate quantum under dispute is Rs 1546.23 Lakhs (Rs1412.06)

7 The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction for the Assessment year 2012 -13 The quantum under dispute is Rs1579.62 Lakhs

8 As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 10317105

9 Estimated amount of contracts remaining to be executed on capital account-Tangible Assets not provided for is Rs155.10 Lakhs (Rs 3195.75 lakhs)

13. Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below

1. KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Chairman Sri B Saravanan Managing Director

2. RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Relatives

Sri B Saravanan (Son)

Sri B Saravanan Relatives

Sri S V Balasubramaniam (Father)

3. ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

Annamallai Enterprise Limited

Annamallai Retreading Company (P) Limited

Bannari Amman Exports Limited

Madras Sugars Limited

Sakthi Murugan Transports Limited

Shiva Cargo Movers Limited

Shiva Distilleries Limited

14. Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets During the year the company had reviewed the carrying value of assets for finding out impairment if any The review has revealed that there is no impairment as per Accounting Standard 28

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

16. The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Alathukombai Village Sathyamangalam Taluk Erode District Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered has not been provided in the books considering the uncertainty in the realisation of the same

17. As at 31st March 2015 the company has Derivative Contracts in the nature of Forward Contract for USD 3298880 towards hedging the export receivables and there are no Derivative Contracts for speculation

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Mar 31, 2014

1 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) Contingent liabilities

1.1 The company has preferred a Writ Appeal before the Division Bench of the Hon''ble High Court Madras challenging the Order pronounced in Writ Petition No 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G O No 474 dated 13.11.2001 for the water drawn for industrial purposes The approximate amount under dispute is Rs 377.55 lakhs (Rs 368.98 lakhs)

1.2 Sugar Unit I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 sugar season Chief Director (Sugar) Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained By virtue of injunction order the entire production was sold as Free Sugar The approximate unprovided quantum under dispute is Rs 683.35 lakhs (Rs 683.35 lakhs)

1.3 Sugar Unit I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for a period of 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar In respect of incentive sugar sold by Unit I from 20.09.1991 to 31.01.1994 the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs 149.99 lakhs (Rs 149.99 lakhs)

1.4 The entry tax of Rs 188.29 lakhs (Rs 188.29 lakhs) on inter-state purchase of rough blocks is disputed

1.5 The Company has received a demand for payment of excise duty for Rs 148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance The Company has remitted the amount under protest The company opted for obtaining a valid certificate for which steps have been taken through a writ petition filed in Hon''ble High Court of Madras

1.6 The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction for the Assessment years 2007 - 08 and 2011 - 12 The quantum under dispute is Rs 345.73 lakhs

1.7 As at the year end The Company has an obligation under EPCG Scheme to export sugar of a value of USD 10317105

1.8 Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs 3195.75 lakhs (Rs 13789.42 lakhs)

2 Segment Information for the year ended 31st March 2014

The Company has identified business segments as its primary segment and geographic segments as its secondary segment Business segments are primarily Sugar Power Distillery and Granite Products Revenues and expenses directly attributable to segments are reported under each reportable segment Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment Geographical revenues are allocated based on the location of the customer

3 Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below

1 KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Chairman Sri B Saravanan Managing Director

2 RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam Relatives

Sri B Saravanan (Son)

Sri B Saravanan Relatives

Sri S V Balasubramaniam (Father)

3 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

Annamallai Enterprise Limited

Bannari Amman Exports Limited

Madras Sugars Limited

Shiva Cargo Movers Limited

Shiva Distilleries Limited

4 Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets During the year the company had reviewed the carrying value of assets for finding out impairment if any The review has revealed that there is no impairment as per Accounting Standard 28

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

6 The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Alathukombai Village Sathyamangalam Taluk Erode District Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered has not been provided in the books considering the uncertainty in the realisation of the same

7 There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date

8 The dividend is paid to Non Resident shareholders in Indian Rupee by crediting to their Rupee Bank account

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Mar 31, 2013

1.1 Rupee term loan of Rs. 2800 Lakhs (Rs.4200 Lakhs) from Axis Bank Ltd is secured by pari passu charge on the movable plant and machinery and pari passu second charge on the current assets of the Co-generation Plant at Sugar Unit IV The loan is further secured by mortgage on lands admeasuring 50.93 acres and buildings thereon pertaining to the Co-generation Plant at Sugar Unit-IV

The loan carries interest at the rate of Bank''s Base rate plus 2.25% and repayable in 20 equal quarterly instalments of Rs.350 Lakhs each starting from June 2010

Out of the above loan amount repayable within twelve months is Rs. 1400 lakhs (Rs.1400 Lakhs) is grouped under other current liabilities

1.2 The two years Corporate Loan of Rs.1875 lakhs (Rs.5625 lakhs) from Canara Bank is against assignment of receivables from Electricity Board (free from encumbrance) The loan carries interest at the rate of Bank''s Base rate plus 1% and repayable in 24 equal monthly instalments of Rs.312.50 Lakhs each starting from October 2011 Out of the above loan amount repayable within twelve months is Rs. 1875 lakhs (Rs.3750 lakhs) which is grouped under other current liabilities

1.3 Loan from Sugar Development Fund (Government of India) availed for modernisation/expansion of Sugar Unit I amounting to Rs. 465.23 Lakhs (Rs. 775.39 Lakhs) is secured by way of xclusive second charge on the movable and immovable properties of Sugar Unit I

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal and interest thereon commenced after a period of 8 years from the date of disbursement and in five equal annual instalments The loan was disbursed during the financial year 2002 Out of the above loan amount repayable within twelve months is Rs. 310.16 lakhs (Rs. 310.16 lakhs) which is grouped under other current Liabilities

1.4 Loan from Sugar Development Fund (Government of India) availed for co-generation plant in Sugar Unit IV amounting to Rs. 2403.48 Lakhs (Nil) is secured by way of first charge on the movable and immovable properties of Sugar Unit IV and first pari passu charge on the movable and immovable properties of co-generation plant in Sugar Unit IV

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in ten equal half yearly instalments The interest on the Loan shall be paid half yearly from the date of disbursement The Loan was disbursed during the financial year 2013

1.5 Loan from Sugar Development Fund (Government of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit-II amounting to Rs.270 Lakhs (Nil) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit II

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in four equal annual instalmmmmm The interest on the Loan shall be paid annually from the date of disbursement The loan was disbursed during the financial year 2013

1.6 Loan from Sugar Development Fund (Government of India) availed for implementation of the schemes aimed at development of sugar cane in the factory area of Sugar Unit III amounting to Rs.266.40 Lakhs (Nil) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit III

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement Repayment of principal commenced after the expiry of three years and in four equal annual instalments The interest on the Loan shall be paid annually from the date of disbursement The loan was disbursed during the financial year 2013

1.7 Term Loan of Rs.38.83 Lakhs (Rs.136.84 Lakhs) under SEFASU notified by Government of India availed from Punjab

National Bank consortium consists of Punjab National Bank Bank of Baroda Canara Bank The Karur Vysya Bank Ltd Union Bank of India Indian Overseas Bank State Bank of Travancore State Bank of India State Bank of Hyderabad & Bank of India is secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units I II and III

The loan carries interest subvention at the rate of 12% per annum and is repayable in 24 equal instalments after the expiry of 2 years from the date of disbursement

The loan amount repayable within twelve months is Rs. 38.83 Lakhs (Rs.136.84 Lakhs) is grouped under Other Current Liabilities

2.1 Cash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank Bank of Baroda Canara Bank The Federal Bank Limited The Karur Vysya Bank Limited Union Bank of India Indian Overseas Bank State Bank of Travancore State Bank of India State Bank of Hyderabad Bank of India Axis Bank Limited ICICI Bank Limited and HDFC Bank Limited to the Company''s Sugar Units are secured by way of hypothecation of current assets and other movable block assets of the Sugar Units and third mortgage on the immovable properties of the Sugar Units

The credit limits availed as at 31.3.2013 is Rs. 29642.38 Lakhs (Rs. 19810.30 Lakhs)

The availed limits are repayable on demand and carries interest ranges between Bank''s base rate plus 0.25% and 1.75% per annum

2.2 Packing Credit Limit and other working capital limits sanctioned by Punjab National Bank and State Bank of India to Granite Division are secured by way of hypothecation of current assets and second mortgage on other movable and immovable properties of Granite Division

The credit limits availed as at 31.3.2013 is Nil (Nil)

The credit limits availed are repayable on demand and carries interest ranges between Bank''s Base Rate plus 0.75% and 1.50% per annum

2.3 Cash Credit Limits sanctioned by Canara Bank and The Lakshmi Vilas Bank Ltd to Distillery Unit in Tamilnadu are secured by way of Hypothecation of current assets and second charge on other movable and immovable properties of the Distillery Unit in Tamilnadu

The credit limits availed as at 31.3.2013 is Rs. 119.70 Lakhs (Rs. 148.39 Lakhs)

The cash credit limits are repayable on demand and carries interest ranges between Bank''s base rate plus 0.50% and 2.75% per annum

2.4 The Unsecured Short term loan of Rs. 2000 lakhs (Nil) of availment and carries interest at the rate of 10.45% per annum The Unsecured Short term loan of Rs. 5000 lakhs (Rs. 5000 Lakhs) from HDFC Bank Ltd is repayable within six months from the date of availment and carries interest at the rate of 10.60% per annum

3 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) Contingent liabilities

3.1 The company has preferred a Writ Appeal before the Division Bench of the Hon''ble High Court Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes The approximate amount under dispute is Rs. 368.98 Lakhs (Rs. 360.66 Lakhs)

3.2 Sugar Unit I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season Chief Director (Sugar) Directorate of Sugar Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained By virtue of injunction order the entire production was sold as Free Sugar The approximate unprovided quantum under dispute is Rs. 683.35 Lakhs (Rs.683.35 lakhs)

3.3 Sugar Unit I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar In respect of incentive sugar sold by Unit I from 20.09.1991 to 31.01.1994, the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs.33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs.149.99 lakhs (Rs.149.99 lakhs) 29.4 The Entry Tax of Rs. 289.56 lakhs (Rs. 287.54 Lakhs) on Inter-state purchase of rough blocks is disputed

3.4 The Company has received a demand for payment of excise duty for Rs.148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance The Company has remitted the amount under protest The company opted for obtaining a valid certificate for which steps have been ta

3.5 The company has preferred an appeal before the Commissioner of Income Tax (Appeals); challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction under section 80IA of the Income Tax Act 1961 for the Assessment year 2010-11 The quantum under dispute is Rs.1684.27 Lakhs

3.6 As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 10317105 and to export granite of a value of USD 3184080

3.7 Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs. 13789.42 Lakhs (Rs. 967.87 Lakhs)

4 Segment Information for the year ended 31st March 2013

The Company has identified business segments as its primary segment and geographic segments as its secondary segment

Business segments are primarily Sugar Power Distillery and others Revenues and Expenses directly attributable to segments

are reported under each reportable segment Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts Income or Expenses which are not attributable or allocable to segments have been disclosed as unallocable Income / Expenses Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment Geographical revenues are allocated based on the location of the customer

5. Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountnts of India are given below

1. KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam, Chairman Sri B Saravanan, Managing Director

2 RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Balasubramaniam

Relatives

Sri B Saravanan (Son)

Sri S V Alagappan (Brother)

Sri S V Arumugam (Brother)

Sri B Saravanan

Relatives

Sri S V Balasubramaniam (Father)

3 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

Annamallai Retreading Company Private Limited

Annamallai Enterprise Limited

Bannari Amman Spinning Mills Limited Bannari Amman Exports Limited Madras Sugars Limited Shiva Cargo Movers Limited Shiva Distilleries Limited Shiva Texyarn Limited

6 Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets During the year the company had reviewed the carrying value of assets for finding out impairment if any The review has revealed that there is no impairment as per Accounting Standard 28

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

8 The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Alathukombai Village Sathyamangalam Erode District Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered has not been provided in the books

9 There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date

10 Foreign currency exposures that are not hedged by a derivative instrument or otherwise are as under :-

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Mar 31, 2012

A. Terms / rights attached to equity shares

The company has issued only one class of equity shares having face value of Rs.10/- each. O ne equity share carries one vote. The members are entitled to vote in accordance with their shareholding. The Company declares and pays dividend in Indian rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting

1.1 Rupee term loan of Rs. 4200 Lakhs (Rs.5600 Lakhs) is secured by pari passu charge on the movable plant and machinery and pari passu second charge on the current assets of the Co-generation Plant at Sugar Unit IV. The loan is further secured by mortgage on lands admeasuring 50.93 acres and buildings thereon pertaining to the Co-generation Plant at Sugar Unit-IV

The loan carries interest at the rate of Bank s Base rate plus 2.25% and repay able in 20 equal quarterly installments of Rs.350 Lakhs each starting from June 2010

Out of the above loan, amount repayable within twelve months is Rs 1400 lakhs (Rs.1400 Lakhs) is grouped under other current liabilities

1.2 The two years Corporate Loan of Rs.5625 lakhs (Nil) is against assignment of receivables from Electricity Board (free from encumbrance). The loan carries interest at the rate of Bank s Base rate plus 1% and repay able in 24 equal monthly installments of Rs.312.50 Lakhs each starting from October 2011

Out of the above loan, amount repayable within twelve months is Rs 3750 lakhs (Nil) which is grouped under other current liabilities

1.3 Loan from Sugar Development Fund (Government of India) availed for modernization/expansion of sugar unit - I amounting to Rs. 775.39 Lakhs (Rs. 1085.55 Lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit - I

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and interest thereon commenced after a period of 8 years from the date of disbursement and in five equal annual installments. The loan was disbursed during the financial year 2002

Out of the above loan, amount repayable within twelve months is Rs 310.16 lakhs (Rs. 310.16 lakhs) which is grouped under other current Liabilities

1.4 Loan from Sugar Development Fund (Government of India) availed for co-generation plant in unit-II, amounting to Rs. 290.17 Lakhs (Rs.580.34 Lakhs) is secured by way of exclusive second charge on the movable and immovable properties of Sugar Unit-II

The loan carries interest at the rate of 2% below the bank rate prevailing on the date of disbursement. Repayment of principal and interest thereon commenced after the expiry of three years and in ten equal half yearly installments. The Loan was disbursed during the financial year 2005

Out of the above loan, amount repayable within twelve months is Rs.290.17 lakhs (Rs.290.17 Lakhs) which is grouped under other current liabilities

1.5 Term loan of Rs. 136.84 lakhs (Rs.2379.55 Lakhs) under SEFASU notified by Government of India availed from Punjab

National Bank consortium consists of Punjab National Bank, Bank of Baroda, Canara Bank, The Karur Vysya Bank Ltd, Union Bank of India, Indian Overseas Bank, State Bank of Travancore, State Bank of India, State Bank of Hyderabad & Bank of India in secured by residual third charge on all fixed assets forming part of block assets and land and buildings of Sugar Units - I, II and III

The loan carries interest subvention at the rate of 12% per annum and is repayable in 24 equal installments after the expiry of 2 years from the date of disbursement

The loan amount repayable within twelve months is Rs 136.84 lakhs (Rs 2276.72 lakhs) is grouped under other current liabilities

2.1 C ash Credit and other Working Capital Limits/ Demand Loan sanctioned by Punjab National Bank consortium consists of Punjab National Bank, Bank of Baroda, Canara Bank, The Federal Bank Limited, The K arur Vysya Bank Limited, Union Bank of India, Indian Overseas Bank, State Bank of Travancore, State Bank of India, State Bank of Hyderabad, Bank of India and Axis Bank Limited to the Company s Sugar Units are secured by way of hypothecation of current assets and other movable block assets of the Sugar Units and third mortgage on the immovable properties of the Sugar Units

The credit limits availed as at 31.3.2012 is Rs. 19810.30 Lakhs (Rs. 15903.49 Lakhs)

The availed limits are repayable on demand and carries interest ranges between Bank's base rate plus 0.50% and 3% per annum

2.2 Packing Credit Limit and other working capital limits sanctioned by Punjab National Bank and State Bank of India to Granite Division are secured by way of hypothecation of current assets and second mortgage on other movable and immovable properties of Granite Division

The credit limits availed as at 31.3.2012 is Nil (Rs. 83.78 lakhs)

The credit limits availed are repayable on demand and carries interest ranges between Bank s Base Rate plus 0.75% and 1.50% per annum

2.3 Cash Credit Limits sanctioned by Canara Bank and The Lakshmi Vilas Bank Ltd to Distillery Unit in Tamilnadu are secured by way of hypothecation of current assets and second charge on other movable and immovable properties of the Distillery

Unit in Tamilnadu

The credit limits availed as at 31.3.2012 is Rs. 148.39 Lakhs (Nil)

The cash credit limits are repayable on demand and carries interest ranges between Bank's base rate plus 0.85% and 1 % per annum

2.4 The Unsecured Short term loan of Rs. 3300 lakhs (Nil) from Rabo Bank is repayable within six months from the date of a ailment and carries interest at the rate of 10.95% per annum

The Unsecured Short term loan of Rs. 5000 lakhs (Nil) from HDFC Bank Ltd is repayable within six months from the date of a ailment and carries interest at the rate of 11% per annum

The Unsecured Short term loan of Rs. 8000 lakhs (Rs.7000 Lakhs) from Axis Bank Ltd is repayable within six months from the date of a ailment and carries interest at the rate of 10.50% per annum

The Unsecured Short term loan availed from Yes Bank was repaid in full (Rs.6000 lakhs)

The Unsecured Overdraft loan of Rs.267.24 Lakhs (Rs.2483.60 L akhs) from ICICI Bank Ltd is repayable on demand and carries interest at the rate of Base rate plus 1.75% per annum

The Unsecured Cash Credit loan of Rs.900.64 Lakhs (Nil) from IDBI Bank Ltd is repayable on demand and carries interest at Base rate plus 1% per annum

The vendors of the Company are yet to submit their status under Micro, Small and Medium Enterprises; hence the relevant information is not available with the company. Accordingly no disclosures relating to Micro, Small and Medium Enterprises have been made in the Accounts.

3. Contingent liabilities and commitments (to the extent not provided for) Contingent liabilities

3.1. The company has preferred a Writ Appeal before the Division Bench of the Humble High Court, Madras challenging the Order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs. 360.66 Lakhs (Rs. 352.34 Lakhs)

3.2. Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 S sugar Season. Chief Director (Sugar), Directorate of Sugar, Department of Food, New Delhi, has restricted the entitlement of Free sale Sugar Incentive to 2,75,000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar. The approximate unprovoked quantum under dispute is Rs. 683.35 Lakhs (Rs.683.35 lakhs).

3.3. Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the sugar production as free sugar for 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar. In respect of incentive sugar sold by Unit-I from 20.09.1991 to 31.01.1994 , the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs.33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company. The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority. Now the matter is pending before the adjudicating authority The excise duty in dispute is Rs.149.99 lakhs (Rs.149.99 lakhs).

3.4. The Entry Tax of Rs. 287.54 lakhs (Rs. 284.78 Lakhs) on Inter-state purchase of rough blocks is disputed

3.5. The Company has received a demand for payment of excise duty for Rs.148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a writ Petition filed in Honble High Court of Madras.

3.6. The Company has been asked to pay Electricity Tax of 10 Paise per unit with effect from 16th June 2003 for the electricity consumed from own captive power generators which has been disputed by filing a Writ Petition before the Hon'ble High Court of Madras. The approximate quantum under dispute is Rs. 213.85 Lakhs (Rs.194.02 Lakhs).

3.7. The company has preferred an appeal before the Commissioner of Income Tax (Appeals); challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction under section 80IA of the Income Tax Act, 1961 for the assessment year 2009-10. The quantum under dispute is Rs.695.40 Lakhs.

3.8. As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 97,25,647 and to export granite of a value of USD 79,87,176.

3.9. Estimated amount of contracts remaining to be executed on capital account - Tangible Assets not provided for is Rs. 967.87 Lakhs (Rs. 1134.56 lakhs).

4. Segment Information for the year ended 31st March 2012

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily Sugar, Power, Distillery and others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment/manpower efforts. Income or Expenses which are not attributable or allocable to segments have been disclosed as unallowable Income / Expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. Geographical revenues are allocated based on the location of the customer.

5. Related Party disclosures as required under Accounting Standard on "Related Party Disclosures issued by the Institute of Chartered Accountants of India are given below.

1. KEY MANAGEMENT PERSONNEL :

- Sri S V Bala subramaniam, Chairman

- Sri B Saravanan, Managing Director

2. RELATIVES OF KEY MANAGEMENT PERSONNEL :

Sri S V Bala subramaniam Relatives :

(1) Sri B Saravanan (Son)

(2) Sri S V Alagappan (B rother)

(3) Dr S V Kandasami (B rother)

(4) Sri S V A rumugam (Brother)

Sri B S aravanan Relatives:

Sri S V Bala subramaniam (Father)

3. ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL OR THEIR RELATIVES ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE :

1. Annamallai Retreading Company (P) Limited

2. Annamallai Enterprise (P) Limited

3. Bannari Amman Spinning Mills Limited

4. Bannari Amman Exports Limited

5. Madras Sugars Limited

6. Shiva Cargo Movers Limited

7. Shiva Distilleries Limited

8. Shiva Texyarn Limited

9. Vedanayagam Hospital Limited

6. Disclosure pursuant to Accounting Standard 28 (AS 28) on Impairment of assets - During the year, the company had reviewed the carrying value of assets for finding out impairment if any. The review has revealed that there is no impairment as per Accounting Standard 28.

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

8. The annual increase in the rate of power charges for supplies made from 20 MW Cogeneration plant at Al athukombai Village, Sathyamangalam, Erode District, Tamilnadu to Tamilnadu Electricity Board as prescribed in the Power Purchase Agreement entered, has not been provided in the books, considering the uncertainty in the realization of the same.

9. There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date.

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Mar 31, 2011

1 Sugar Development Fund Loan of Rs 134.95 Lakhs (Rs 134.95 Lakhs) is guaranteed by State Bank of Travancore on counter guarantee of the company

2 (a) The company has not received information from vendors regarding their status under Micro, Small and Medium

Enterprises Development Act, 2006 and disclosures relating to their outstanding amount and interest has not been made

(b) Amount credited to Investor Education and Protection Fund as on 31.03.2011 is Rs Nil (Nil)

3 Estimated amount of contracts remaining to be executed on capital account not provided for is Rs 1134.56 Lakhs (Rs 2284.66 lakhs)

4 The annual increase in the rate of power charges for supplies made from 20 MW co-generation plant at Alathukombai Village, Sathyamangalam Taluk, Erode District, Tamilnadu to Tamilnadu Electricity Board as prescribed in the power purchase agreement entered, has not been provided in the books, considering the uncertainty in the realisation of the same

5 Contingent Liabilities

(a) The company has preferred a Writ Appeal before the Division Bench of the Hon'ble High Court, Madras challenging the order pronounced in Writ Petition No. 4030/2002 dated 28.2.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No.474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs 352.34 Lakhs (Rs 344.01 Lakhs)

(b) Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 sugar season. Chief Director (Sugar), Directorate of Sugar, Department of Food, New Delhi, has restricted the entitlement of free sale sugar incentive to 2,75,000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court Challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as free sugar. The approximate unprovided quantum under dispute is Rs. 683.35 Lakhs (Rs 683.35 Lakhs)

(c) Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the sugar production as free sugar for 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar. In respect of incentive sugar sold by unit-I from 20.9.1991 to 31.1.1994, the Central Excise Department has issued show cause notices to the company to show cause why the difference of Rs 33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the company. The Company has filed Writ Petitions in Madras High Court and the High Court disposed the case with direction to submit all explanations before the adjudicating authority. Now the matter is pending before the adjudicating authority. The excise duty in dispute is Rs149.99 lakhs (Rs149.99 lakhs)

(d) The Entry tax of Rs 284.78 lakhs (Rs 268.80 Lakhs) on Inter-state purchase of rough blocks is disputed

(e) The Company has received a demand for payment of excise duty for Rs148.43 lakhs on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificates alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a Writ Petition filed in Hon'ble High Court of Madras

(f) The Company has been asked to pay Electricity tax of 10 Paise per unit with effect from 16th June 2003 for the electricity consumed from own captive power generators which has been disputed by filing a Writ Petition before the Hon'ble High Court of Madras. The approximate quantum under dispute is Rs 194.02 Lakhs (Rs 173.82 Lakhs)

(g) The company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction under section 80IA of the Income Tax Act 1961 for the assessment year 2008-09. The quantum under dispute is Rs 404.85 Lakhs

(h) As at the year end the Company has an obligation under EPCG Scheme to export sugar of a value of USD 9725647 and to export granite of a value of USD 4517414

6 (a) There are no derivative financial instruments either for hedging or for speculation outstanding as at the Balance Sheet date

7 Disclosure pursuant to Accounting Standard 28 (AS 28) on impairment of assets - During the year, the company had reviewed the carrying value of assets for finding out impairment if any. The review has revealed that there is no impairment as per AS 28

8 Amount due from Directors is Nil (Nil ). Maximum amount due from Directors during the year is Nil (Nil)

9 Amount due from officers of the company is Rs 4.98 Lakhs (Rs 11.72 Lakhs). Maximum amount due from officers of the company during the year is Rs 11.00 Lakhs (Rs 12.48 Lakhs)

10 Related Party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below

1 Key Management Personnel

Sri S V Balasubramaniam, Chairman Sri B Saravanan, Managing Director

2 Relatives of Key Management Personnel

Sri S V Balasubramaniam

Relatives :

(1) Sri B Saravanan - Son

(2)Sri S V Alagappan - Brother

(3)Dr S V Kandasami - Brother

(4) Sri S V Arumugam - Brother

Sri B Saravanan

Relatives

(1) Sri S V Balasubramaniam -Father

3 Enterprises over which Key Management Personnel or their Relatives are able to exercise significant influence

1 Annamallai Retreading Company (P) Limited

2 Madras Sugars Limited

3 Anamallais Automobiles (P) Limited

4 Bannari Amman Spinning Mills Limited

5 Shiva Distilleries Limited

6 Vedanayagam Hospital Limited

7 Shiva Texyarn Limited

Notes : (1) Remuneration to key management personnel is disclosed in Schedule No. 17 (read with item No. 14 in notes attached to and forming part of accounts)

(2) Sitting fees to Directors is disclosed in Schedule No. 17

(3) Balance outstanding as on 31st March 2011 is Nil (Nil)

18 Earnings per share

(a) Weighted average number of equity shares of Rs.10/-each (i) Number of shares at the beginning of the year

(ii) Number of shares at the end of the year

Weighted average number of equity shares outstanding during the year

(b) Net Profit after tax available for equity shareholders (Rs in Lakhs)

(c) Basic and diluted earnings per share (Rs)

11 Figures for the previous year have been suitably regrouped wherever necessary to confirm to this year's classification