I) Provisions and contingent liabilities
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 measured at management’s best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, as appropriate, the risks specific to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
A provision for onerous contract is recognised when the expected benefits to be derived by the Company
from a contract are lower than the unavoidable cost of meeting its obligation under the contract. The
provision is measured at the present value of the lower of the expected cost of terminating the contract and
the expected net cost of continuing with the contract. Before a provision is established, the Company
recognises any impairment loss on assets associated.
Contingent liabilities are possible obligations that arise from past events and whose existence will only be
confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of
the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount
cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of
outflow of economic benefits is remote.
The Company does not recognise a contingent liability but discloses its existence in the financial statements.
Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent
assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the
asset and related income are recognised in the period in which the change occurs.
m) Borrowing cost
Borrowing costs that are directly attributable to the acquisition, construction or erection of qualifying assets
are capitalised as part of cost of such asset until such time that the assets are substantially ready for their
intended use. Qualifying assets are assets which take a substantial period of time to get ready for their
intended use or sale.
When the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the borrowing
costs incurred are capitalized. When Company borrows funds generally and uses them for the purpose of
obtaining a qualifying asset, the capitalization of the borrowing costs is computed based on the weighted
average cost of general borrowing that are outstanding during the period and used for the acquisition of the
qualifying asset.
Capitalisation of borrowing costs ceases when substantially all the activities necessary to prepare the
qualifying assets for their intended uses are complete. Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing of funds. Borrowing costs include exchange differences
arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest
costs.
All other borrowing costs are recognised as an expense in the year in which they are incurred.
n) Leases
Company as a lessee
The Company recognizes a Right of Use (RoU) asset at cost and corresponding lease liability, except for
leases with term of less than twelve months (short term) and low-value assets In accordance with Ind AS
116, 'Leases'. The Company assesses whether a contract contains a lease, at the inception of a contract. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess whether a contract conveys the right to control the
use of an identified asset, the Company assesses whether:
- the contract involves the use of an identified asset
- the Company has substantially all of the economic benefits from use of the asset through the period of
the lease and the Company has the right to direct the use of the asset.
The cost of the right-of-use assets comprises the amount of the initial measurement of the lease liability, any
lease payments made at or before the inception date of the lease plus any initial direct costs, etc.
Subsequently, the right-of-use asset is measured at cost less any accumulated depreciation and
accumulated impairment losses, if any. The right-of-use asset is depreciated using the straight-line method
from the commencement date over the shorter of lease term or useful life of right-of-use assets unless the
lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of
the right-of-use asset reflects that the Company will exercise a purchase option. The estimated useful life of
the right-of-use assets are determined on the same basis as those of property, plant and equipment. Right of
use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are largely independent of those from other assets.
In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset
belongs. For lease liabilities at the commencement date, the Company measures the lease liability at the
present value of the lease payments that are not paid at that date. The lease payments are discounted using
the interest rate implicit in the lease, if that rate is readily determined. If that rate is not readily determined,
the lease payments are discounted using the incremental borrowing rate. For short-term and low value
leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over
the lease term. The carrying amount of lease liabilities is remeasured if there is a modification, a change in
the lease term, a change in the lease payments or a change in the assessment of an option to purchase the
underlying asset. When the lease liability is remeasured in this way, a corresponding adjustment is made to
the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero. Certain lease arrangements include the options to extend or
terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options
when it is reasonably certain that they will be exercised. The Company uses a single discount rate to a
portfolio of leases with similar characteristics.
Company as a lessor
At the inception of the lease, the Company classifies each of its leases as either an operating lease or a
finance lease. The Company recognises lease income as and when due as per terms of agreements. The
respective leased assets are included in the financial statements based on their nature.
o) Earnings per share (EPS)
Basic earnings / (loss) per share are calculated by dividing the net profit or loss for the year attributable to the
shareholders of the Company by the weighted average number of equity shares outstanding at the end of the
reporting period. The weighted average number of equity shares outstanding during the year is adjusted for
events of bonus / rights issue, if any, that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to
equity shareholders and the weighted average number of shares outstanding during the period are adjusted
for the effects of all dilutive potential equity shares.
p) Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker (“CODM”). In accordance with Ind AS 108, the Company has identified its Board
of Directors as the CODM.
The Company is primarily engaged in a single reportable business segment, namely “Sugar (including
distillery)”. Accordingly, based on the management approach prescribed under Ind AS 108, the Company
operates in a single operating segment, and hence no separate segment disclosures are required.
The CODM reviews the operating results of the Company as a whole for the purpose of making decisions
about resource allocation and performance assessment.
Since the Company operates in a single segment:
• There are no inter-segment revenues or transfers.
• There are no unallocable items requiring separate disclosure.
• All revenues, expenses, assets and liabilities relate to the single identified segment.
The accounting policies adopted for segment reporting are consistent with those used in the preparation of
the financial statements of the Company. Also refer note 55.
q) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Company has an established control framework with respect to the measurement of fair values. It
regularly reviews significant inputs and valuation adjustments.
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as
possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair
value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair
value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
Further information about the assumptions made in measuring fair values used in preparing these financial
statements is included in the respective notes.
Initial recognition and measurement
With the exception of trade receivables that do not contain a significant financing component, the Company
initially measures financial asset at its fair value, in the case of a financial asset not at fair value through profit
or loss, net of transaction costs. Trade receivables do not contain a significant financing component and are
measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section
2A (e) Revenue from contracts with customers.
Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the
date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets of the Company are classified in three
categories:
a) At amortised cost
b) At fair value through profit and loss (FVTPL)
c) At fair value through other comprehensive income (FVTOCI)
Financial Asset is measured at amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is
included in other income in the Statement of Profit and Loss. The losses arising from impairment are
recognised in the Statement of Profit and Loss. This category generally applies to trade and other
receivables.
All those financial assets that are not classified as measured at amortised cost or FVTOCI, are measured at
FVTPL. This includes all derivative financial assets and current investments in mutual funds. On initial
recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to
be measured at amortised cost or at FVTOCI, as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
Equity investments
All equity investments in the scope of Ind AS 109 are measured at fair value. Equity instruments which are
held for trading are measured at fair value through profit and loss.
For all other equity instruments, the Company may make an irrevocable election to present subsequent
changes in the fair value in other comprehensive income. The Company makes such election on an
instrument by instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in other comprehensive income. This cumulative gain or loss
is not reclassified to Statement of Profit and Loss on disposal of such instruments.
Investments representing equity interest in subsidiary and associate are carried at cost less any provision for
impairment.
Impairment of financial assets
The Company recognizes loss allowances for expected credit losses on:
- Financial assets measured at amortized cost; and
- Financial assets measured at FVTOCI - debt instruments.
Loss allowance for trade receivables is measured at an amount equal to lifetime ECL. For all financial assets
with contractual cash flows other than trade receivable, ECLs are measured at an amount equal to the 12-
month ECL, unless there has been a significant increase in credit risk from initial recognition in which case
those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss
allowance at the reporting date to the amount that is recognised as an impairment gain or loss in the
Statement of Profit and Loss.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Company considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Company's historical experience and informed credit assessment,
that includes forward-looking information.
At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt
securities at FVTOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that
have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence
that a financial asset is credit-impaired includes the following observable data:
• significant financial difficulty of the debtor;
• a breach of contract such as a default or being more than 180 days past due;
• it is probable that the debtor will enter bankruptcy or other financial reorganisation; or
• the disappearance of an active market for a security because of financial difficulties.
With regard to trade receivable, the Company has applied the simplified approach for initial recognition of
expected lifetime losses.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as
at FVTPL if it is classified as held-for- trading, or it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any
interest expense, are recognized in the Statement of Profit and Loss. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method. Interest expense and foreign
exchange gains and losses are recognised in the Statement of Profit and Loss. Any gain or loss on
derecognition is also recognised in the Statement of Profit and Loss.
Borrowings are subsequently measured at amortised cost. Any differences between the proceeds (net of
transaction costs) and the redemption/repayment amount is recognised in profit and loss over the period of
the borrowings using the effective interest rate method. Trade and other payables represent liabilities for
goods and services provided to the Company prior to the end of the financial year and which are unpaid.
Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the Balance Sheet only
when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle
them on a net basis or to realise the assets and settle the liabilities simultaneously.
Derecognition
(i) Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the
Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not
retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognised on its Balance Sheet, but
retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets
are not derecognised.
(ii) Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled,
or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows
under the modified terms are substantially different. In this case, a new financial liability based on the
modified terms is recognised at fair value. The difference between the carrying amount of the financial
liability extinguished and the new financial liability with modified terms is recognised in the Statement of Profit
and Loss.
r) Cash and cash equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts.
s) Research and development
Expenditure on research activities is recognized in the Statement of Profit and Loss as incurred.
Development expenditure is capitalized as part of cost of the resulting intangible asset only if the expenditure
can be measured reliably, the product or process is technically and commercially feasible, future economic
benefits are probable, and the Company intends to and has sufficient resources to complete development
and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial
recognition, the asset is measured at cost less accumulated amortisation and any accumulated impairment
losses, if any.
t) Dividend
The Company recognises a liability to make cash distributions to equity holders when the distribution is
authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in
India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is
recognised directly in equity.
u) Goods and services tax input credit
Goods and services tax input credit is recognised in the books of account in the period in which the supply of
goods or service received is recognised and when there is no uncertainty in availing/utilising the credits.
Expenses and assets are recognised net of the goods and services tax/value added taxes paid, except:
1. When the tax incurred on a purchase of assets or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset
or as part of the expense item, as applicable.
2. When receivables and payables are stated with the amount of tax included, the net amount of tax
recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the Balance Sheet.
v) Business Combinations under Common Control
The Company accounts for business combinations involving entities or businesses under common control in
accordance with Ind AS 103, Business Combinations. Such combinations are those in which all the
combining entities or businesses are ultimately controlled by the same party or parties both before and after
the transaction, and such control is not transitory.
These transactions are accounted for using the pooling of interests method. Under this method, the assets
and liabilities of the acquired entities or businesses are recognised at their existing carrying amounts as
appearing in the books of the transferor. No adjustments are made to reflect fair values, nor are any new
assets or liabilities recognised. Adjustments, if any, are made only to align accounting policies with those of
the Company.
The components of equity of the acquired entities or businesses are aggregated with the corresponding
components of the Company’s equity. Any difference between the consideration paid and the share capital of
the transferor is recognised in other equity.
The shares issued by the Company as consideration are recognised from the date the acquired entities or
businesses are included in the Company's financial statements. Further, the financial statements are
represented retrospectively as if the business combination had occurred from the beginning of the earliest
reporting period presented.
2B. Recent Accounting Pronouncements
The Ministry of Corporate Affairs (MCA) amended the Companies (Indian Accounting Standards) Rules,
2015, through notifications dated:
a) Amendments effective for periods beginning on or after 1 April 2025:
- 7 May 2025, introducing changes to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates,
effective from 1 April 2025. These amendments provide guidance on assessing whether a currency is
exchangeable into another currency and on estimating the spot exchange rate when a currency is not
exchangeable.
-13 August 2025, introducing changes to Ind AS including Ind AS 1- Presentation of Financial statements
which requires guidance on classification of liabilities as Current or Non-Current and Non-Current Liabilities
with Covenants, convertible debt as Current, etc, Ind AS 7- Statement of Cash Flows and Ind AS 107 -
Financial Instruments: Disclosures - Supplier Finance Arrangements which provides guidance on additional
disclosure requirements for Supplier Finance Arrangements, and Ind AS 112 - International Tax Reforms -
Pillar Two Model Rules. These amendments provides guidance on accounting for top-up tax, mandatory
relief of pillar two taxes from deferred tax accounting and additional disclosures requirements.
The Company has reviewed the new pronouncements and based on its evaluation has determined that it
does not have any significant impact in its financial statements.
b) Amendment issued but not effective - The Ministry of Corporate Affairs (MCA) amended the Companies
(Indian Accounting Standards) Rules, 2015, through the below notifications applicable from periods
beginning on or after 01 April 2026:
- 13 August 2025, introducing changes to Ind AS 1 Presentation of Financial statements introduces an
amendment related to Breach of covenant which is applicable w.e.f. 1 April 2026. The Company is in the
process of evaluating the impact of these amendments on the financial statements.
I. From Banks
i. Nil (March 31,2025: Rs.479.86 Lakhs) carrying interest linked to lender’s 1 year MCLR and spread thereon, was secured by first pari-passu
charge on all the immovable and movable properties of the Company excluding assets on exclusive charges.
ii. Nil (March 31,2025: Rs.531.43 lakhs) carrying interest of 8% p.a. repayable in 6 monthly installments, was secured by first pari-passu charge
by way of mortgage/hypothecation on all the Fixed Assets (Property, plant and equipment) of the Company, excluding assets on exclusive
iii. Rs.1,817.28 lakhs (March 31,2025: Nil) carrying interest linked to RBI Repo Rate and spread thereon, repayable in 20 quarterly instalments,
is secured by first pari-passu charge on fixed assets (Property, plant and equipment) of the Company.
iv. Rs.540.00 lakhs (March 31,2025: Rs.720.00 lakhs) carrying interest linked to lender’s 1 year MCLR and spread thereon, repayable in 12
quarterly instalments, is secured by first pari-passu charge on fixed assets of the Company.
v. Rs.2,042.86 lakhs (March 31,2025: Rs.2,567.86 lakhs) carrying interest linked to lender’s 1 year MCLR and spread thereon, repayable in 16
quarterly instalments, is secured by first pari-passu charge on fixed assets of the Company.
B. Unsecured
i. Rs.737.35 lakhs (March 31,2025: Rs.814.79 lakhs), Deposits from public, carries interest (payable as per deposit terms) between 9% p.a to
10% p.a., are currently repayable after 3 years from the date of acceptance of deposits.
C. The quarterly retums/statements filed by the Company with the banks are in agreement with the books of account of the Company.
D. Pursuant to the Composite Scheme of Arrangement, all loans and bank facilities relating to the demerged businesses have vested in and
have been assumed by DCM Shriram Fine Chemicals Limited and DCM Shriram International Limited, respectively, with effect from 1 April
2023, being the appointed date under the Scheme.
The Company is in the process of completing the necessary novation of the relevant loan and security documents and updating its name
therein. Pending completion of the requisite filings and formalities, the related charges continue to remain registered with the Registrar of
Companies in the name of the Company
1. The matter relates to the determination of the arm's length price in respect of transactions involving the sale of steam to intra-unit
segments, and the treatment of revenue recognized from the sale of Renewable Energy Certificates for Assessment Year 2018-19.
During the year ended March 31, 2026, the Income Tax Appellate Tribunal (ITAT), Delhi passed an order in favour of the Company. The
order giving effect from the Assessing Officer is awaited as at the reporting date. In view of the favourable ITAT order and based on
management's assessment, no contingent liability is required to be recognised or disclosed in respect of this matter.
2. This includes matter relating to Export Pass Fees levied on Denatured Spirits. Pursuant to the judgment dated October 23, 2024 of the
Hon’ble Supreme Court in an another matter, the Office of the Assistant Excise Commissioner, Meerut, has in July 2025, raised a
demand of Rs. 880.69 lakhs for the period from the financial year 2018-19 to July 11, 2025 towards Export Pass Fees levied on
Denatured Spirits. The U.P. Sugar Manufacturers’ Association (UPSMA) on behalf of its members has filed a writ petition challenging the
demand based on legal opinion that the State Government cannot levy or recover any duty for the past period under existing legislation.
The Hon'ble Allahabad High Court by an order dated July 30, 2025 has ordered to keep the State Government order in abeyance till the
matter is decided. In view of the above, the Company has not made any provision in the financial statements in this regard.
"Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in
respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
Matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not, in
the opinion of the management, have a material effect on the results of the operations or financial position.
B. Commitments
a. Capital commitments: Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
amount aggregating to Rs. 5.14 lakhs (March 31, 2025: Rs. 31.83 lakhs) lakhs relating to Property, plant and equipment.
b. Other commitments: The Company has other commitments, for purchase / sales orders which are issued after considering requirements
per operating cycle for purchase / sale of goods and services, employee benefits including union agreement in the normal course of
business. The Company does not have any long term commitments / contracts, including derivative contracts, with any material
foreseeable losses.
40. Earnings per share
Basic and diluted earnings per share
Basic and diluted earnings per share are calculated by dividing the profit during the year attributable to equity shareholders of the
Company, by the weighted number of equity shares outstanding during the year.
A. Defined contribution plans
Rs. 345.78 lakhs (March 31, 2025: 298.22 lakhs) for provident fund contributions and Rs. 69.78 lakhs (March 31, 2025: Rs. 90.09 lakhs) for superannuation and national
pension scheme fund contributions have been charged to the Statement of Profit and Loss. The contributions towards these schemes are at the rates specified in the
rules of the schemes.
B. Defined benefit plans
a) Liabilities for gratuity, privilege leaves and medical leaves are determined on actuarial basis. Gratuity liability is provided to the extent not covered by the funds available in
the gratuity fund.
Gratuity:
Gratuity scheme provides for a lump sum payment to vested employees at retirement, death, while in employment, or on termination of employment. Vesting occurs upon
completion of five years of service, except death while in employment.
C. Compensated absences:
The obligation of compensated absence in respect of the employees of the Company as at March 31, 2026 works out to Rs. 638.95 lakhs (March 31, 2025: Rs. 482.90
lakhs)
D. Risk exposure
These defined benefit plans typically expose the Company to actuarial risks as under
a) Investment Risk
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting
period on government bonds.
b) Interest rate risk
A decrease in bond interest rate will increase the plan liability. However, this shall be partially off-set by increase in return as per debt investments.
c) Longevity risk
The present value of the defined plan liability is calculated by reference to the best estimate of the mortality of plan participants. An increase in the life expectancy will
increase the plan's liability.
d) Salary risk
Higher than expected increase in salary will increase the defined benefit obligation.
E. On November 21, 2025 the Government of India notified four labour codes i.e. the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social
Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (“New Labour Code”) consolidating 29 existing labour laws. The Ministry of
Labour & Employment published Central Rules (including draft rules) and FAQs to enable assessment of financial impact due to these changes in regulations. Based on
information available and guidance provided by the Institute of Chartered Accountants of India, the Company has assessed impact of these changes and is of the view
that there is no material financial impact. It continues to monitor the developing regulatory scenario, including finalisation of Central / State Rules and clarifications from
the Government on other aspects of labour codes. The accounting effect of such developments, if any, shall be appropriately considered.
Note:
1 Transactions with the related parties are made on normal commercial terms and conditions and at market rates, to be settled in cash.
2 As per the approved Scheme of Arrangement, the Company has continued to manage the operations of the demerged units during the relevant period. Accordingly, inter se
transactions between the Company and the resultant companies relating to the operation of these units, including transfer of goods, assets, employees, funds, and
reimbursement of income and expenses etc. have been transferred to DSFCL and DSIL and same are not included above.
Further, pursuant to the Scheme’s approval, Lily has been amalgamated with the Company and stands dissolved. All transactions relating to Lily from the appointed date of
April 1, 2023 have been duly incorporated into the Company's financials. Accordingly, Shareholder level transactions, such as dividend distributions, have been disclosed
above where applicable.
A sum aggregating to Rs. 109.39 lakhs and Rs. 41.09 lakhs is payable as at March 31, 2026 (March 31, 2025: Rs. 374.03 lakhs and Rs. 459.16 lakhs receivable) to/from
DSFCL and DSIL respectively.
3 The above disclosures have been prepared based on allocations across the respective business segments, in alignment with the legal employment and governance
structure applicable during the relevant periods, and are presented as attributable to the respective businesses.
(III) Market risk
Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Company’s main interest rate
risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.
Exposure to interest rate risk
The Company’s interest rate risk arises mainly from the borrowings (including Cash Credit) from banks carrying floating rate of interest. These obligations expose the
Company to cash flow interest rate risk. The exposure of the Company’s borrowing to interest rate changes as reported to the management at the end of the
reporting period along with the interest rate profile are as follows:
44. Capital management
For the purposes of the Company’s capital management, capital includes issued equity share capital, securities premium and all other equity reserves attributable to
the equity holders of the Company. The primary objective of the management of the Company’s capital structure is to maintain an efficient mix of debt and equity in
order to achieve a low cost of capital. This also considers the desirable financial flexibility to pursue business opportunities and adequate access to liquidity to
mitigate the effect of unforeseen events on cash flows.
The Company manages its capital structure and makes adjustments to it in light of changes in the economic/ business conditions and requirements.
The Company also monitors its capital structure through gearing ratio, represented by debt-equity ratio (Net debt/Total equity). The gearing ratio for the Company as
at the end of reporting period is as follows:
49. Consequent to introduction of Goods and Services Tax (GST) with effect from July 1, 2017, there has been ambiguity with regard to chargeability of indirect tax, i.e., UP VAT or
GST or any other tax, on certain supplies made to a party and, therefore, no tax has been charged on invoices raised for such supplies. The Hon'ble Allahabad High Court in
the year 2021-22 has held that no VAT is chargeable on such transactions. However, this issue is sub-judice before the Hon'ble Supreme Court in a similar matter. The buyer
has provided an undertaking to indemnify the Company for any tax, along with interest, penalty (if levied) and any other related expenses, as may be finally determined in this
regard.
The State VAT Authorities had completed assessments for the periods July 1,2017 to October 31, 2020 and raised demands on the Company. These assessments have been
cancelled after the Hon’ble Allahabad High Court order and fresh assessment under GST have been completed. The Company has deposited amounts aggregating
Rs.3,417.52 lakhs under protest in respect of the aforesaid VAT matters for the periods July 1, 2017 to October 31, 2020 out of which, as per the Hon'ble Allahabad High Court
orders dated September 25, 2025 and consent given by the Company to refund the amount directly to the buyer, Rs. 1,317.52 lakh has been refunded upto March 31, 2026
and Rs.2,100.00 lakh has been refunded subsequently.
GST demands aggregating Rs. 40,855.83 lakhs (March 31, 2025: Rs.29,617.47 lakhs) have been raised in relation to these transactions from July 1, 2017 to September 30,
2022, including Rs.11,238.36 raised during the current year, which have been stayed by the Hon'ble Allahabad High Court and are being contested. The Company has
deposited amounts aggregating Rs.3,480.85 lakhs as of March 31, 2026 (Rs. 6,898.37 lakhs as at March 31, 2025) as duty under protest in respect of GST, shown as
'Government dues paid and recoverable' under 'Other non-current assets'.
Further, GST Council in its meeting dated October 7, 2023 has ceded the right to tax such supplies to State Governments. However, State Government is still to notify any rules
in this regard.
Pending necessary amendments / notifications in this regard, the Company has continued the same accounting treatment in respect of the transactions as in previous year(s)
and the Company has recognized a provision for contingencies of Rs. 37,110.69 lakhs as at March 31, 2026 (Rs. 33,843.88 lakhs as at March 31,2025) under "Provisions
(current)". Basis the undertaking from the buyer, the Company has recognized corresponding reimbursement assets amounting to Rs. 37,110.69 lakhs as at March 31, 2026
(Rs. 33,843.88 lakhs as at March 31,2025} under "Other financial assets (current)". The GST amount aggregating Rs. 3,480.85 lakhs as at March 31,2026 (Rs.6,898.37 lakhs
as at March 31, 2025) paid under protest have been shown as recoverable under "Other non-current assets" with corresponding amount shown as payable to the buyer under
"Other non-current financial liabilities"
54 As per the Scheme of Arrangement approved by Hon’ble NCLT, New Delhi Bench by order dated November 21, 2025, Lily Commercial Private Limited (Lily)
was amalgamated with the Company. 43,588,680 equity shares of Rs.2 each held by Lily in the Company were extinguished and identical number of shares
were allotted to the shareholders of Lily in proportion to their shareholders in the amalgamated company as on the record date i.e. December 05, 2025.
55 In accordance with Ind AS 108 'Segment Reporting' as specified in section 133 of the Companies Act, 2013 , the Company has identified a single reportable
business segment viz. 'Comprising Sugar, power and alcohol1. The segment have been identified and reported taking into account the differing risks and
returns, and the current internal financial reporting systems. For the segment, the Chief Operating Decision Maker (CODM) reviews internal management
reports on at least a quarterly basis. The CODM monitors the operating results for the purpose of making decisions about resource allocation and performance
measurement (Refer Note 2A(p)).
(iii) There are no non-current assets located outside India.
(iv) There is no major customer with whom revenue exceeds more than 10% of the Company's revenue.
56 The Board of Directors have recommended a final dividend of Rs.0.40 per share on equity shares of Rs.2 each for the year ended 31 March 2026, subject to
approval of shareholders at the ensuing annual general meeting and has not been included as a liability in these financial statements. The total expected
amount of cash outflow is Rs.347.97 lakhs.
57 Additional regulatory information:
i) The Company does not have any benami property, and no proceeding has been initiated against the Company for holding any benami property.
ii) The Company does not have any transactions with struck off companies.
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period. Also refer note 20D.
iv) The Company has not traded or invested in crypto currency or any virtual currency during the financial year.
v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the
understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries)
b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether
recorded in writing or otherwise) that the Company shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiarie
b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
vii) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the
year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
viii) The Company has not been declared as a willful defaulter by any banks or any other financial institution at any time during the financial year or after the end
of the reporting period but before the date when the financial statements are approved by the Board of Directors.
ix) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India and the Group (as per the
provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC.
x) The Company has no subsidiary or holding company and thus compliance with the number of layers prescribed under clause (87) of Section 2 of the Act is not
applicable
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