Dalmia Bharat Sugar & Industries has provided comprehensive guidance to shareholders regarding the apportionment of cost of acquisition following the completion of its demerger scheme with Dalmia Bharat Refractories Limited (DBRL). The company issued detailed instructions on December 18 for calculating post-demerger shareholding costs.

Demerger Scheme Details

The demerger scheme between the company and DBRL became effective on October 9, following approval from the National Company Law Tribunal, Chennai Bench on September 12. The scheme involves the transfer of Dalmia Magnesite Corporation and Govan Travels as demerged undertakings to DBRL.

Cost Apportionment Framework

The company has provided specific guidance on how shareholders should apportion their pre-demerger cost of acquisition between the two entities, in accordance with Income Tax Act provisions.

Practical Calculation Example

The company provided a detailed example to illustrate the cost apportionment mechanism for shareholders:

Regulatory Compliance

The cost apportionment follows Section 49(2C) and 49(2D) of the Income Tax Act, 1961, which govern the treatment of shares in demerger transactions. The allocation is based on the net book value of assets transferred relative to the company's net worth as of June 30, 2023.

Important Shareholder Notice

The company emphasized that this information should be preserved carefully as it will be relevant for calculating taxable capital gains on future share transfers. However, the company clarified that this communication serves as general guidance and should not substitute independent professional advice.

Shareholders eligible for the demerger benefits were determined based on the record date of October 31, with names appearing in the register of members or beneficial owners maintained by registrar and transfer agents.

In a significant legal victory for Dalmia Bharat Sugar & Industries , the Madras High Court has dismissed a substantial compensation claim worth ₹120 crore against the company. The court's ruling, which favors Dalmia Bharat Sugar & Industries, puts an end to a long-standing dispute over surface rights related to mining leases.

Details of the Court Ruling

According to a disclosure filed by Dalmia Bharat Sugar & Industries to the stock exchanges, the Madras High Court pronounced its judgment on September 10. The court's decision, received by the company on September 30, granted relief from annual compensation for surface rights in respect of mining leases. The ruling specifically addressed two significant demands:

1. A demand of ₹79.00 crore for the period from 1966 to 2017 has been quashed.
2. An additional demand of ₹41.00 crore for the period from 2017 to 2024 has also been quashed.

Background of the Case

The litigation was related to demands for annual compensation for surface rights concerning mining leases dating back to 1966. This case had been pending before the Madras High Court and was considered a material event by the company.

Implications for Dalmia Bharat Sugar & Industries

The court's decision to quash the entire ₹120.00 crore claim is a substantial relief for Dalmia Bharat Sugar & Industries. This ruling eliminates a significant potential financial liability that had been hanging over the company for years.

Company's Response

Rachna Goria, Company Secretary and Compliance Officer of Dalmia Bharat Sugar & Industries, confirmed the court's decision in a filing to the stock exchanges. The company made this disclosure in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This favorable court ruling is expected to have a positive impact on Dalmia Bharat Sugar & Industries' financial position by removing a substantial contingent liability. Investors and stakeholders will likely view this development as a positive sign for the company's future operations and financial stability.