Notes to Accounts of Dharani Sugars & Chemicals Ltd.

Mar 31, 2024

p) Provisions, contingent liabilities and contingent asset
Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event and it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are discounted, if the effect of the time value of money is material, using pre-tax rates that reflects the
risks specific to the liability. When discounting is used, an increase in the provisions due to the passage of time
is recognised as finance cost. These provisions are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates.

Necessary provision for doubtful debts, claims, etc., are made if realisation of money is doubtful in the judgement
of the management.

Contingent liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a
present obligation that is not recognized because it is not probable that an outflow of resources will be required to
settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot
be recognized because it cannot be measured reliably. Contingent liabilities are disclosed separately.

Show cause notices issued by various Government authorities are considered for evaluation of contingent
liabilities only when converted into demand.

Contingent assets

Where an inflow of economic benefits is probable, the Company discloses a brief description of the nature of the
contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect.
Contingent assets are disclosed but not recognised in the financial statements.

q) Cash and cash equivalents

Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short-term balances with
original maturity of less than 3 months, highly liquid investments that are readily convertible into cash, which are
subject to insignificant risk of changes in value.

r) Cash Flow Statement

Cash flows are presented using indirect method, whereby profit/ (loss) before tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which are
repayable on demand form an integral part of an entity''s cash management, bank overdrafts are included as a
component of cash and cash equivalents for the purpose of Cash flow statement.

s) Earnings per share

The basic earnings per share are computed by dividing the net profit for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.

Diluted EPS is computed by dividing the net profit after tax by the weighted average number of equity shares
considered for deriving basic EPS and also weighted average number of equity shares that could have been
issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed
converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are
determined independently for each period presented. The number of equity shares and potentially dilutive equity
shares are adjusted for bonus shares, as appropriate.

41 Operating Segments

The Company''s operations predominantly relate to manufacture of Sugar, Co-generation of Power and
production of Industrial Alcohol. Other business segments reported are Distillery and Power. Sugar segment
includes molasses and other by-products. Segment Revenue, Segment Results, Segment Assets and Segment
Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a
reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate
cost. Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated
corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average
market price. (ii) Power used by other segments is based on 90% of the market price.

* includes loans recalled and classified as repayable on demand in the financials. Figures in brackets represent
previous year numbers.

The Promoters and group companies have pledged 93,80,794 equity shares of the Company to the Banks/
Financial Institutions on pari-passu basis for the facilities availed by the Company including working capital
facilities. In addition, the Company has pledged 16,51,374 shares of the associates with the ICICI Bank on
exclusive basis for the ECB loan and Rupee Term Loan. Further pledge of 51,21,500 Equity Shares of Rs.
10/- each held by the Company in M/s Appu Hotels Limited to the Banks/ Financial Institutions for the Working
Capital facilities and Term Loans.

Repayment Details

The borrowings from the above banks and financial institutions have been classified by the respective lenders
as non-performing assets. All the banks and financial institutions have also issued notice calling back the loans.
Accordingly, all the outstanding loans have been reclassified as repayable on demand as required by Ind AS 1
"Presentation of Financial Statements". Also refer Note 48.

43 Financial Instruments
Capital management

The Company manages its capital to ensure that the Company will be able to continue as going concern, while
maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual operating plans and long-term
product and other strategic investment plans. The funding requirements are met through equity and other long-
term/short-term borrowings.

For the purposes of Company''s capital management, capital includes consists of net debt (borrowings as
detailed in Note 42 offset by cash and bank balances) and total equity of the Company. The Company monitors
the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of
the Company

Financial risk management objectives

The treasury function provides services to the business, co-ordinates access to domestic and international
financial markets, monitors and manages the financial risks relating to the operations through internal risk
reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including
currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge
risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the board
of directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and
the investment of excess liquidity. The Company does not enter into or trade financial instruments, including
derivative financial instruments, for speculative purposes.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result
from a change in the price of a financial instrument. The Company''s activities expose it primarily to the financial
risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its
currency and interest rate exposures through a centralized treasury division. The use of derivative instruments
is subject to limits and regular monitoring by appropriate levels of management.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange
rate fluctuations arise. The Company actively manages its currency rate exposures through a centralised treasury
division and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative
instruments, if any, is subject to limits and regular monitoring by appropriate levels of management.

Disclosure of hedged and unhedged foreign currency exposure

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities
at the end of the reporting period are as follows:

Foreign currency sensitivity analysis

Movement in the functional currencies of the various operations of the Company against major foreign currencies
may impact the Company''s revenues from its operations. Any weakening of the functional currency may impact
the cost of borrowings and consequently may increase the cost of financing the Company''s capital expenditures.

The following table details the Company''s sensitivity movement in the foreign currencies. The foreign exchange
rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a
currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency
by 2%. 2% represents management''s assessment of the reasonably possible change in foreign exchange rates.
The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts
their translation at the period end for a 2% change in foreign currency rates. The sensitivity analysis includes
external loans as well as loans to foreign operations within the Company where the denomination of the loan is
in a currency other than the functional currency of the lender or the borrower.

In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk
because the exposure at the end of the reporting period does not reflect the exposure during the year.

Interest rate risk management

The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest
rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate
borrowings and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with
interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.
Further, in appropriate cases, the Company also effects changes in the borrowing arrangements to convert
floating interest rates to fixed interest rates.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives
and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is
prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding
for the whole year. A 25 basis point increase or decrease is used when reporting interest rate risk internally to
key management personnel and represents management''s assessment of the reasonably possible change in
interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company''s
profit for the year ended March 31, 2023 would decrease/ increase by Rs.0 (March 31, 2022 : decrease/
increase by Rs.0). This is mainly attributable to the Company''s exposure to interest rates on its variable rate
borrowings.

Equity price risk

Equity price risk is related to the change in market reference price of the investments in equity securities. The
fair value of some of the Company''s investments in equity instruments exposes the Company to equity price
risks. In general, these securities are not held for trading purposes.

Equity price sensitivity analysis.

The fair value of equity instruments as at March 31, 2023 and March 31, 2022 was Rs.1,464.97 lakhs and
Rs.1,465.04 lakhs respectively. A 5% change in prices of equity instruments held as at March 31, 2023 and
March 31,2022, would result in an impact of Rs.73.24 and Rs.73.24 Cash on equity, respectively.

Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract
or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating
activities primarily trade receivables and from its financing/ investing activities, including deposits with banks,
mutual fund investments and foreign exchange transactions. The Company has no significant concentration of
credit risk with any counterparty.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure
is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables,
margin money and other financial assets excluding equity investments.

(a) Trade Receivables

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for
each customer and, based on the evaluation, credit limit of each customer is defined. Wherever the Company
assesses the credit risk as high, the exposure is backed by either bank, guarantee/letter of credit or security
deposits.

The Company does not have higher concentration of credit risks to a single customer. As per simplified approach,
the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate

the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding
is for longer period and involves higher risk. In respective dues from the Government, the Company has
considered them as fully recoverable and no allowance for expected credit loss is required.

(b) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits

Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the
said deposits have been made with the banks/financial institutions, who have been assigned high credit rating
by international and domestic rating agencies.

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with
the reputed Banks.

Investments of surplus funds are made only with approved financial institutions/ counterparty. Investments
primarily include bank deposits, investment in units of quoted mutual funds issued by high investment grade
funds etc. These bank deposits, mutual funds and counterparties have low credit risk. The Company has standard
operating procedures and investment policy for deployment of surplus liquidity, which allows investment in bank
deposits, debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure
in equity markets.

Offsetting related disclosures

Offsetting of cash and cash equivalents to borrowings as per the consortium agreement is available only to
the bank in the event of a default. Company does not have the right to offset in case of the counter party''s
bankruptcy, therefore, these disclosures are not required.

Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company invests its surplus funds in bank fixed deposit and mutual funds, which carry minimal mark to
market risks. The Company also constantly monitors funding options available in the debt and capital markets
with a view to maintaining financial flexibility.

Liquidity tables

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities
with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Company can be required to pay.

44 Trade Receivables from TANGEDCO

Trade receivables includes Rs.2,800.78 Lakhs due from TANGEDCO is outstanding for more than 3 year.
The Company is following up for recovery of the same and initiated the required steps. The Company was
also initiated steps through South Indian Sugar Mills Association (SISMA) to represent to the Government of
Tamilnadu for instructing TANGEDCO to pay the dues. As required by Ind AS 109 "Financial Instruments", the
Company on a prudent basis provided for allowance for expected credit loss aggregating to INR 2,349.64 Lakhs
as of March 31, 2023.

Since these are due from Government Undertakings and are arising from contractual obligation of those
undertakings, in the opinion of the management, no further allowance for expected credit loss is considered
necessary.

45 Operating lease

The Company has entered into operating lease arrangements for certain facilities with lease term ranging from 2
years to 3 years. The leases are cancellable at the option of either party to lease and may be renewed based on
mutual agreement of the parties. Accordingly, these leases will not qualify for recognising right of use assets and
related lease liability as per Ind AS 116. The amount recognised in the statement of profit and loss as expenses
for the year is Rs. 26.74 Lakhs (Previous year Rs.43.59 Lakhs).

46 Corporate insolvency resolution process

The Company''s net worth is negative and the borrowings from banks and other financial institutions have been
classified by the lenders as non-performing assets. All the banks and other financial institutions have also issued
notice calling back the loans. Considering the above facts and since the Company''s One Time Settlement
("OTS") proposal is also under negotiation, as in the previous periods, the Company stopped providing interest
on the outstanding borrowings from banks and financial institutions and has not restated the foreign currency
loans after the NPA date.

However, the Hon''ble NCLT, Chennai Bench, admitted the CIRP application filed by a financial creditor of the
Company as more fully explained in Note 1 above and the Interim Resolution Professional is receiving claims
from the financial and operating creditors towards principal and interest due till the date of admission of CIRP. In
the meanwhile, the Promoter of the Company had organised and had deposited Rs. 6,453.30 lakhs (including
of Rs. 2500.00 Lakhs in the earlier year) as on date in the office account (NO LIEN Account) of Indian Bank as
stipulated by the consortium of bankers/financial institutions for the OTS settlement proposal. However, as per
the arrangement with the Promoter, the money deposited by the Promoter shall remain as the Assets of the
Promoter or his affiliates until the settlement proposal is duly sanctioned and approved by the lenders. As per
legal advice obtained by the promoters, the entire amount of Rs 6,453.30 lakhs kept in the office account of
Indian Bank NO LIEN account will be recorded as loan from the promoters'' group after the withdrawal of CIRP In
case no settlement proposal gets materialised, the said money is to be refunded to the promoter/his affiliates
In the opinion of the management, in view of the OTS sought by the Company and the also due to the present
developments at Hon''ble NCLT/ NCLAT, there will be no further interest liability on the Company from the NPA
date.

Pending resolution of the above uncertainties, which depends upon the future events, the Company has prepared
the financial statements on a going concern basis and has not considered any adjustment in the carrying value
of non-financial and financial assets/ liabilities.

48 Retirement benefit plans
Defined contribution plans

In accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect
of provident fund, a defined contribution plan, in which both employees and the Company make monthly
contributions at a specified percentage of the covered employees'' salary. The contributions, as specified under
the law, are made to the provident fund and pension fund of Government of India. The Company also has
superannuation plan and contributions are funded with LIC.

The total expense recognised in profit or loss of Rs. 15.67 lakhs (for the year ended March 31, 2022: Rs. 97.83
lakhs) represents contribution payable to these plans by the Company at rates specified in the rules of the plan.

Defined benefit plans

(a) Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or
on termination of employment of an amount equivalent to 15 days salary payable for each completed year of
service. Vesting occurs upon completion of five years of service. The Company has not accounted for the liability
for gratuity benefits payable in the future based on an actuarial valuation during the current financial year and
accordingly, the related disclosure could not be presented in the financial statements.

(b) Compensated absence

The leave scheme is a final salary defined benefit plan, that provides for a lumpsum payment at the time of
separation based on scheme rules the benefits are calculated on the basis of last drawn salary and the leave
count at the time of separation and paid as lumpsum.

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected
salary increase. The sensitivity analyses below have been determined based on reasonably possible changes
of the respective assumption occurring at the end of the reporting period, while holding all other assumptions
constant.

(vii) Sensitivity analysis

There was no change in the methods and assumptions used in preparing the sensitivity analysis from previous
year.

(viii) Reason for non-disclosure of current year information

Ind AS 19 “Employee Benefits” requires provision towards gratuity and compensated absences should be made
based on actuarial valuation. However, the Company could not obtain actuarial report and the provision for the
current year was made only on an estimated basis. Accordingly, disclosures required by Ind AS 19, in respect
of defined benefit fund and long term employee benefits could not be made.

(iv) Borrowings from banks

(a) The Company has been sanctioned working capital limit in excess of five crore rupees, in aggregate, from
banks or financial institutions on the basis of security of current assets. However, the since the account
became NPA, the Company has not filed any quarterly returns or statements with such banks or financial
institutions.

(b) The Company''s account is declared as a wilful defaulter by the one of the consortium banks as per the
minutes of the consortium dated 25.6.2021. However, the company has objected vide its letter dated
27.9.2022, wherein it was mentioned that the said bank has not followed the guidelines specified in the RBI
rules which are mandatory in nature before declaring the company / directors as wilful defaulters. No formal
communication has been received from the Bank on the classification of the Company''s account as wilful
defaulter. If no action is taken by the bank in reversing their stand, further legal action will be taken by the
Promoter to correct the status. Company is in negotiation for OTS from the lenders as more fully explained
in Note 46.

(v) Relationship with Struck off Companies

The Company did not have any transactions with Companies struck off under Section 248 of Companies Act,
2013 or Section 560 of Companies Act, 1956 considering the information available with the Company.

(vi) Compliance with number of layers of companies

The Company do not have any parent company and accordingly, compliance with the number of layers prescribed
under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is
not applicable for the year under consideration.

Formula adopted for above Ratios:

Current Ratio = Current Assets / (Total Current Liabilities - Security Deposits payable on Demand - Current
maturities of Long Term Debt)

Debt-Equity Ratio = Total Debt / Total Equity

Debt Service Coverage Ratio = (EBITDA - Current Tax) / (Principal Repayment Gross Interest on term
loans)

Return on Equity Ratio = Total Comprehensive Income / Average Total Equity

Inventory Turnover Ratio (Average Inventory days) = 365 / (Net Revenue / Average Inventories)

Trade receivables Turnover Ratio (Average Receivables days) = 365 / (Net Revenue / Average Trade
receivables)

Trade Payables Turnover Ratio (Average Payable days) = 365 / (Net Revenue / Average Trade payables)

Net Capital Turnover Ratio = (Inventory Turnover Ratio Trade receivables turnover ratio - Trade payables
turnover ratio)

Net Profit Ratio = Net Profit / Net Revenue

Return on Capital employed = (Total Comprehensive Income Interest) / (Average of (Equity Total Debt))
Return on Investment (Assets) = Total Comprehensive Income / Average Total Assets
Reasons for Variation if more than 25%

Current Ratio

The current liabilities have increased significantly during the year, since the Company could not repay them due
to cash crunch and very minimal operations. This resulted in the decrease of current ratio.

Inventory Turnover ratio

During the year, there was very minimal production and the sales were effected using the previous year stock
as well. Further the Company has made provision for work in progress and finished goods for slow moving and
non moving inventory. This resulted in significant decease in inventory turnover ratio.

Trade Receivables Turnover ratio

The company has made additional provisions for expected credit losses, which resulted in decrease of trade
receivables. Since the ratio is calculated on a net basis, it looks like there is a significant decrease in the trade
receivables turnover ratio.

(viii) Scheme of arrangements

There are no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of
the Companies Act, 2013 during the year.

(ix) Advance or loan or investment to intermediaries and receipt of funds from intermediaries

The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any
other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries)
with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries.

The company has also not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.

(x) Undisclosed Income

The Company do not have any transaction which are not recorded in the books of accounts that has been
surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during any of the
years.

(xi) Details of Crypto Currency or Virtual Currency

The Company did not trade or invest in Crypto Currency or virtual currency during the financial year. Hence,
disclosures relating to it are not applicable.

50 The Hon''ble National Company Law Tribunal (“NCLT”), Chennai Bench, admitted the Corporate Insolvency
Resolution Process (“CIRP”) application filed by a financial creditor of the Company and appointed an Interim
Resolution Professional (“IRP”), in terms of the Insolvency and Bankruptcy Code, 2016 (“the Code”) to manage
the affairs of the Company vide order dated July 29, 2021 received by the Company on July 31, 2021. On an
appeal filed by a director of the company, the Hon''ble National Company Law Appellate Tribunal (“NCLAT”) has
directed the RP to carry out the CIRP Proceedings and the next hearing has been listed for June 5, 2023.

In view of pendency of the CIRP, and in view of suspension of the powers of the board of directors, RP is taking
on record the unaudited financial results. The RP has relied upon the assistance provided by the management
in the review of the audited financial results and the representations, clarifications and explanations provided by
the Managing Director, Chief Financial Officer, other directors, key management personnel of the Company in
reviewing the unaudited financial results.

The Company''s net worth is negative and the borrowings from banks and other financial institutions have been
classified by the lenders as non-performing assets. All the banks and other financial institutions have also issued
notice calling back the loans. Considering the above facts and since the promoters'' Settlement proposal is
also under negotiation, as in the previous periods, the Company stopped providing interest on the outstanding
borrowings from banks and financial institutions and has not restated the foreign currency loans after the NPA
date.

In the opinion of the management, in view of the OTS sought by the Company and the also due to the present
developments at Hon''ble NCLT/ NCLAT, there will be no further interest liability on the Company from the NPA
date.

Pending resolution of the above uncertainties, which depends upon the future events, the Company has prepared
the financial statements on a going concern basis and has not considered any adjustment in the carrying value
of non-financial and financial assets/ liabilities.

A corporate insolvency resolution process (CIRP) and the appointment of resolution professional were admitted
in the case of one of the major investees of the Company by the Hon''ble NCLT, Chennai Bench vide its order
dated May 5, 2020. The carrying amount of the investments as at June 30, 2022 is Rs. 1,455.53 Lakhs.

The Hon''ble NCLT has passed an order approving the resolution plan submitted by one of the resolution
applicants. Aggrieved by this Order, the investee has filed an application before the Hon''ble National Company
Law Appellate Tribunal (“NCLAT”) praying for quashing the order of the Hon''ble NCLT The Hon''ble NCLAT
has set aside the resolution plan approved and ordered to recommence the CIRP process, including the
consideration of 12A application filed by the promoters of the investee company. On an appeal against the order
of the Hon''ble NCLAT, the Hon''ble Supreme Court has heard the arguments of both the sides and judgement
was delivered on May 3, 2023 directing Adjudicating Authority (NCLT) to decide on the fresh resolution plan as
submitted by the promoter approved by CoC on its 19th Meetlng.

The Promoter has recently (on October 11, 2022) also given a proposal for settling the entire dues of the CoC
members U/S 12A of the IBC code and the required funding has been arranged by way of deposits and Bank
Guarantee. The proposal has been approved by the CoC with 100% voting in favour of the proposal .As per the
promoters settelment Proposal Uls 12A of lBC, the dues of all the secured and unsecured financial creditors,
operational creditors and all other stake holders including shareholders are fully accommodated.

Accordingly, in the opinion of the management, the Company will still be able to recover the entire carrying
amount of the investments, even in the aforesaid CIRP conditions. Based on the above estimate made by the
management, no adjustment has been made in the fair value of the investments in the aforesaid investee.

51 Status of the CIRP Proceedings: Corporate Insolvency Resolution Process (CIRP) of Dharani Sugars and
Chemicals Limited (DSCL) was ordered by Hon''ble NCLT, Chennai vide orders in IA/976/2019 on July 29, 2021,
and Mr. S. Rajendran was appointed as the Interim Resolution Professional (“IRP”).

Upon appointment, IRP took control and management of DSCL and has taken efforts to keep it as a going
concern. The word “management” used elsewhere in general refers to the previous management ie., promoters
whereas after commencement of CIRP the management of the corporate debtor vests with the IRP as per
Section 17 of IBC.IRP made a public announcement on 1st August 2021, intimating commencement of CIRP
and calling upon creditors to submit their claims against DSCL. IRP collated all claims received and filed a
report constituting Committee of Creditors (CoC) on August 21, 2021 and List of Creditors was published in the
website, IBBI and reported to Stock Exchanges.

Further as per the e-voting results dated September 22, 2022 CoC approved the appointment of Mr. Mahalingam
Suresh Kumar, Insolvency Professional as Resolution Professional. The appointment was confirmed by Hon''ble
NCLT, Chennai vide orders IA/1248(CHE)/2022 in IA/976/2019 dated November 18, 2022.

On February 8, 2023 RP convened the 11th CoC meeting in which the members decided to file an appropriate
application before the Hon''ble NCLT, Chennai Bench seeking extension of CIRP period by 30 days beyond the
maximum timelines specified under Section 12 of the IBC, 2016.The case was heard by the NCLT on March 3,
2023 and was posted for further hearing on May 29, 2023.

As the decision making on the plan is very crucial taking into consideration various factors, the lenders seek
these 60 days additional timeline to decide on the options either by themselves or through NARCL suitably. RP
also informed the COC members that the chairman of the Dharani Sugars have filed a Caveat Petition, that in
case liquidation petition is filed by the RP it shall be brought to their attention.

Claims Recieved:

Pursuant to the public announcement for submission of claims, IRP has received the claims from various
stakeholders including the farmers who have submitted the claim for their dues against the supply of
sugarcane and transportation charges. Banks and financial institutions have submitted their claim including
their interest liability as on CIRP commencement date (July 29, 2021) amounts to Rs. 805,92,89,155/- while
the corporate debtor did not provide for interest after NPA date. IRP has collated the claims based on the
books of accounts of the corporate debtor and the documents submitted by the respective stakeholders, and
the same was published in the website of Corporate debtor and filed with IBBI, NCLT and Stock exchanges.

On January 17, 2023, Revised List of Creditors as on January 10, 2023 has been filed with NCLT including the
claims of One operational creditor viz., Jain Irrigation Systems Ltd, who has filed an Application before NCLT,
Chennai seeking condonation of delay of 132 days in filing their claim with the IRP for a sum of Rs. 4,55 ,09,430/-.
As on 10th January the amount claimed by creditors amount to Rs. 979,80,56,123/- and amount of claims
admitted amount to Rs. 922,66,64,911/-.

52 Status of OTS /12A Proposal: The promoter has submitted a settlement proposal U/S 12A of the IBC on
February 3, 2023 along with the required deposits and Bank Guarantee to bank of India being the applicant

creditor. However the proposal was returned without taking for discussion. The Promoter is still confident of
settling the dues U/S 12A of IBC and revive the operations of the Company.

CIRP timeline of 330 days ended on February 19, 2023 and the COC in its 11th meeting decided to seek 30 days
extension from the AA for deciding on the Resolution plan voting. The said petition has been heard on March 10,
2023 and the matter is posted for further hearing on May 29, 2023.

Further the CoC has accorded its approval for seeking extension of CIRP for an additional period of 60 days
beyond the maximum timelines specified under Section 12 of the IBC, 2016 [after considering the pending 30
days extension request]”. It is posted for hearing on May 29, 2023.

53 The Company could not carry out physical verification of property, plant and equipment during the year due
to non-availability of staff at the units. However, in the opinion of the management, there will be no material
discrepancy between the books and physical assets as at the year end and accordingly, no adjustments are
required to be considered in the financial statements.

54 Comparative figures

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

As per our report of even date attached

For SRIVATSAN & ASSOCIATES For and on behalf of the board

Chartered Accountants Dharani Sugars and Chemicals Limited

Firm Registration No. 014921S
UDIN.No.23230195BGUNMT6462

N SRIVATSAN Dr.PALANI.G. PERIASAMY M. RAMALINGAM

Partner Executive Chairman Managing Director

Membership No. 230195 DIN : 00081002 DIN : 00278025

E P SAKTHIVEL M P KALIANNAN

Company Secretary Chief Financial Officer

Place : Chennai MAHALINGAM SURESH KUMAR

Date : May 27, 2023 Interim Resolution Professional

IPR No.: IBBI/ IPA-001/IP-P00110/
2017-2018/ 10217

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Mar 31, 2018

1 Corporate Information

Dharani Sugars and Chemicals Limited, is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956 and has its registered office in Chennai. The Company is engaged in the business of manufacturing white sugar, generation of electricity and production of industrial alcohol.

2 Basis of preparation of financial statements

Statement of compliance

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), the provisions of the Companies Act, 2013 (‘the Act'') (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind As are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Basis of preparation and presentation

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:

a) Derivative financial instruments

b) Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments)

Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in current and future periods.

Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the Company''s functional currency. All financial information presented in INR has been rounded to the nearest lakhs (up to two decimals).

The financial statements are approved for issue by the Company''s board of directors on May 28, 2018.

2A Critical accounting estimates and management judgments

In application of the accounting policies, which are described in note 2, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Information about significant areas of estimation, uncertainty and critical judgements used in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

Property, Plant and Equipment and Intangible Assets

The residual values and estimated useful life of PPEs and Intangible Assets are assessed by the technical team at each reporting date by taking into account the nature of asset, the estimated usage of the asset, the operating condition of the asset, past history of replacement and maintenance support. Upon review, the management accepts the assigned useful life and residual value for computation of depreciation/amortisation. Also, management judgement is exercised for classifying the asset as investment properties or vice versa.

Current tax

Calculations of income taxes for the current period are done based on applicable tax laws and management''s judgement by evaluating positions taken in tax returns and interpretations of relevant provisions of law.

Deferred Tax Assets (including MAT Credit Entitlement)

Significant management judgement is exercised by reviewing the deferred tax assets at each reporting date to determine the amount of deferred tax assets that can be retained / recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Fair value

Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

Impairment of Trade Receivables

The impairment for trade receivables are done based on assumptions about risk of default and expected loss rates. The assumptions, selection of inputs for calculation of impairment are based on management judgement considering the past history, market conditions and forward looking estimates at the end of each reporting date.

Impairment of Non-financial assets (PPE/ Intangible Assets)

The impairment of non-financial assets is determined based on estimation of recoverable amount of such assets. The assumptions used in computing the recoverable amount are based on management''s judgement considering the timing of future cash flows, discount rates and the risks specific to the asset.

Defined Benefit Plans and Other long term benefits

The cost of the defined benefit plan and other long term benefits, and the present value of such obligation are determined by the independent actuarial valuer. An actuarial valuation involves making various assumptions that may differ from actual developments in future. Management believes that the assumptions used by the actuary in determination of the discount rate, future salary increases, mortality rates and attrition rates are reasonable. Due to the complexities involved in the valuation and its long term nature, this obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities could not be measured based on quoted prices in active markets, management uses valuation techniques including the Discounted Cash Flow (DCF) model, to determine its fair value The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is exercised in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.

Provisions and contingencies

The recognition and measurement of other provisions are based on the assessment of the probability of an outflow of resources, and on past experience and circumstances known at the reporting date. The actual outflow of resources at a future date may therefore vary from the figure estimated at end of each reporting period.

2B Recent accounting pronouncements

Standards issued but not yet effective

The following standards have been notified by Ministry of Corporate Affairs

a. Ind AS 115 - Revenue from Contracts with Customers (effective from April 1, 2018)

b. Ind AS 116 - Leases (effective from April 1, 2019)

The Company is evaluating the requirements of the above standards and the effect on the financial statements is also being evaluated.

(d) Rights, preferences and restrictions in respect of equity shares issued by the Company

The company has only one class of equity shares having a par value of Rs.10 each. The equity shares of the company having par value of Rs.10/- rank pari-passu in all respects including voting rights and entitlement to dividend. The dividend proposed if any, by the Board of Directors, is subject to the approval of the shareholders in the ensuing Annual General Meeting.

3. Operating Segments

"The Company''s operations predominantly relate to manufacture of Sugar, Co-generation of Power and production of Industrial Alcohol. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products. Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis. The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively."

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price."

The Promoters and group companies have pledged 93,80,794 equity shares of the Company to the Banks / Financial Institutions on pari-passu basis for the facilities availed by the Company including working capital facilities. In addition, the Company has pledged 16,51,374 shares of the associates with the ICICI Bank on exclusive basis for the ECB loan and Rupee Term Loan. Further pledge of 51,21,500 Equity Shares of Rs 10/- each held by the Company in M/s Appu Hotels Limited to the Banks/ Financial Institutions for the Working Capital facilities and Term Loans.

REPAYMENT DETAILS:

(1) The outstanding Term Loan of Rs.14314.22 lakhs is repayable in quarterly instalments from the financial year(FY) 2018-19 to (FY) 2024-25 and it carries an average interest rate of 12% p.a.

(2) The outstanding Foreign Currency Loan of Rs.1570.43 lakhs from ICICI Bank in respect of Sankarapuram refinery project is repayable in half yearly instalment from financial year 2018-19 to 2019-20 and it carries an average interest rate of 8.52% p.a.

(3) The outstanding Rupee Term Loan (Excise) of Rs.2000.17 lakhs from Indian Bank is repayable in monthly instalments of financial year 2018-19 and it carries an interest rate of 13.70% p.a.

(4) The outstanding Rupee Term Loan of Rs. 3133.73 lakhs from Sugar Development Fund, Government of India in respect of Sankarapuram Project is repayable in half yearly instalments of financial year 2018-19 and it carries an interest rate of 4.77% p.a

(5) The outstanding Working Capital Term Loan (WCTL) of Rs.6095.01 Lakhs form Working Capital Bankers is repayable in quarterly instalments from financial year 2018-19 to 2024-25 and it carries an average interest rate of 12% p.a.

(6) The outstanding Funded Interest Term Loan of Rs.4288.59 Lakhs from Bank Financial Institutions is repayable in quarterly instalments from financial year 2018-19 to 2022-23 and it carries an average interest rate of 12% p.a

(7) The outstanding Rupee Term Loan of Rs. 1351.99 lakhs from IREDA in respect of Polur power project is repayable in quarterly instalment from financial year(FY) 2019-20 to 2029-30 and carries an average interest rate of 12.70% p.a.

(8) The outstanding Rupee Soft Term Loan of Rs. 2358.44 lakhs from Working capital bankers is repayable in monthly instalment from financial year(FY) 2018-19 to 2022-23 and carries an average interest rate of 12% p.a.

* Finance lease obligation is secured by way of hypothecation of respective vehicle acquired on Hire purchase with repayment term of 2 years.

4. Financial Instruments

Capital management

The Company manages its capital to ensure that entities in the Company will be able to continue as going concern, while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and other long-term/short-term borrowings.

For the purposes of Company''s capital management, capital includes consists of net debt (borrowings as detailed in note 44 offset by cash and bank balances) and total equity of the Company. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company

Financial risk management objectives

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the board of directors, which provide written principles on foreign exchange risk, the use of financial derivatives, and the investment of excess liquidity. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company actively manages its currency and interest rate exposures through a centralized treasury division. The use of derivative instruments is subject to limits and regular monitoring by appropriate levels of management.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company actively manages its currency rate exposures through a centralised treasury division and uses natural hedging principles to mitigate the risks from such exposures. The use of derivative instruments, if any, is subject to limits and regular monitoring by appropriate levels of management.

Disclosure of hedged and unhedged foreign currency exposure

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

Foreign currency sensitivity analysis

Movement in the functional currencies of the various operations of the Company against major foreign currencies may impact the Company''s revenues from its operations. Any weakening of the functional currency may impact the Company''s cost of imports and cost of borrowings and consequently may increase the cost of financing the Company''s capital expenditures.

The following table details the Company''s sensitivity movement in the foreign currencies. The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 2%. 2% represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 2% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Company where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower.

In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Interest rate risk management

The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied. Further, in appropriate cases, the Company also effects changes in the borrowing arrangements to convert floating interest rates to fixed interest rates.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company''s profit for the year ended March 31, 2017 would decrease/increase by Rs. 7.01 lakhs (March 31, 2017 : decrease/increase by Rs.8.24 lakhs). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

Equity price risk

Equity price risk is related to the change in market reference price of the investments in equity securities. The fair value of some of the Company''s investments in equity instruments exposes the Company to equity price risks. In general, these securities are not held for trading purposes.

Equity price sensitivity analysis. The fair value of equity instruments as at March 31, 2018, March 31, 2017 was Rs.2657.20 Lakhs and Rs.2648.95 lakhs respectively. A 5% change in prices of equity instruments held as at March 31, 2018 and March 31, 2017, would result in an impact of Rs.142.89 and Rs.132.45 Cash on equity, respectively.

Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from its financing/ investing activities, including deposits with banks, mutual fund investments and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure is the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, margin money and other financial assets excluding equity investments.

(a) Trade Receivables

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined. Wherever the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/letter of credit or security deposits.

The Company does not have higher concentration of credit risks to a single customer. As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

(b) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits

Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies.

Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investments of surplus funds are made only with approved financial institutions/ counterparty. Investments primarily include bank deposits, investment in units of quoted mutual funds issued by high investment grade funds etc. These bank deposits, mutual funds and counterparties have low credit risk. The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in bank deposits, debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Offsetting related disclosures

Offsetting of cash and cash equivalents to borrowings as per the consortium agreement is available only to the bank in the event of a default. Company does not have the right to offset in case of the counter party''s bankruptcy, therefore, these disclosures are not required.

Liquidity risk management

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company invests its surplus funds in bank fixed deposit and mutual funds, which carry minimal mark to market risks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

Liquidity tables

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

5. Retirement benefit plans

Defined contribution plans

In accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees'' salary. The contributions, as specified under the law, are made to the provident fund and pension fund of the Government of India. The Company also has superannuation plan and contributions are funded with LIC.

For Gratuity the total expense recognised in profit or loss is Rs.97.91 lakhs (for the year ended March 31, 2017: Rs. 78.75 lakhs) represents contribution payable to these plans by the Company at rates specified in the rules of the plan.

Defined benefit plans

(a) Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death, while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation. The liability is unfunded and is actuarially determined at each reporting date using the projected unit credit method.

(b) Compensated absence

The leave scheme is a final salary defined benefit plan, that provides for a lumpsum payment at the time of separation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the leave count at the time of separation and paid as lumpsum.

(c) Risks associated with defined benefit plans

The defined benefit plans typically expose the Company to actuarial risks such as investment risk, interest rate risk and salary risk.

The current service cost and the net interest expense for the year are included in the ‘employee benefits expense'' in profit or loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumption occurring at the end of the reporting period, while holding all other assumptions constant.

(vii) Sensitivity analysis

If the discount rate is 50 basis points higher (lower), the defined benefit obligation would decrease by Rs.12.11 lakhs (decrease by Rs.12.42 lakhs)

If the expected salary increases by 50 basis points higher, the defined benefit obligation would increase by Rs.13.61 lakhs (increase by Rs.13.20 lakhs)

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

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation 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.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from previous year.

6. Operating lease arrangements

Leasing arrangements

The Company has entered into operating lease arrangements for certain facilities with lease term ranging from 2 years to 3 years. . The leases are cancellable at the option of either party to lease and may be renewed based on mutual agreement of the parties. The amount reocgnised in the statement of profit and loss as expenses for the year is Rs.71.72 Lakhs (Previous year Rs.69.81 Lakhs)

7. Comparative figures

Previous year''s figures have been reclassified/ regrouped wherever necessary to conform to the current year''s.

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Mar 31, 2016

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. During the period ended 31st March 2016, the Company has not declared dividend to equity shareholders (31 March 2015: Rs. Nil per share)In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

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

The Promoters and group companies have pledged 9380794 equity shares of the Company to the Banks / Financial Institutions on paripassu basis for the facilities availed by the Company including working capital facilities. In addition, the Company has pledged 1651374 shares of the associates with the ICICI Bank on exclusive basis for the ECB loan and Rupee Term Loan. Further pledge of 51,21,500 Equity Shares of Rs 10/each held by the Company in M/s Appu Hotels Limited to the Banks/ Financial Institutions for the Working Capital facilities & Term Loans.

REPAYMENT DETAILS:

(1) The outstanding Term Loan of Rs.16186.70 lakhs is repayable in 32 structured quarterly installments from the financial year(FY) 2016-17 to (FY) 2024-25 and it carries an average interest rate of 12% p.a.

(2) The outstanding Foreign Currency Loan of Rs.3203.10 lakhs from ICICI Bank in respect of Sankarapuram refinery project is repayable in half yearly installment from financial year 2016-17 to 2019-20 and it carries an average interest rate of 8.52% p.a.

(3) The outstanding Rupee Term Loan (Excise) of Rs.5389.88 lakhs from Indian Bank is repayable in monthly installments from financial year 2016-17 to 2018-19 and it carries an interest rate of 13.70% p.a.

(4) The outstanding Rupee Term Loan of Rs. 3160.97 lakhs from Sugar Development Fund, Government of India in respect of Sankarapuram Project is repayable in half yearly installments from financial year 2016-17 to 2018-19 and it carries an interest rate of 4.77% p.a.

(5) The outstanding Rupee Term Loan of Rs. 582.09 lakhs from Sugar Development Fund, Government of India in respect of Polur Expansion Project is secured by bank guarantee and is repayable in annual installment from financial year 2016-17 to 2017-18 and it carries an interest rate of 4% p.a.

(6) The outstanding Working Capital Term Loan (WCTL) of Rs.7378 Lakhs form Working Capital Bankers is repayable in 32 quarterly installments from financial year 2016-17 to 2024-25 and it carries an average interest rate of 12% p.a.

(7) The outstanding Funded Interest Term Loan of Rs.4619.86 Lakhs from Bank/ Financial Institutions is repayable in 24 structured quarterly installments from financial year 2016-17 to 2022-23 and it carries an average interest rate of 12% p.a

(8) The outstanding Rupee Term Loan of Rs. 1730 lakhs from IREDA in respect of Polur power project is repayable in 39 quarterly installments from financial year 2018-19 to 2028-29 and carries an average interest rate of 13.71% p.a.

(9) The outstanding Rupee Soft Term Loan of Rs. 2631.02 lakhs from Working capital bankers is repayable in 72 monthly installments from financial year(FY) 2016-17 to 2023-24 and carries an average interest rate of 12% p.a.

* Finance lease obligation is secured by way of hypothecation of respective vehicle acquired on Hire purchase with repayment term of 2 years.

Cash Credit from Banks availed are secured by Hypothecation of stocks of Sugar, Stores and Spares, Stocks in Process and Book Debts and second charge on the Fixed Assets of the Company.

The Executive Chairman Dr. Palani G.Periasamy Director Mrs.Visalakshi Periasamy have given Personal guarantees for the Short term loans from banks .

# Includes due to Companies in which the directors are interested.

*Customer advances are repayable or adjustable against the supplies or on completion of supply contracts.

# Excise duty on sales amounting to Rs.1038.45 lakhs (31 March 2015: Rs.987.26 lakhs) has been reduced from sales in statement of profit & loss and excise duty on increase in stock amounting to Rs.410.00 lakhs (31 March 2015: Rs.16.24 lakhs) has been considered as expense in Note 22 of financial statements.

(10) Notes on Accounts:

(10.1) Note on Corporate Debt Restructuring

The Corporate Debt Restructuring (“CDR”) proposal was referred by the Company to CDR Cell and the said proposal was recommended by the consortium of lenders by the Indian Bank (Chennai). The CDR proposal was approved by the CDR Cell on January 16, 2015 and communicated vide final letter of Approval dated February 2, 2015. The cut-off date for the CDR proposal was 1st July 2014.

The Company has been sanctioned Working Capital Term Loan (WCTL) and Funded Interest Term Loan (FITL) and reschedulement of the existing term loans. As per the CDR package, the promoters have brought in an amount of Rs. 859 lakhs during the previous year ended 31^st March’2015 as unsecured loan.

(11) Share Application Money pending allotment

As part of the CDR opted by the Company, the promoter/ promoter group had brought in Rs.859 lakhs as unsecured loan in FY 2014-15. In terms of the approval accorded by the members through postal ballot and e-voting on 26^th March 2016 along with necessary in-principle approvals obtained from NSE & BSE, preferential allotment of shares is made to the promoter / promoter group of the company to the extent of Rs.338.83 lakhs at Rs.22/- per share comprising of Face Value of Rs.10/- per share and Securities Premium of Rs.12/- per share on 14^th May, 2016.

(12) Taxation

i. Provision for current tax:

The tax Provision for the current year is Rs. NIL (Previous year Rs.NIL)

ii. Deferred tax:

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 “Accounting for Taxes on Income”.

(13) Leases:

a. Operating Lease

The Company has entered into operating lease arrangements for its office premises. The leases are non-cancellable for a period of five Years from June’2011 to May’2016 based on mutual agreement of the parties. The lease agreements provide for an increase in the lease payments by 10 % for every two years.

b. Financial Lease

Vehicles includes vehicle obtained on financial lease. The lease term is for 24 months. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

(14) Deposits with Bank

Deposits with bank as of March 31, 2016 and March 31, 2015 include restricted deposits of Rs.261.63 lakhs and Rs.536.19 lakhs respectively. The restrictions are primarily on account of bank balances held as margin money deposits against guarantees/letter of credit.

(15) Other Information

i. Realizable value of Current Assets, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated. Sundry Debtors are partly confirmed.

b. Advances include Rent Advance of Rs.41.53 Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year Rs.41.53 Lakhs (Previous year Rs.41.53 Lakhs)

The above information and that given in Note 8.1 regarding Micro Small and Medium Enterprises have been determined to the extent the Company has received information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act,2006.

ii. The above information regarding related parties have been determined to the extent such parties have been identified on the basis of information available with the company.

iv. No balances in respect of the related parties have been provided for/written back/ written off except as stated above.

(16) Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system.

The Company’s operations predominantly relate to manufacture of Sugar, Co-Generation of power and production of Industrial Alcohol. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

(17) Foreign currency exposures

The Company had used derivative financial instruments in the form of forward exchange contracts to hedge its risks associated with foreign currency fluctuations during the year. Accounting policy for forward exchange contracts is given in note 1.k above. There are open forward contracts at the end of current and previous year. The details of Foreign Exchange Exposures as at the end of the year are given below:

(18) Previous year comparatives

The Company has reclassified the previous year figures in accordance with the requirements applicable in the current year.

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Mar 31, 2015

1. Background:

Dharani Sugars and Chemicals Limited (Company') was incorporated on 4th June 1987as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar, generation of electricity and production of industrial alcohol.

2.1 Note on Corporate Debt Restructuring (CDR)

The Corporate Debt Restructuring proposal was referred by the Company to Corporate Debt Restructuring Cell ("CDR Cell") and the said proposal was recommended by the consortium of lenders by the Indian Bank (Chennai). The CDR proposal was approved by the CDR Cell on January 16, 2015 and communicated vide final letter of Approval dated February 2, 2015. The cut-off date for the CDR proposal was 1st July 2014.

The Company has been sanctioned Working Capital Term Loan (WCTL) and Funded Interest Term Loan (FITL) and reschedulement of the existing term loans. The promoters are to arrange Rs. 8.59 Crores by way of unsecured loan / equity as their contribution to the said CDR package.

2.2 Taxation

i. Provision for current tax:

The tax Provision for the current year is Rs. NIL (Previous year Rs.NIL)

ii. Deferred tax:

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

2.3.1 Leases: a. Operating Lease

The Company has entered into operating lease arrangements for its office premises. The leases are non-cancellable for a period of five Years from June'2011 to May'2016 based on mutual agreement of the parties. The lease agreements provide for an increase in the lease payments by 10 % for every two years

b. Financial Lease

There were no financial leases entered into by the Company.

2.3.2. Deposits with Bank

Deposits with bank as of March 31, 2015 and March 31, 2014 include restricted deposits of Rs.536.18 lakhs and Rs.670.38 lakhs respectively. The restrictions are primarily on account of bank balances held as margin money deposits against guarantees.

2.3.3 Other Information

i. Realizable value of Current Assets, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year - Rs.41.53 Lakhs (Previous year - Rs.41.53 Lakhs)

2.3.4 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system.

The Company's operations predominantly relate to manufacture of Sugar, Co-Generation of power and production of Industrial Alcohol. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

2.3.5 Foreign currency exposures

The Company had used derivative financial instruments in the form of forward exchange contracts to hedge its risks associated with foreign currency fluctuations during the year. Accounting policy for forward exchange contracts is given in note 1.k above. There are open forward contracts at the end of current and not for the previous year. The details of Foreign Exchange Exposures as at the end of the year are given below:

2.3.6 Previous year comparatives

The Company has reclassified the previous yearfigures in accordance with the requirements applicable in the current year.

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Mar 31, 2014

1. Background:

Dharani Sugars and Chemicals Limited (Company'') was incorporated on 4th June 1987as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar, generation of electricity and production of industrial alcohol.

2 Term Loans for Unit III at Kalayanallur, Sankarapuram Taluk, Tamilnadu from Bank of India, Union Bank of India, Indian Bank, State Bank of India, Indian Overseas Bank, IREDA and Sugar development fund are secured on a pari-passu basis by an equitable mortgage of all the immovable properties of the Kalayanallur, Unit III, both present and future, and a charge on Company''s movable assets including plant and machinery Kalayanallur Unit III, and also save and except inventory and book debts and subject to prior charge of specified items in favour of the Company''s bankers for securing working capital facilities and joint mortgage by deposit of title deed with the Banks. Further pledge of 51,21,500 Equity Shares of Rs 10/- each held by the Company in M/s Appu Hotels Limited in favour of above mentioned Banks as additional securities.

3 Term loans from Indian Bank and State Bank of India for Distillery for Dharani Nagar Unit and Staff Quarters at Polur Unit are secured on a pari-passu basis by an equatible mortgage of all the immovable properties of the Dharani Vasudevanallur Unit and Polur unit, both present and future and a charge on companies movable assets including plant & machinery and also save and except inventory and book debts and subject to prior charge of specified items in favour of the companies bankers for securing working capital facilities and joint mortgage by deposit of title deeds with the banks.

4 Rupee Term Loan from ICICI Bank is secured by exclusive charge (including charge of ECB of USD 9 million sanctioned by ICICI Bank) on all the Borrowers movable assets including harvester machines pertaining to refinery unit at Sankarapuram funded out of this facility. The loan also have the first pari-passu Charge on immovable assets of Vasudevanallur & polur unit.

5 The outstanding Rupee Term Loan of Rs. 970.14 lakhs from Sugar Development Fund, Government of India in respect of Polur Expansion Project is secured by bank guarantee and is repayable in annual instalment from financial year (FY) 2014-15 to (FY) 2017-18 and it carries an interest rate of 4% p.a.

6 The outstanding Rupee Term Loan of Rs.716.40 lakhs from Banks in respect of Dharani Vasudevanallur Distillery expansion and Dharani Polur staff Quarters is repayable in monthly installments from financial year (FY) 2014-15 to (FY) 2015-16 and it carries an average interest rate of 14.73% p.a.

7 The outstanding Rupee Term Loan of Rs. 19945.04 lakhs from Banks, IREDA and Sugar Development Fund, Government of India in respect of Dharani Sankarapuram projects of Distillery, Power and Sugar is repayable in monthly /annual instalment from financial year(FY) 2014-15 to (FY) 2020-21 and it carries an average interest rate of 11.05% p.a

8 The outstanding Foreign Currency Loan of Rs.6268.38 lakhs from ICICI Bank and State Bank of India in respect of Dharani Sankarapuram projects of Distillery, Power and Sugar is repayable in monthly / half yearly instalment from financial year(FY) 2014-15 to (FY) 2019-20 and it carries an average interest rate of 7.14 % p.a.

9 The outstanding Rupee corporate Loan of Rs.1019.30 lakhs from State Bank of India is secured through second charge on the current assets of the Company and is repayable monthly installments from the financial year (FY) 2014-15 to (FY) 2016-17 and it carries an average interst rate of 14% p.a.

10 During the year the Company has received Excise Rupee Loan of Rs. 5539.60 lakhs from Indian Bank and is repayable on monthly instalment from financial year(FY) 2016-17 to (FY) 2019-20 and it carries an interest rate of 13.70 % p.a.

11 During the year the Company has received Rupee Term Loan of Rs.2000 lakhs from IREDA for Dharani Polur power project and is repayable in quarterly instalment from financial year(FY) 2016-17 to (FY) 2026-27 and it carries an interest rate of 13.71 % p.a.

12 Term Loan from Sugar Development Fund, Government of India, for the polur unit is secured through a Guarantee from Indian Bank to the extent of Rs. 1350 lakhs, which is secured by an equitable mortgage on Pari Passu basis of all the immovable properties of the Company and by a charge on Company''s movable assets including Plant and Machinery.

13 The Executive Chairman Dr. Palani G.Periasamy has given Personal guarantees for the loans availed from financial institutions / Banks and the aggregate amount outstanding as at the end of the year is Rs.31900 lakhs.

14 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs.743.44 lakhs (Previous year - Rs.1289.92 lakhs).

15 Contingent Liabilities

Claims against the Company not acknowledged as debt Rs.1928.70 Lakhs (Previous year Rs.287.08 lakhs)

16 Leases:

a. Operating Lease:

The Company has entered into operating lease arrangements for its office premises. The leases are non- cancellable for a period of five Years from June''2011 to May''2016 based on mutual agreement of the parties. The lease agreements provide for an increase in the lease payments by 10 % for every two years.

b. Financial Lease:

There were no financial leases entered into by the Company.

17 Deposits with Bank

Deposits with bank as of March 31, 2014 and March 31, 2013 include restricted deposits of Rs.670.38 lakhs and Rs.452.41 lakhs respectively. The restrictions are primarily on account of bank balances held as margin money deposits against guarantees.

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs. 670.38 lakhs (Previous year Rs.452.41 lakhs)

18 Capitalization of Borrowing Cost:

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets which are under development.

Interest capitalized during the year on Capital assets amounts to Rs.27.90 Lakhs and with respect to amount lying in work-in-progress is Rs.103.68 Lakhs (Previous Year Rs.2991.34 Lakhs)

19 Other Information

i. Realizable value of Current Assets, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year Rs.41.53 Lakhs (Previous year Rs.41.53 Lakhs)

20 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system.

The Company''s operations predominantly relate to manufacture of Sugar, Co-Generation of power and production of Industrial Alcohol. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

21 Previous year comparatives

The Company has reclassified the previous year figures in accordance with the requirements applicable in the current year.

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Mar 31, 2013

Background

Dharani Sugars and Chemicals Limited (Company) was incorporated on 4th June 1987 as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar, generation of electricity and production of industrial alcohol.

1.1 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. 1,289.92 lakhs (Previous year – Rs. 2,220.18 lakhs).

1.2 Contingent Liabilities

Claims against the Company not acknowledged as debt Rs.287.08 lakhs (Previous year- Rs. 276.96 lakhs)

1.3 Taxation

i. Provision for current tax:

The tax Provision for the current year is determined under MAT. The MAT liability is Rs.349.65 Lakhs (Previous year- Rs.334.75 lakhs)

ii. Deferred tax:

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

1.4.1 Deposits with Bank

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs.452.41 lakhs (Previous year Rs.425.08 lakhs)

1.4.2 Capitalisation of Borrowing Cost

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets which are under development.

Interest capitalized during the Year on capital assets under development amounts to Rs.2,991.34 Lakhs (Current Year Rs.1115.13 Lakhs and carryover from Previous Year Rs. 1876.21 Lakhs) (Previous Year Rs.1,156.67 Lakhs)

1.4.3 Other Information

i. Realizable value of Current Assets, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53 Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year - Rs.41.53 Lakhs (Previous year - Rs.41.53 Lakhs)

The above information and that given in Note 8.1 regarding Micro Small and Medium Enterprises have been determined to the extent the Company has received information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act,2006.

1.4.4 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system.

The Company''s operations predominantly relate to manufacture of Sugar, Co-generation of Power and Production of Industrial Alcohol. Other business segments reported are Distillery and power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy – (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

1.4.5 Foreign currency exposures

The Company had used derivative financial instruments in the form of forward exchange contracts to hedge its risks associated with foreign currency fluctuations during the year. Accounting policy for forward exchange contracts is given in note 24.2 above. There are no open forward contracts at the end of current and previous years. The details of Foreign Exchange Exposures as at the end of the year are given below:

1.4.6 Previous year comparatives

The Company had reclassified the previous year figures in accordance with the requirements applicable in the current year.

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Mar 31, 2012

Background:

Dharani Sugars and Chemicals Limited (Company') was incorporated on 4th June 1987 as a Limited Company under the Companies Act, 1956. The Company is engaged in the business of manufacture of white sugar , generation of electricity and production of industrial alcohol.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs.1.00(31 March 2011: Nil)In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1. Term Loans for Sankarapuram project from Bank of India, Union Bank of India, Indian Bank, State Bank of India, Indian Overseas Bank, IREDA and Sugar development fund are secured on a pari-passu basis by an equitable mortgage of all the immovable properties of the Company, both present and future, and a charge on Company's movable assets including plant and machinery and also save and except inventory and book debts and subject to prior charge of specified items in favour of the Company's bankers for securing working capital facilities and joint mortgage by deposit of title deed with the Banks. Further pledge of 5121500 Equity Shares of Rs 10/- each held by the Company in M/s Appu Hotels Limited in favour of above mentioned Banks as additional securities.

2. Term loans from IDBI bank, Indian Bank and State Bank of India are secured on a pari- passu basis by an equitable mortgage of all the immovable properties of the Dharani Nagar unit and Polur unit, both present and future and a charge on companies movable assets including plant & machinery and also save and except inventory and book debts and subject to prior charge of specified items in favour of the companies bankers for securing working capital facilities and joint mortgage by deposit of title deeds with the banks.

3. Rupee Term Loan from ICICI Bank is secured by exclusive charge (including charge of ECB of USD 9 million sanctioned by ICICI Bank) on all the Borrowers' moveable assets including harvester machines pertaining to refinery unit at Sankarapuram funded out of this facility. The loan also has the first pari-passu Charge on immovable assets of Vasudevanallur & Polur sugar plant.

a. The outsatnding Rupee Term Loan of Rs. 205 lakhs from Sugar Development Fund, Government of India in respect of Dharani II Raw sugar Project Cane development and Dharani I is repayable a Annual installments from financial year (FY) 2012-13 to FY 2013-14.

b. The outsatnding Rupee Term Loan of Rs. 1125.97 lakhs from Banks and Sugar Development Fund, Government of India in respect of Dharani II Expansion Project is repayable in monthly / Annual installments from financial year (FY) 2012-13 to FY 2018-19.

c. The outsatnding Rupee Term Loan of Rs. 1632 lakhs from Banks and Sugar Development Fund, Government of India in respect of Dharani I Distillery Expansion and Dharani II Staff Quarters is repayable in monthly installments from financial year (FY) 2012-13 to FY 2015-16.

d. The outsatnding Rupee Term Loan of Rs. 30998.08 lakhs from Banks / Financial Institution / Sugar Development Fund in respect of Dharani III Projects of Distillery, Power and Sugar is repayable in monthly / Quarterly and Half yearly installments from financial year (FY) 2012-13 to FY 2018-19.

4 Term Loan from Sugar Development Fund, Government of India, for the Polur unit is secured through a Guarantee from Indian Bank to the extent of Rs.1350 lakhs, which is secured by an equitable mortgage on Pari Passu basis of all the immovable properties of the Company and by a charge on Company's movable assets including Plant and Machinery.

5 The company has received Rs. 410 Lakhs from Sugar Development Fund, Government of India for cane development and raw sugar machinery which is secured against bank guarantee to the extent of Rs.410 lakhs.

6 The Executive Chairman Dr. Palani G. Periasamy has given Personal guarantees for the loans/working capital facilities availed from Financial Institutions/Banks.

# Excise duty on sales amounting to Rs.1072.47 lakhs (31 March 2011: 1825.08 lakhs) has been reduced from sales in Statement of Profit & Loss and excise duty on increase in stock amounting to Rs.81.54 lakhs (31 March 2011 Rs.708.22 lakhs) has been considered as income in note 22 of financial statement

1. Notes on Accounts

1.1 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. 2220.18 lakhs (Previous year - Rs. 2654.71 lakhs).

1.2 Contingent Liabilities

i. Claims against the Company not acknowledged as debt Rs. 276.96 lakhs (Previous year Rs. 604.74 lakhs)

ii. The Company has so far exported 213295 MT of white sugar (Including 34747 MT in previous year). With this the Company has completely fulfilled all its export obligations.

1.3 Taxation

i. Provision for current tax:

The tax Provision for the current year is determined under MAT. The MAT liability is Rs.334.75 lakhs.

ii. Deferred tax:

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

Break up of Deferred Tax Asset / Liability as on 31.03.2012 is as follows:

1.4.1 Deposits with Bank

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs. 425.08 lakhs (Previous year Rs.271.56 lakhs)

1.4.2 Capitalisation of Borrowing Cost:

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets which are under development.

Interest capitalized during the Year on capital assets under development amounts to Rs.1156.67Lakhs (Previous Year Rs.514.40 Lakhs)

1.4.3 Other Information

i. Realisable value of Current Assents, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53 Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding at any one time during the year Rs.41.53 Lakhs (Previous year Rs.41.53 Lakhs)

The above information and that given in Note 8 regarding Micro Small and Medium Enterprises have been determined to the extent the Company has received information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act,2006.

iv. No balances in respect of the related parties have been provided for/written back / written off except as stated above.

1.4.4 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system.

The Company's operations predominantly relate to manufacture of Sugar. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segment as also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter Segment Transfer Pricing Policy - (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

1.4.5 Foreign currency exposures

The Company had used derivative financial instruments in the form of forward exchange contracts to hedge its risks associated with foreign currency fluctuations during the year. Accounting policy for forward exchange contracts is given in note 23.2 above. There are no open forward contracts at the end of current and previous years. The details of Foreign Exchange Exposures as at the end of the year are given below:

1.4.6 Previous year comparatives

Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

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Mar 31, 2011

1.1. Background

Dharani Sugars and Chemicals Limited (Company) was incorporated on 4" June 1987 as a Limited

1.2.1 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. 2654.71 lakhs (Previous year- Rs. 4333.39 lakhs).

1.3.2 Contingent Liabilities

i. Claims against the Company not acknowledged as debt Rs.619.66 lakhs (Previous year -Rs.487.90 lakhs)

ii. Purchase Tax demand contested Rs.Nil (Previous year- Rs.745.68 lakhs)

iii. The Company has imported 381167.66 MT of raw sugar during the previous years and out of which 223957 MT has been imported under Advance License. As per the terms and conditions of License 213295 MT of white sugar will have to be exported within the prescribed period of the respective License.

The Company has so far exported 178548 MT of white sugar (Including 88758 MT in previous year). The Company is hopeful of fulfilling its balance export obligations. In the unlikely event of not fulfilling the export obligation, the Company has to pay the amount of duty concession availed in respect of its imports along with interest.

1.3.3 Taxation

i. Provision for current tax

Inview of current year losses under the provisions of the lncome Tax Act, 1961,and on the basis of the assessments carried out, the tax liability to Income-tax during the year is lower than the Minimum Alternate Tax. Hence, Minimum Alternate Tax (MAT) of Rs.93.11 lakhs is provided during the year.

ii. Deferred taxation

The Company had created deferred tax liability (net) in accordance with the requirements of the Accounting Standard 22 "Accounting for Taxes on Income".

1.3.4 Deposits with Bank

i. Deposits with Banks under lien to commercial tax officers Rs.0.03 lakhs (Previous year- Rs.0.03 lakhs)

ii. Deposit under lien to Bank / others, Guarantees / Performance Rs.Z71.56 lakhs (Previous year- Rs.370.Z9 lakhs)

1.3.5 Capitalisation of Borrowing Cost:

In line with Accounting Standard 16 issued by the ICAI, the Company has identified the borrowing cost with respect to specific assets at the New Unit lll at Sankarapuram.

Interest amount included in Capital Work in Progress Rs.539.85 Lakhs. (Previous Year - Rs. 60.16 Lakhs)

1.3.6 Other Information

i. Managerial Remuneration

Within the limit prescribed under Schedule XIII of the Companies Act, 1956 and approved by the Central Government and the shareholders.

The above working for commission is made in line with the approval received from Central Government. The managerial remuneration for the current year is in accordance with the provisions of Section 198 read with Schedule XIII of the Companies Act, 1956.

iii. Realisable value of Current Assents, Loans and advances

a. In the opinion of the Board, the investments, current assets, loans and advances are realizable at a value, which is at least equal to the amount at which these are stated, in the ordinary course of business and provision for all known and determined liabilities are adequate and not in excess of the amount stated.

b. Advances include Rent Advance of Rs.41.53 Lakhs paid to Dr. Palani G. Periasamy, Executive Chairman in respect of the property taken on lease for office purpose. Maximum amount outstanding atanyonetimeduringtheyearRs.41.53 Lakhs (Previous year Rs.41.53 Lakhs)

The above information and that given in Schedule 11 regarding Micro Small and Medium Enterprises have been determined to the extent the Company has received information from vendors regarding their status under Micro Small and Medium Enterprises Development Act,2006.

1.3.7 Related Party

i. Names of Related Parties:

Nature of relationship Name

Associate Enterprises M/s. Dharani Finance Limited(DFL)

M/s. Appu Hotels Limited (AHL)

M/s. PGP Educational & Welfare Society (PGPE&WS)

M/s. Dharani Developers Private Limited (DDPL)

Key Management Personnel Dr. Palani G. Periasamy, Executive Chairman

Mr. M. Ramalingam, Managing Director,

Mr. A. Sennimalai, Director

Enterprises Significantly M/s. Ananthi Developers Limited influenced by Key Management (ADL) Personnel

ii. The above information regarding related parties have been determined to the extent such parties have been identified on the basis of information available with the company.

iv. No balances in respect of the related parties have been provided for/written back/ written of except as stated above.

1.3.8 Segment Reporting

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns the organisation structure and internal reporting system.

The Company's operations predominantly relate to manufacture of Sugar. Other business segments reported are Distillery and Power. Sugar segment includes molasses and other by-products.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segmentas also amounts allocated on a reasonable basis.

The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively.

Inter segment Transfer Pricing Policy (i) The molasses supplied to Distillery segment is based on average market price. (ii) Power used by other segments is based on 90% of the market price.

1.3.9 Previous year comparatives

Previous year's figures have been regrouped/rearranged and reclassified wherever necessary to conform to current year's classifications.