Notes to Accounts of Gayatri Sugars Ltd.

Mar 31, 2025

1.19 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when
there is a present obligation as a result of past events and it is probable that there will be an
outflow of resources to settle the obligation in respect of which reliable estimate can be
made as on the balance sheet date. The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at the end of the
reporting period, taking into account the risks and uncertainties surrounding the obligation.
When a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows (when the effect of the time
value of money is material).

Contingent Liabilities are present obligations arising from a past event, when it is not
probable / probability is remote that an outflow of resources will be required to settle the
obligation and they are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements except
where it has become virtually certain that an inflow of economic benefit will arise, the
asset and the related income are recognized in financial statements of the period in which
the change occurs Provisions for Contingent Liabilities and Contingent Assets are reviewed
at the end of Balance Sheet date.

1.20 Operating cycle

Based on the nature of products / activities of the Company and the normal time between
acquisition of assets and their realisation in cash or cash equivalents, the Company has
determined its operating cycle as 12 months for the purpose of classification of its assets
and liabilities as current and non-current.

1.21 Exceptional items

Items of income and expenditure within profit and loss from ordinary activities are of such
size, nature or incidence that their disclosure is relevant to explain the performance of the
enterprise for the period, the nature and amount of such items are disclosed separately as
Exceptional Items.

1.22 Commitments

(a) Commitments are future liabilities for contractual expenditure.

(b) Commitments are classified and disclosed as follows:

• Estimated amount of contracts remaining to be executed on capital account and
not provided for;

• Uncalled liability on shares and other investments partly paid;

• Funding related commitment to subsidiary, associate and joint venture companies
and

• Other non-cancellable commitments, if any, to the extent they are considered
material and relevant in the opinion of management.

(c) Other commitments related to sales/procurements made in the normal course of
business are not disclosed to avoid excessive details.

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Mar 31, 2024

1.19 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation in respect of which reliable estimate can be made as on the balance sheet date. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

Contingent Liabilities are present obligations arising from a past event, when it is not probable / probability is remote that an outflow of resources will be required to settle the obligation and they are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements except where it has become virtually certain that an inflow of economic benefit will arise, the asset and the related income are recognized in financial statements of the period in which the change occurs Provisions for Contingent Liabilities and Contingent Assets are reviewed at the end of Balance Sheet date.

1.20 Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

1.21 Exceptional items

Items of income and expenditure within profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items are disclosed separately as Exceptional Items.

1.22 Commitments

(a) Commitments are future liabilities for contractual expenditure.

(b) Commitments are classified and disclosed as follows:

• Estimated amount of contracts remaining to be executed on capital account and not provided for;

• Uncalled liability on shares and other investments partly paid;

• Funding related commitment to subsidiary, associate andjoint venture companies and

• Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management.

(c) Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details.

a. Share application money pending allotment

This contains Share application money received, pending for allotment to the extent nonrefundable is shown under other Equity.

b Equity Component of Compounded Financial Instrument

This contains the equity portion of the 6% Optionally convertible preference shares.

c. Securities Premium Account

Securities premium is used to record the premium received on the issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

d. Retained Earnings

Retained Earnings are the profits/ (Losses) that the Company has earned till date, less any transfer to general reserve, dividends or other distributions paid to shareholders.

e. Re-measurement gains/(losses) on defined benefits

The Company recognises remeasurement gain / (loss) on defined benefit plans in Other Comprehensive Income. These changes are accumulated within the equity under "Remeasurement gain / (loss) on defined benefit plans" reserve within equity.

f. Money Received against Share Warrants

Represents amounts received towards subscription of compulsorily convertible warrants

11.1 Working Capital Term Loan and Demand loan:

A Primary Security

First and Exclusive charge on entire Current Assets and un-encumbered Fixed Aseets both present and future.

First Charge on immovable properties and Fixed assets of Sugar Unit and Distillery Unit at Kamareddy.

Second Charge on immovable properties and Fixed assets of Sugar Unit at Nizamsagar.

Extension of Charge on current rentals and future rentals of received/receivable by Gayatri Hotels & Theatres Pvt Ltd (i.e. Company in which KMP / Relatives of KMP are interested).

B Collateral Security

1 158.10 Acres Land along with structures owned by Gayatri Sugars Ltd, Kamareddy Unit, located at Adloor Yellareddy Village, Sadasiva Nagar Mandal, Kamareddy District,

2 Second charge on 86.90 Acres Land along with several structures owned by Gayatri Sugars Ltd, Nizamsagar Unit, located at Maagi Village, Gorgal Village and Waddepally village, Nizamsagar Mandal, Kamareddy District,

3 Mortgage of Agricultural Land owned by Gayatri Sugars Ltd admeasuring Ac 3.00 Gts situated at Sy No.161/A Tekriyal Village, Kamareddy Mandal, Kamareddy District on pari-passu basis

4 Mortgage of Agricultural Land owned by Gayatri Sugars Ltd admeasuring Ac 0.10 Gts situated at Sy No.98/A Tekriyal Village, Kamareddy Mandal, Kamareddy District on pari-passu basis

5 Mall & Multiplex Maheshwari Parameshwari situated at Kachiguda Chowrasta, Sultan Bazar, owned by Gayatri Hotels & Theatres Pvt Ltd and Mrs. Aparna Reddy.

6 Pledge of 79 lacs of shares of M/s Gayatri Sugars Ltd belonging to Smt. T. Indira Subbarami Reddy and Sri T. V. Sandeep Kumar Reddy

C Rate of interest

The rate of Interest is K-MCLR 6M, presently 9.20% 4.80%i.e 14%

D Gurantees

1 Personal guarantee of Shri T.V. Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy and Smt. T. Sarita Reddy; Directors of the Company.

2 Corporate guarantee of M/s. Gayatri Fin-Holdings Private Limited, M/s TSR Holdings Private Limited and M/s. Gayatri Hotels and Theaters Private Limited

11.2 Term Loan from Sugar Development Fund (SDF)

A Primary Security

First charge on movable and immovable fixed assets of sugar unit situated at Maagi Village, Nizamsagar Mandal, Kamareddy District, Telangana.

B Terms of Repayment

i The SDF term loan was restructured on 20.05.2022 by capitalising the accrued outstanding interest due of Rs. 1,654.15 Lakhs to the principal amount of the term loan.

ii The restrustured SDF Term Loan carries a moratorium period of 24 Months from the date of restructuring. During the Moratorium period interest shall continue to accrue.

iii Post the Moratorium period, the SDF term Loan including accrued simple interest till 20.06.2024 shall be paid in 60 Equal Monthly Instalments.

iv The restructed SDF Term Loan Carries a interest rate of 4.65% Per Annum.

v Refer note no. 28.14.

11.2 Rights, preferences and restrictions attached to preference shares - Refer note no. 9A(ii)

11.3 Unsecured Loan - From Related Parties

a The loan from related parties carries an interest rate of 9.5%. The interest is payable on or before 01.04.2027 along with principle amount. Further, the lender has an option to convert the said loan in full or part into Equity or Preferential shares at any time during the tenure of the loan. As at 31.03.2024 the lenders has not exercised the option to convert the loan.

b The loan from Gayatri Estates (Enterprises where KMP/Relative of KMP are interested) carries an interest rate of 9.5% and the interest is payable on or before 01.04.2027 along with principle amount.

11.4 Unsecured Loan - From Others

The Lender, has an option to convert the loan in full or partly into Equity or Preference shares of the company at any time

during the tenure of term loan which is 01.04.2027 and rate of interest is 9.5%. The interest is payable on or before

01.04.2027 along with principal amount. As at 31.03.2024 the said lender has not exercised the option to convert the loan.

11.5 Maturity Profile of borrowings including current maturities and interest is as below :

28.4 Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The Company''s capital management is intended to maximise the return to shareholders for meeting the long-term and short-term goals of the Company through the optimization of the debt and equity balance. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or adjust the dividend payment to shareholders (if permitted). Consistent with other entities in the industry, the Company monitors its capital using the gearing ratio which is net debt divided by total equity.

Financial risk management objectives and policies

The Company''s activities expose it to a variety of financial risks like market risk, credit risk and liquidity risks. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

(i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk, includes loans and borrowings.

b. Foreign Currency Risk

Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee. There is no Foreign Currency Risk as the Company doesn''t have exposure in currencies other than Indian Rupee.

c. Equity Price Risks:

Since the Company has not invested in equity investments, the changes of equity securities price would not have a effect on the profit or loss of the Company.

(ii) Comodity Price Risk

Commodity price risk arises due to fluctuation in prices of Sugar Cane, other raw material and products. Cost of Sugar cane is depend on Government policy on fixation of Fair and Remunerative Price (FRP) which is the major cost of production. The company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The company''s commodity risk is managed centrally through well-established trading policies and control processes.

(iii) Credit Risk Management

Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities.

The maximum exposure of the assets is contributed by trade receivables, cash and cash equivalents and other bank balances. Credit risk on trade receivables is limited as the customers of the Company mainly consist of the amount to be received from state government entities with respective sale of sugar and power. The company takes into account ageing of accounts receivables and the company''s historical experience of the customers and financial conditions of the customers.

(iv) Liquidity Risk:

The company has issued 3,38,00,000 Share Warrants on preferential basis having face value of Rs. 10/-, the amount raised from such allotment shall help the company in its working capital needs. Further, the fact the Sugar Development Fund Term Loan is restructured and only certain provisional aspects are pending thereon. The management of the company is of the view that these factors compiled with the fact that the company has made profit during the year will help the company to improve its future financial position and accordingly the company doesnt forsee any liquidity risks thereon.

Note: In absence reasonable certainty that sufficient future taxable income will be available against which such Deferred Tax Assets, the Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the tax base of assets as per books and as per Income Tax.

28.13 There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

28.14 During the previous years, the company had defaulted in repayment of the Sugar Development Fund (SDF) loan. Pursuant to the said default, SDF through its monitoring Institution i.e., IFCI Limited had filed a petition before the Debt Recovery Tribunal (DRT) for recovery of its dues. Subsequently, the Company made an application to the Ministry of Consumer Affairs, Food and Public Distribution (Ministry), Government of India (GOI) for restructuring of the SDF loan as per the operational guidelines issued by the GOI. The Company''s application was accepted by the Committee for rehabilitation and recommended to GOI for Administrative Approval (AA) for restructuring of the SDF loan. The GOI issued AA approval on 20.05.2022 which is valid till 30/04/2024, with terms of waiver of penal interest and capitalise the regular interest with principal amount, Rate of Interest @4.65% p.a, moratorium period of 24 months and loan repayable in 60 EMIs. The Company complied with all the terms and conditions of AA and executed loan documents i.e., Tripartite Agreement, Escrow Agreement, Hypothecation Deed and Memorandum of Deposit of Title Deeds (MODT) and registration of MODT in the office of the Sub Registrar of Assurances. The company is confident of registering the MODT before the expiry of the AA granted. In view of the above the company is very much confident that the petition filed by IFCI Ltd before the Debt Recovery Tribunal (DRT) will be withdrawn/disposed.

28.15 (A) During the Financial Year 2023-24, The Company has taken approval for Increase in Authorised

Share Capital of the Company from Rs. 110,00,00,000/- divided into Rs.65,00,00,000/- ( Rupees Sixty Five Crores Only) divided into 6,50,00,000 (Six crores fifty lakhs ) equity shares of Rs.10/- each and Rs. 45,00,00,000/- (Rupees Forty Five Crores Only) divided into 4,50,00,000 (Four Crores Fifty Lakhs) Preference Shares of Rs.10/- each to Rs. 145,00,00,000/- (Rupees One Hundred and Forty Five Crores Only) divided into Rs.100,00,00,000/- (Rupees One Hundred Crores Only) divided into Rs.10,00,00,000/- (Ten Crores) equity shares of Rs.10/- each, and Rs.45,00,00,000/- (Rupees Forty Five Crores Only) divided into 4,50,00,000 (Four Crores Fifty Lakhs) preference shares of Rs.10/-each. The Company has initiated the process of raising funds of Rs.4150.00 lakhs by way of issue of Equity Warrants on preferential basis to arrange the working capital requirement of the Company and general corporate purpose and against such offer the Company had got subscription of 3,38,00,000 share warrants. Against such subscribed share warrants the Company had received amount of Rs.2.50 per share warrant amounting of Rs.845.00 lakhs. Further, the Company has received full subscription amount for 1,00,96,662 shares, amounting to Rs. 1009.67 lakhs and the balance amount shall be received in the due course as per the terms of the share warrants. Further, During the current year the Company had also converted the 1,10,00,000- 6% Optionally convertible preference shares in to same number of equity shares of Rs.10/- each to the promoter group.

(B) During the Financial Year 2023-24, the Company earned a net profit of Rs.703.94 lakhs and further, the Company has raised fund by issue of share warrants and allotment of equity shares against the

share warrants on receipt full subscription amount as stated in note 28.15 (A) above. Further The Company yet to receive the balance subscription amount against pending allotment share warrants and the Company has significantly reduced the working capital exposure. Further based on approvals received from the lenders of the unsecured loans and 6% Optionally convertible preference shares holders, the Company has written off interest accrued during the year on unsecured loans amounting to Rs.187.79 lakhs and has written off preference dividend of Rs.175.48 lakhs. The Management of the Company is of the view that these factors along with the fact that the Company has made a profit during the year will help the Company to improve its future financial position.

28.16 "The Hon''ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh dismissed the Company''s writ petition (along with the other petitions on the same matter filed by other companies) vide its common order dated May 19, 2016 (''the Order'') in which it upheld the validity of levy of Electricity Duty @ 25 paisa per unit by the State Government on consumption of electricity by captive generating units relating to earlier years. In the year 2016-17, the Company filed a Special Leave Petition (SLP) in the Hon''ble Supreme Court which dismissed the SLP vide order dated September 27, 2016 on the grounds that these matters were pending before the Board for Industrial and Financial Reconstruction (BIFR), and unless payments were being made by the petitioners as directed in its interim orders @ 15 paisa per unit. The Hon''ble Supreme Court also granted liberty to the petitioners to revive the petitions after the decision is given by the BIFR. Currently, the case filed before BIFR stands abated and the Company has not initiated any proceedings before the NCLT.

The management is of the view that as the case filed before BIFR stands abated and no demand notices were received thereafter for the payment, the Company has treated the estimated duty amount aggregating Rs. 283.99 lakhs as a Contingent Liability and no provision has been made in respect of the same. In the event of an unfavourable verdict/outcome in this matter, the Management based on the Supreme Court''s interim orders and considering the inherent uncertainty in predicting the final outcome of the above litigation estimates the impact of the potential liability to be Rs. 170 lakhs.

In view of the above, the auditors have made a Qualified Opinion in their Audit Report about their inability to comment on the ultimate outcome of this matter and the consequential impact, if any, on these financial statements.

Note for Variance in ratios

1 Current ratio: Due to decrease in Trade Payables

2 Debt Equity Ratio: Due to increase in Equity and Decrease in borrowings

3 Debt Service Coverage Ratio: DSCR has decreased due to lower earnings before interest and Tax.

4 Return on Equity Ratio: Due to increase in share capital

5 Trade receivables turnover ratio: Due to decrease in Turnover

6 Net Capital Turnover Ratio: Due to decrease in current liabilities and also due to decrease in curret assets

7 Net Profit Ratio: Due to decrease in turnover.

28.18 The managerial remuneration paid to Managing Director fr the financial year 2023-2024 of '' 60 lakhs was approved by the Share holders at the Annual General Meeting held on 27/09/2023 as per requirement of Section 197 read with schedule V of the Companies Act, 2013.

28.19 Additional Regulatory Information as required by Schedule III of the Companies Act, 2013:

a No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

b No charges are pending for registration with Registrar of Companies (ROC) beyond the statutory period.

c During the current financial year, to the best knowledge of the company, it didn''t have any relationship with

Struck-off Companies.

d The Company has not traded or invested in Crypto Currency or Virtual Currency during the current or previous year.

e The Company is not been declared as a Wilful Defaulter by any Bank, Financial Institution or other lenders.

f There is no income surrendered or disclosed as income during the current or previous year in the tax assessments

under the Income Tax Act, 1961, that has not been recorded in the books of account.

g The Company has not entered into any Scheme of Arrangement in terms of sections 230 to 237 of the Companies Act, 2013. Hence there will be no accounting impact on the current or previous financial year.

h During the year the Company has raised funds through private placement of Equity Share Warrants.

i (A) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including

foreign entities (Intermediaries) with the understanding that the Intermediary shall: -

a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by on or behalf of the company (Ultimate Beneficiaries) or

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

(ii)(B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the 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 company (Ultimate Beneficiaries), or

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

j The Company has not revalued its property, plant, and equipment during the current or previous year.

k The provisions of Corporate Social Responsibility Under Section 135 of Companies Act 2013 are not applicable

to the Company.

l The Company does not have any Immovable Properties where title deeds are not held in the name of the

Company.

m The Company has not made any investment and do not have subsidiaries, therefore clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017, is not applicable.

28.20 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.

28.21 Previous years figures have been regrouped / reclassified wherever considered necessary to correspond with the current year classification/ disclosures.

28.22 The financial statements were approved for issue by the Board of Directors on 25.04.2024s

As per our report attached

For M O S & Associates LLP For and on behalf of the Board of Directors

Chartered Accountants

Sd/- Sd/- Sd/-

Oommen Mani T. Sarita Reddy T.V. Sandeep Kumar Reddy

Partner Managing Director Vice Chairman & Director

Membership No. 234119 DIN No : 00017122 DIN No : 00005573

Sd/- Sd/-

Place : Hyderabad V.R. Prasad D.S.V.R. Susmitha

Date : 25th April, 2024 Chief Financial Officer Company Secretary

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Mar 31, 2023

1.19 Provisions and Contingencies

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation in respect of which reliable estimate can be made as on the balance sheet date. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

Contingent Liabilities are present obligations arising from a past event, when it is not probable / probability is remote that an outflow of resources will be required to settle the obligation and they are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements except where it has become virtually certain that an inflow of economic benefit will arise, the asset and the related income are recognized in financial statements of the period in which the change occurs Provisions for Contingent Liabilities and Contingent Assets are reviewed at the end of Balance Sheet date.

1.20 Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

1.21 Exceptional items

Items of income and expenditure within profit and loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items are disclosed separately as Exceptional Items.

1.22 Commitments

(a) Commitments are future liabilities for contractual expenditure.

(b) Commitments are classified and disclosed as follows:

• Estimated amount of contracts remaining to be executed on capital account and not provided for;

• Uncalled liability on shares and other investments partly paid;

• Funding related commitment to subsidiary, associate and joint venture companies and

• Other non-cancel lable commitments, if any, to the extent they are considered material and relevant in the opinion of management.

(c) Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details.

(ii) Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of '' 1 0 each. Each equity shareholder is entitled to one vote per share held. 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 number of equity shares held by the shareholders.

(ii) Rights, preferences and restrictions attached to Preference share capital:

The Company has only one class of 6% Optionally Convertable Redeemable Preference Shares having a par value

of Rs. 10 per share issued on 7th March 2023 by way of change in nomenclature of 6% Cumulative Redeemable

Preference Shares and waiver of accumulated preference dividend till 31.03.2023. Each holder of preference shares

is entitled to one vote per share.

(a) Terms of 2,50,00,000 - 6% Optionally Convertable Redeemable Preference Shares of Rs.10/- each.

(i) Period of redemption extended from 1 7th Nov, 2023 to 1st April, 2025

(b) 49,00,000 - 6% Optionally Convertable Redeemable Preference Shares of Rs.10/- each which are due for redemption on 1st April, 2025

(c) 95,36,813 - 6% Optionally Convertable Redeemable Preference Shares of Rs.10/- each which are due for redemption on 1st April, 2029.

(d) 17,10,210 - 6% Optionally Convertable Redeemable Preference Shares of Rs.10/- each which are due for redemption on 1st April, 2025.

(e) The Board of Directors of the company vide their meeting on 1st May 2023 based on the request of Holders of 6% Optionally Convertable Redemable Preference Shares i.e., T.S.R Holdings Private Limited and Gayatri Fin-Holdings Private Limited have approved the conversion of Preference Shares to Equity Shares and the same is subject to the Statutory Approvals.

a. Securities Premium Account

Securities premium is used to record the premium received on the issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 201 3.

b. Retained Earnings

Retained Earnings are the profits/ (Losses) that the Company has earned till date, less any transfer to general reserve, dividends or other distributions paid to shareholders.

c. Equity Component of Compounded Financial Instrument

This contains the equity portion of the 6% Optionally convertible preference shares.

d. Re-measurement gains/(losses) on defined benefits

The Company recognises remeasurement gain / (loss) on defined benefit plans in Other Comprehensive Income. These changes are accumulated within the equity under "Remeasurement gain / (loss) on defined benefit plans" reserve within equity.

11.1 Term Loan from Sugar Development Fund (SDF)

A Primary Security

First charge on movable and immovable fixed assets of sugar unit situated at Maagi Village ,Nizamsagar Mandal,Kamareddy District, Telangana.

B Terms of Repayment

i The SDF term loan was restructured on 20.05.2022 by capitalising the accrued outstanding interest due of Rs. 1,654.15 Lakhs to the principal amount of the term loan.

ii The restrustured SDF Term Loan carries a moratorium period of 24 Months from the date of restructuring. During the Moratorium period interest shall continue to accrue.

iii Post the Moratorium period, the SDF term Loan including accrued simple interest till 20.06.2024 shall be paid in 60 Equal Monthly Instalments.

iv The restructed SDF Term Loan Carries a interest rate of 4.65% Per Annum.

v Accrued additional interest upto 20.05.2022 of Rs. 938.23 Lakhs is waived off pursuant to the restructuring of the SDF Term Loan.

vi Refer note no. 27.14 for details of restructuring.

11.2 Rights, preferences and restrictions attached to preference shares - Refer note no. 9A(ii)

11.3 Unsecured Loan - From Related Parties

The loan from related parties carries an interest rate of 9.5% and shall be repaid by 31.03.2025. Further, the lender has an option to convert the said loan in full or part into Equity or Preferential shares at any time during the tenure of the loan. As at 31.03.2023 the lenders has not exercised the option to convert the loan.

11.4 Unsecured Loan - From Others

The Lender, has an option to convert the loan in full or partly into Equity or Preference shares of the company at any time during the tenure of term loan which is 31.03.2025 and rate of interest is 9.5%. The interest is payable on or before 31.03.2025 along with principal amount. As at 31.03.2023 the said lender has not exercised the option to convert the loan.

A Details of security for the Loan payable on Demand from Banks:

(i) Primary Security: Pari-passu first charge on all chargeable current assets of the Company (viz.)

sugar, molasses,ethanol, impured spirit, bagasse, stores and spares and receivables of the company.

(ii) Collateral Security:

a) Pari-passu first charge on the Company''s present and future fixed assets and immovable properties of sugar unit and distillery unit situated at Adloor Yellareddy Village, Sadashivnagar Mandal, Kamareddy District .

(b) Pari-parsu second charge on the Company''s present and future fixed assets and immovable properties of sugar unit situated at Maagi Village, Nizamsagar Mandal, Kamareddy District,Telangana.

(c) First pari-passu charge on pledge of 79 lakh shares of Gayatri Sugars Limited belonging to Smt. T. Indira Subbarami Reddy and Sri T.V. Sandeep Kumar Reddy, on pari-passu basis with other members of the consortium lenders.

b. Foreign Currency Risk

Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee. There is no Foreign Currency Risk as the Company doesn''t have exposure in currencies other than Indian Rupee.

c. Equity Price Risks:

Since the Company has not invested in equity investments, the changes of equity securities price would not have a effect on the profit or loss of the Company.

(ii) Comodity Price Risk

Commodity price risk arises due to fluctuation in prices of Sugar Cane, other raw material and products. Cost of Sugar cane is depend on Government policy on fixation of Fair and Remunerative Price (FRP) which is the major cost of production. The company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The company''s commodity risk is managed centrally through well-established trading policies and control processes.

(iii) Credit Risk Management

Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities.

The maximum exposure of the assets is contributed by trade receivables, cash and cash equivalents and other bank balances. Credit risk on trade receivables is limited as the customers of the Company mainly consist of the amount to be received from state government entities with respective sale of sugar and power. The company takes into account ageing of accounts receivables and the company''s historical experience of the customers and financial conditions of the customers.

The Company basis their assessment believes that the probability of the occurrence of their forecasted transactions is not impacted by COVID-19 pandemic. The Company has also considered the effect of changes, if any, in both counterparty credit risk and own credit risk.

(iv) Liquidity Risk:

company has initiated the process for preferential share allotment for a sum of Rs. 4,1 50.00 Lakhs, the amount raised from such allotment shall help the company in its working capital needs. Further, the fact the Sugar Development Fund Term Loan is restructured and only certain provisional aspects are pending thereon. The management of the company is of the view that these factors compiled with the fact that the company has made profit during the year will help the company to improve its future financial position and accordingly the company doesnt forsee any liquidity risks thereon.

27.13 There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

27.14 During the previous years, the company had defaulted in repayment of the Sugar Development Fund (SDF) loan. Pursuant to the said default, SDF through its monitoring Institution i.e., IFCI Limited had filed a petition before the Debt Recovery Tribunal (DRT) for recovery of its dues. Subsequently, based on various representations made by the company and the entire sugar industry to the Government of India for restructuring of the SDF loan, the Ministry of Consumer Affairs, Food, and Public Distribution brought out operational guidelines on 03.01.2022 for restructuring loans taken from the Sugar Development Fund under rule 26. Pursuant to said guidelines, the company had applied for restructuring of its SDF loan on 3rd March 2022. According to the terms of restructuring, the company has to withdraw its Interlocutory Application filed before Hon''ble Debt Recovery Tribunal-1, Hyderabad, and accordingly, the company had withdrawn the same on 22nd March 2022. The Committee for Rehabilitation (CRF) scrutinised the company''s application for restructuring the SDF loan in the meeting dated 28th March 2022 and recommended for consideration of restructuring the SDF loan by the Standing Committee. The Standing Committee in its meeting dated 22nd April 2022 considered the recommendations by CRF and recommended for Administrative Approval (AA) from the Ministry of Consumer Affairs, Food, and Public Distribution, for restructuring of the SDF loan and waiver of additional interest in full in respect of SDF loans. The Central Government has granted Administrative Approval (AA) on 20th May 2022 and the company had entered into Tripartite Agreement (TPA) for the Restructuring of the SDF Loan with GOI and the nodal agency (IFCI) on 18th August 2022. Further, the company has executed security documents i.e deed of hypothecation, escrow agreement and memorandum of deposit of title deeds and also opened an escrow account for synchronising interest and principal payable for restructuring of SDF Loan and filed a modification of charge with Registrar of Companies ("RoC") and a certificate for registration for modification of charge dated 02.02.2023 was issued by ROC. As per the said restructuring, the entire additional interest due on the loan shall be waived in full and the balance interest shall be capitalised along with the principal. Further, there shall be a moratorium period of 24 months and during the moratorium period, simple interest @4.65% p.a shall be accrued. The entire loan including the accrued interest during the moratorium period is to be paid in 60 equal monthly installments commencing from 20.06.2024. In view of the above, the company has recognised the impact of the restructuring i.e., capitalised the accrued interest of ''1 654.1 5 lakhs with the principal amount of '' 1991.60 lakhs and waiver of additional/penal interest of '' 938.24 lakhs in the audited financial statements for the year ended 31st March 2023. Further, The Company is of the opinion that as it has complied with all the requirements per the Tripartite Agreement. The petition filed by the SDF through its Monitoring agency IFCI before DRT will be withdrawn in due course.

27.15 During the Financial Year 2022-23, the company earned a net profit of '' 846.58 Lakhs before exceptional items and a profit of '' 3,432.08 Lakhs. Further, the Company has initiated the process of raising funds of '' 4,1 50.00 Lakhs by way of issue of equity warrants on a preferential basis, to arrange the working capital

requirements of the company and general corporate purpose, this will enable the company to have better cash flows and the Board of Directors of the company vide their meeting on 1st May 2023 based on the request of Holders of 6% Optionally Convertable Redemable Preference Shares i.e., T.S.R Holdings Private Limited and Gayatri Fin-Holdings Private Limited have approved the conversion of Preference Shares to Equity Shares and the same is subject to the Statutory Approvals. The management of the company is of the view that these factors along with the fact that the company has made a profit during the year will help the company to improve its future financial position.

27.16 The Hon''ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh dismissed the Company''s writ petition (along with the other petitions on the same matter filed by other companies) vide its common order dated May 19, 201 6 (''the Order'') in which it upheld the validity of levy of Electricity Duty @ 25 paisa per unit by the State Government on consumption of electricity by captive generating units relating to earlier years. In the year 2016-17, the Company filed a Special Leave Petition (SLP) in the Hon''ble Supreme Court which dismissed the SLP vide order dated September 27, 201 6 on the grounds that these matters were pending before the Board for Industrial and Financial Reconstruction (BIFR), and unless payments were being made by the petitioners as directed in its interim orders @ 15 paisa per unit. The Hon''ble Supreme Court also granted liberty to the petitioners to revive the petitions after the decision is given by the BIFR. Currently, the case filed before BIFR stands abated and the Company has not initiated any proceedings before the NCLT.

The management is of the view that as the case filed before BIFR stands abated and no demand notices were received thereafter for the payment, the Company has treated the estimated duty amount aggregating '' 283.99 lakhs as a Contingent Liability and no provision has been made in respect of the same. In the event of an unfavourable verdict/outcome in this matter, the Management based on the Supreme Court''s interim orders and considering the inherent uncertainity in predicting the final outcome of the above litigation estimates the impact of the potential liability to be ''1 70 lakhs.

In view of the above, the auditors have made a Qualified Opinion in their Audit Report about their inability to comment on the ultimate outcome of this matter and the consequential impact, if any, on these financial statements.

27.17 The managerial remuneration paid to Managing director for the financial year 2022-23 of '' 48 lakhs was approved by the Share holders at the Annual General Meeting held on 30/09/2020 as per requirement of Section 197 read with schedule V of the Companies Act, 2013.

27.18 Exceptional Items:

(A) During the year the company had requested Preference Share Holders for waiver of the right to receive dividends till 31.03.2023 and the same was favourably considered by the Preference shareholders and approved. Based on the nature of the event the company has recognised the said waiver of '' 1671.27 Lakhs as an exceptional item in the statement of profit and loss account.

(B) As stated in note no. 27.14 the Term Loan from Sugar Development Fund has been restructured with effect from 20.05.2022 (i.e. date of issue of Administrative Approval) in the form of capitalisation of balance interest of '' 1654.15 Lakhs accrued upto 20.05.2022 along with the principal amount of '' 1991.60 Lakhs and waiver of additional interest in full and considering the nature of the event the company has recognised the waiver of the additional interest of '' 914.23 Lakhs as an exceptional item in the statement of profit and loss account.

Note for Variance in ratios

Debt Service Coverage Ratio: DSCR has decreased due to repayment of non-current borrowings as short-term

borrowings.

Return on Equity Ratio: due to lower losses in the current year compared to the previous years

Inventory Turnover Ratio: Due to increase in turnover during the year

Net Capital Turnover Ratio: Due to lower losses Company current liabilities is higher than current assets.

Net Profit Ratio: Due to lower losses Company.

Return on Capital Employed: Due to higher EBIDTA.

27.20 Additional Regulatory Information as required by Schedule III of the Companies Act, 2013:

a No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. b No charges are pending for registration with Registrar of Companies (ROC) beyond the statutory period.\

c During the current financial year, to the best knowledge of the company, it didn''t have any relationship

with Struck-off Companies.

d The Company has not traded or invested in Crypto Currency or Virtual Currency during the current or previous year.

e The Company is not been declared as a Wilful Defaulter by any Bank, Financial Institution or other lenders

f There is no income surrendered or disclosed as income during the current or previous year in the tax

assessments under the Income Tax Act, 1961, that has not been recorded in the books of account. g The Company has not entered into any Scheme of Arrangement in terms of sections 230 to 237 of the Companies Act, 2013. Hence there will be no accounting impact on the current or previous financial year.

h The Company has not raised any funds through the Issue of Securities during the current or previous year i (A) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: -

a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by on or behalf of the company (Ultimate Beneficiaries) or

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

(ii) (B) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the 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 company (Ultimate Beneficiaries), or

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

j The Company has not revalued its property, plant, and equipment during the current or previous year.

k The provisions of Corporate Social Responsibility Under Section 135 of Companies Act 2013 are not

applicable to the Company.

I The Company does not have any Immovable Properties where title deeds are not held in the name of the Company.

m The Company has not made any investment and do not have subsidiaries, therefore clause (87) of section

2 of the Act read with Companies (Restriction on number of Layers) Rules, 201 7, is not applicable.

27.21 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.

27.22 Previous years figures have been regrouped / reclassified wherever considered necessary to correspond with the current year classification/ disclosures.

27.23 The financial statements were approved for issue by the Board of Directors on 23rd May 2023.

As per our report attached

For M O S & Associates LLP For and on behalf of the Board of Directors

Chartered Accountants

Sd/- Sd/- Sd/-

Oommen Mani T, Sarita Reddy T.V, Sandeep Kumar Reddy

Partner Managing Director Vice Chairman & Director

Sd/- Sd/-

Place : Hyderabad V.R. Prasad D.S.V.R. Sumita

Date: 23rd May, 2023 Chief Financial Officer Company Secretary

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Mar 31, 2017

(ii) Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of '' 10 each. Each equity shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend. In the event of liquidation 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 number of equity shares held by the shareholders.

(iii) Rights, preferences and restrictions attached to preference shares:

a) 25,000,000 - 6% Cumulative redeemable preference shares of '' 10 each are due for redemption on or before 30 September,2023.

b) Variation in terms of 9,536,813 - 6% Cumulative redeemable preference shares of '' 10 each which were due for redemption on April 1, 2017 are as under:

i) Waiver of arrears of preference dividend till 1^st April 2017.

ii) Period of redemption extended from April 1, 2017 to April 1, 2029 with an early redemption right to the Company before the extended period of 12 years by giving 30 days notice.

These terms were approved by Preference shareholders vide resolution dated 30 March, 2017.

c) Variation in terms of 6,610,210 - 6% Cumulative optionally convertible preference shares of Rs, 10 each which were due for redemption on 1 April, 2015, are as under:

i) Waiver of arrears of preference dividend till 1 April, 2015.

ii) Changing the nomenclature to 6% cumulative redeemable preference shares of Rs, 10 each w.e.f. 1 April, 2015.

iii) Period of redemption extended from 1 April, 2015 to 1 April, 2025 with an early redemption right to the Company before the extended period of 10 years by giving 30 days notice.

These terms were approved by preference shareholders vide resolution dated 20 March, 2015.

v) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

a) Equity shares: Issued 12,829,043 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

b) 6% Cumulative optionally convertible preference shares: Issued 6,610,210 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

vii) Arrears of fixed cumulative dividends on preference shares :

Dividend on 6% cumulative redeemable preference shares- Rs, 436.86 lakhs (31 March, 2016 Rs, 762.18 lakhs).

Details of security for the short - term borrowings :

(i) First charge on all chargeable current assets of the Company (viz.) sugar, molasses, bagasse, stores and spares, extra neutral alcohol, rectified spirit and receivables on pari-passu basis with other members of the consortium lenders.

(ii) Second charge on the Company''s present and future fixed assets (both moveable and immovable) of sugar unit and distillery unit situated at Adloor Yellareddy Village, Sadashivnagar Mandal, Kamareddy District and sugar unit located at Maggi village, Kamareddy District of Telangana State on pari-passu basis with the other members of the Consortium, SDF and NCD holders.

(iii) First pari pasu charge on pledge of 79 lakh shares of Gayatri Sugars Limited belonging to Smt. T. Indira Subbarami Reddy and Sri T.V. Sandeep Kumar Reddy, on pari-passu basis with other members of the consortium lenders.

(iv) Personal guarantee of Shri T.V. Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy and Smt. T. Sarita Reddy.

*The The Company had made the provision towards preference dividend (6% Cumulative redeemable preference shares) of Rs, 57.22 lakhs and dividend distribution tax thereon of Rs, 8.03 lakhs during the year ended March 31, 2007. In view of the carried forward losses in the books, the Company had not remitted the dividend and tax thereon and was in the process of obtaining consent for not remitting the same. Subsequently, the Company has remitted the amount to the preference shareholder.

Note : Margin money deposits amounting to Rs, 1.51 lakhs (As at 31 March, 2016 : Rs, Nil) which have a maturity of more than twelve months from the balance sheet date have been classified under other noncurrent assets [Refer Note. 14].

During the year, the Company has specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November, 2016 to 30 December, 2016. The denomination wise SBNs and other notes as per the notification is given below : in ''

1.Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

Based on the information available with the Company, there are no dues / interest outstanding to micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006, as at 31 March, 2017 (As at 31 March, 2016 : Nil)

2. The cane development incentive will be paid by the company to encourage farmers to harvest the sugar crop and supply sugarcane to the Company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

Note 27 Employee benefit plans

(a) Defined contribution plans

The Company makes provident fund to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs, 87.00 lakhs (31 March, 2016: Rs, 81.93 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(b) Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity (Unfunded)

ii. Compensated Absences

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note 3. Related party disclosures

(i) Names of the related parties and their relationship:

Description of relationship Names of related parties

Promoter / Shareholder Dr. T Subbarami Reddy

Key Management Personnel (KMP) Smt. T. Indira Subbarami Reddy - Director

Sri. T.V. Sandeep Kumar Reddy -Vice Chairman Smt. T. Sarita Reddy- Executive Director Mr. V.R. Prasad - Chief Financial Officer Ms. Munmun Baid - Company Secretary

Enterprises in which KMP / Relatives of KMP Gayatri Projects Limited

can exercise significant influence. TSR Holdings Private Limited

Deep Corporation Private Limited Gayatri Fin-Holdings Private Limited Gayatri Hi-tech Hotels Limited Gayatri Capital Limited Gayatri Leasefin Private Limited T. Gayatri Engg. Co. Private Ltd T. Rajeev Reddy Real Estates Developers Pvt. Ltd. T. Anirudh Reddy Builders & Developers Pvt. Ltd. Maheswari Hotels & Theatres Private Limited Maheswari Film Productions Private Limited Indira Publications Private Limited Parameshwari Land Holdings Private Limited Gayatri Property Ventures Private Limited Gayatri Urban Ventures Private Limited Sandeep Housing Developers Private Limited Gayatri Realty Ventures Private Limited Indira Realty Holdings Private Limited Maheswari Townships Private Limited Sarita Land Holdings Private Limited Gayatri Contech Private Limited Indira Constructions Private Limited Gayatri Hotel Ventures Private Limited Gayatri Hotels and Theatres Private Limited Gayatri Tissue & Papers Limited Gayatri Bio Organics Limited Indira Energy Holdings Private Limited Trust under Common Management TSR Foundation

Note: Related parties have been identified by the Management.

Note 4. There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

Note 5."The Hon''ble High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh dismissed the Company''s writ petition (along with the other petitions on the same matter filed by other companies) vide its common order dated May 19, 2016 (''the Order'') in which it upheld the validity of levy of Electricity Duty @ 25 paisa per unit by the State Government on consumption of electricity by captive generating units relating to earlier years. During the year, the Company filed a Special Leave Petition (SLP) in the Hon''ble Supreme Court which dismissed the SLP vide order dated September 27, 2016 on the grounds that these matters were pending before the Board for Industrial and Financial Reconstruction (BIFR), and unless payments were being made by the petitioners as directed in its interim orders @15 paisa per unit. The Hon''ble Supreme Court also granted liberty to the petitioners to revive the petitions after the decision is given by the BIFR. Currently, the case filed before BIFR stands abated and the Company has not initiated any proceedings before the NCLT."

The Company has treated the estimated duty amount aggregating Rs, 283.99 lakhs as a Contingent Liability and no provision has been made in respect of the same. In the event of an unfavorable verdict in this matter, the Management based on the Supreme Court''s interim orders and considering the inherent uncertainty in predicting the final outcome of the above litigation estimates the impact of the potential liability to be Rs, 170.39 lakhs.

In view of the above, the auditors have made a qualification in their Audit Report about their inability to comment on the ultimate outcome of this matter and the consequential impact, if any, on these financial statements.

Note 6. Over the last few years, the Company has been incurring losses and as at March 31, 2017 the accumulated losses amounting to Rs, 12,804.58 lakhs (Previous year Rs, 13,884.97 lakhs) have completely eroded the net worth and, its current liabilities exceeded the current assets as on that date. The Sugar Companies have been facing financial difficulties on account of higher sugar cane prices, lower realization of sugar and high finance cost.

Owing to the complete erosion of the net-worth of the Company, the Board of Directors, in their meeting held on August 14, 2015 decided to make a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the Board for Industrial and Financial Reconstruction (BIFR) which in their hearing held on October 19, 2016 declared the Company as a Sick Industrial Company under section 3 (1) (0) of SICA, 1985. The BIFR appointed IDBI as the Operating Agency (OA) and the Company was required to submit the Draft Rehabilitation Proposal to the OA within a period of 8 weeks and the next date of hearing by the BIFR was fixed on December 27, 2016. Consequent to the repeal of SICA w.e.f. December 1, 2016, the case filed by the Company under the BIFR stands abated and the Company has an option to file a revised petition within 180 days before the NCLT. Based on the discussions with several lenders/Banks, the Company has decided not to initiate the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, before the NCLT.

The financial results have been prepared on a going concern basis, based on a Comfort letter provided by the promoters for continued support to the Company to meet its financial obligations, in order to enable the Company to continue its operations in the foreseeable future.

Note 7. Exceptional item

(a) Exceptional item for the quarter and year ended March 31, 2017 represents liability no longer required and written back of Rs, 150.47 lakhs relating to non-fulfillment of contractual obligations/damages.

(b) Exceptional item for the year ended March 31, 2016 - The Telangana State Electricity Regulatory Commission (TSERC) passed the final order on September 18, 2015 for upward revision of tariff in favor of the Company in respect of energy exported in the earlier years. On receipt of the TSERC order, the Company recognized the differential revenue of Rs, 227.40 lakhs, which amount was also received.

Note 8. In the earlier years the Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, which shall be compensated by the Company at the end of the scheme.

During the quarter and year ended March 31, 2017, the Company has allotted 69,50,500 Secured Unlisted Non-Convertible Debentures (NCD) of Rs, 10/- each at a coupon rate of 4% to the Banks.

Note 9. The tenure of appointment of the Executive Director (designated as a Managing Director w.e.f August 29, 2016) ended on April 30, 2016. The Remuneration Committee and the Board of Directors of the Company at their respective meetings held on May 20, 2016, approved the appointment and payment of remuneration for a period of three years with effect from May 1, 2016 on the same terms of earlier appointment. The said appointment and payment/provision of remuneration was approved by the shareholders in the Annual General Meeting held on September 26, 2016. The Company has sought the necessary approval from Central Government, whose response is pending.

Note 10. Financial Reporting Process : The Management conducted an assessment of the effectiveness of the internal control over financial reporting using the criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on this assessment, Management defied deficiencies in the internal control over financial reporting, that constitute material weaknesses, in respect of certain reconciliations between various accounting systems and the period - end adjustments.

The Company uses various subsystems, the output from which, is being used for accounting in the financial package maintained by the Company. Consequent to certain deficiencies in IT General and Application controls in the software platforms used for financial reporting, there were differences in balances between sub-systems / sub- ledgers with the general ledger, which have been manually reconciled by the Company. Whilst necessary adjustment entries were passed in the books of account for the year ended 31st March 2017, and these material weakness did not affect on the financial statements, except assessment of estimating the liability on a disputed matter. The management of the view that the Electricity Duty applicable on Captive consumption is a contingent in nature and no provision is required to be made.

Note 11. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2016

1. Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10 each. Each equity shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing annual general meeting except in case of interim dividend. 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 number of equity shares held by the shareholders.

2. Rights, preferences and restrictions attached to preference shares:

3. 9,536,813 - 6% Cumulative redeemable preference shares of Rs. 10 each are due for redemption on or after April 1, 2017.

3. 25,000,000 - 6% Cumulative redeemable preference shares of Rs. 10 each are due for redemption on or before September 30, 2023.

4. Variation in terms of 6,610,210 - 6% Cumulative optionally convertible preference shares of Rs. 10 each which were due for redemption on April 1, 2015 are as under:

5. Waiver of arrears of preference dividend till 1^st April 2015.

6. Changing the nomenclature to 6% cumulative redeemable preference shares of Rs. 10 each w.e.f April 1, 2015

7. Period of redemption extended from April 1, 2015 to April 1, 2025 with an early redemption right to the Company before the extended period of 10 years by giving 30 days notice.

These terms were approved by Preference shareholders vide resolution dated March 20, 2015.

8. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

9. Equity shares: Issued 12,829,043 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

10. 6% Cumulative optionally convertible preference shares: Issued 6,610,210 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

11. Arrears of fixed cumulative dividends on preference shares :

12. Dividend on 6% cumulative redeemable preference shares- Rs. 762.18 lakhs (31 March, 2015 Rs. 515.30 lakhs).

13. First charge on all chargeable current assets of the Company (viz.) sugar, molasses, bagasse, stores and spares, ethanol, rectified spirit and receivables on pari-passu basis with other members of the consortium lenders.

14. Second charge on the Company''s present and future fixed assets (both moveable and immovable) of sugar unit and distillery unit situated at Adloor Yellareddy Village, Sadashivnagar Mandal, Nizamabad District and sugar unit located at Maggi village, Nizamabad District of Telangana State on pari-passu basis with the other members of the Consortium.

15. Pledge of shares of Gayatri Sugars Limited belonging to Smt. T. Indira Subbarami Reddy and Sri T.V. Sandeep Kumar Reddy.

16. Personal guarantee of Shri T.V. Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy and Smt. T. Sarita Reddy.

*The Company had made the provision towards preference dividend(6% Cumulative redeemable preference shares) of Rs. 57.22 lakhs and dividend distribution tax thereon of Rs. 8.03 lakhs during the year ended March 31, 2007. In view of the carried forward losses in the books, the Company had not remitted the dividend and tax thereon and was in the process of obtaining consent for not remitting the same. Subsequently, the Company has remitted the amount to the preference shareholder .

17. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Act, 2006" has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro Enterprises and Small Enterprises as at March 31, 2016 is as under:

18. The cane development incentive is paid by the company to encourage farmers to harvest the sugar crop and supply sugarcane to the Company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

Disclosures under Accounting Standards Note 25 Employee benefit plans

19. Defined contribution plans

The Company makes provident fund to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 81.93 lakhs (31 March, 2015: Rs. 74.14 lakhs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

20. Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

21. Gratuity (Unfunded)

22. Compensated Absences

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

23 : The Company has recognized deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

24. There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

25. Over the last few years, the Company has been incurring losses and as at March 31, 2016 the accumulated losses amounting to Rs. 13,884.97 lakhs have completely eroded the net worth and, its current liabilities exceeded the current assets as on that date. The Sugar Companies have been facing financial difficulties on account of higher sugar cane prices, lower realization of sugar and high finance cost. The Company has implemented various initiatives for improving its financial position. The State and Central Governments, recognizing the importance of sugar industry, are taking necessary steps to strengthen it. As of March 31, 2016 the promoters have arranged an unsecured loan of Rs. 2,259.85 lakhs. Further during the previous year, the unsecured loan of Rs. 2,500 lakhs has been converted to 6% Cumulative Redeemable Preference Shares at a face value of Rs. 10 each for a tenure of not exceeding 9 years. In addition to the promoters funding, during the year ended March 31, 2016, the Company has obtained soft loans (under the scheme sanctioned by Ministry of Consumer Affairs, Food and Public Distribution, Government of India) aggregating Rs. 2,012 lakhs, corporate loans aggregating Rs. 1,545 lakhs and also renewed its working capital limits with the banks. Owing to the complete erosion of the net-worth of the Company, the Board of Directors , in their meeting held on August 14, 2015 decided to make a reference under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to the Board for Industrial and Financial Reconstruction (BIFR) which reference was registered and acknowledged by BIFR vide their letter dated October 19, 2015. On May 13, 2016, the company received a letter dated May 6, 2016, from BIFR, stating that the date for hearing the case in relation to the proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, has been fixed on May 11, 2016. However, as the date fixed for hearing the case had lapsed by the time the Company received the letter from BIFR, the Management is in the process of replying to BIFR with a request for a revised hearing date. In terms of the aforesaid reference, on receiving the intimation from BIFR, the Company will be submitting a Scheme for revival / rehabilitation to BIFR as per the provisions of SICA. The financial statements have been prepared on a going concern basis, based on a Comfort letter provided by the promoters for continued support to the Company to meet its financial obligations, in order to enable the Company to continue its operations in the foreseeable future.

26. Exceptional item

27. During the year ended March 31, 2016, the Telangana State Electricity Regulatory Commission (TSERC) has passed the final order on September 18, 2015 for upward revision of tariff in favour of the Company in respect of energy exported in the earlier years by the Company to Telangana State Northern Power Distribution Company Limited (TSNPDCL) . The Management on receipt of the TSERC order has recognized the differential revenue of Rs. 227.40 lakhs during the year ended March 31, 2016, which amount has been received.

28. The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, which shall be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks raised a demand of Rs. 840 lakhs towards ROR and the Company''s proposal for payment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares had not been agreed by the banks during the previous years. The Company paid and charged to the Statement of Profit and Loss an amount of Rs. 84 lakhs during the year ended March 31, 2014. As the Company was incurring losses for past few years and there was no cash surplus, the Company was pursuing with the banks for waiver of balance amount of Rs. 756 lakhs. During the consortium meeting held on June 9, 2014, the member banks of the consortium had decided not to consider, the waiver request of the Company and requested the Company to make the payment of the balance ROR amount before March 31, 2015. Consequently, the Management agreed to pay balance ROR amount in installments and accordingly an amount Rs.756 lakhs was provided during the previous years.

The Company''s proposal for the payment of ROR by way of Non-Convertible Debentures (NCD''s) at a coupon rate of 4% was approved in the meeting of CDR EG on February 22, 2016. Further, the company was directed to complete the issuance of NCD''s by March 2016. As the Company has received the communication of the same late and also keeping in view the procedure involved in issuance of NCD''s, the Company has requested CDR EG to grant time until July, 2016 to complete the process of issuance and dispatch of NCD''s.

29. Pursuant to the Scheme of Amalgamation, between the Company and GSR Sugars Private Limited, during the year ended March 31, 2010, the Company had recognized Goodwill of Rs. 1,212 lakhs, which was being amortized over a period of ten years. The carrying value of goodwill as at March 31, 2015 was Rs. 606.16 Lakhs. In view of losses and complete erosion of net worth, more fully detailed in Note 31, the Management opined that the goodwill is required to be impaired. Consequently, during the year ended March 31, 2015 the entire carrying value of the goodwill of Rs. 606.16 lakhs was impaired and charged to the Statement of Profit and Loss.

30. Financial Reporting Process

The Management conducted an assessment of the effectiveness of the internal control over financial reporting using the criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on this assessment, Management identified a deficiency in the internal control over financial reporting, that constitutes a material weakness, in respect of certain reconciliations between various accounting systems.

The Company uses various subsystems, the output from which, is being used for accounting in the financial package maintained by the Company. Consequent to certain deficiencies in IT General and Application controls in the software platforms used for financial reporting, there were differences between sub-systems / sub- ledgers with the general ledger, which have been manually reconciled by the Company. Whilst necessary adjustment entries were passed in the books of account for the year ended 31st March 2016, the related material weakness in internal control was remediated after the year-end.

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

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Mar 31, 2015

1. Background:

Gayatri Sugars Limited was established in the year 1995. The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for the captive consumption. The Company's Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the company yield by-products like Molasses, Bagasse.

2. Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 10 each. Each equity shareholder is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend. In the event of liquidation 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 number of equity shares held by the shareholders

3. Rights, preferences and restrictions attached to preference shares:

a) 9,536,813 - 6% Cumulative redeemable preference shares are due for redemption on or after April 1, 2017.

b) 25,000,000 - 6% Cumulative redeemable preference shares are due for redemption on or before September 30, 2023.

c) Variation in terms of 6,610,210 - 6% Cumulative optionally convertible preference shares which were due for redemption on April 1, 2015 are as under:

i) Waiver of arrears of preference dividend till 1st April 2015.

ii) Changing the nomenclature to 6% cumulative redeemable preference shares w.e.f April 1, 2015

iii) Period of redemption extended from April 1,2015 to April 1,2025 with an early redemption right to the Company before the extended period of 10 years by giving 30 days notice.

These terms were approved by Preference shareholders vide resolution dated March 20, 2015.

5. Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

a) Equity shares: Issued 12,829,043 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

b) 6% Cumulative optionally convertible preference shares: Issued 6,610,210 shares pursuant to scheme of amalgamation between Gayatri Sugars Limited and GSR Sugars Private Limited on 29 April, 2011

6. Arrears of fixed cumulative dividends on preference shares :

a) Dividend on 6% cumulative redeemable preference shares- Rs. 51,530,127 (31 March, 2014 Rs. 40,054,615).

b) Dividend on 6% cumulative optionally convertible preference shares - Rs. NIL (31 March, 2014 Rs. 15,864,504).

Particulars As at As at 31 March, 2015 31 March, 2014 Rs Rs 7. Contingent liabilities and commitments

(i) Contingent liabilities

(a) Claims against the company not 2,494,497 2,494,497 acknowledged as debt

(b) Central excise demand 13,881,669 13,881,669

(c) VAT demand 2,214,159 2,214,159

(d) Dividend on 6% cumulative 51,530,127 40,054,615 redeemable preference shares

(e) Dividend on 6% cumulative optionally convertible preference shares. - 15,864,504

(ii) Commitments

Estimated amount of contracts remaining to be executed oncapital account (Net of capital advances Rs. Nil) Tangible assets - -

Other commitments 1,820,000,000 1,820,000,000

8. The cane development incentive is paid by the company to encourage farmers to harvest the sugar crop and supply the canes to the company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

9. As required under Section 203 of the Act, read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company shall have a whole-time Company Secretary. The Company is in the process of appointing a whole-time Company Secretary.

Disclosures under Accounting Standards Note 24 Employee benefit plans

10. a Defined contribution plans

The Company makes provident fund to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 7,414,053 (31 March, 2014: Rs. 6,249,677) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

11.b Defined benefit plans

The Company offers the following employee benefit schemes to its employees: i. Gratuity (Unfunded)

12. Related party disclosures

13. Related party disclosures

(i) Names of the related parties and their relationship:

Description of relationship Names of related parties

Promoter / Shareholder Dr. T Subbarami Reddy

Key Management Personnel Smt. T. Indira Subbarami Reddy - Director Sri. T.V. Sandeep Kumar Reddy -Vice ChairmanSmt. T. Sarita Reddy- Executive Director Mr. V.R. Prasad - Chief Finance Officer Company Under Common Management Gayatri Fin Holdings Limited TSR Holdings Private Limited Deep Corporation Private Limited Gayatri Tissue and Papers Limited

Major Shareholder Mohan Project Contractors Private Limited

Trust under Common Management TSR Foundation

Note: Related parties have been identified by the Management.

14. There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

15. As at March 31, 2015 the accumulated losses amounted to Rs. 1,253,287,646 which has completely eroded the net worth of the Company . The Company has made a reference to the Board for Industrial and Financial Reconstruction (BIFR) on August 5, 2013, under Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985. Further, the Company is dependent on continuous support from its promoters. As of March 31, 2015 the promoters have arranged an unsecured loan of Rs. 264,208,771. Further during the year, the unsecured loan of Rs. 250,000,000 has been converted to 6% Cumulative Redeemable Preference Shares at a face value of Rs. 10 each for a tenure of not exceeding 9 years. The financial statements have been prepared on a going concern basis based on a Comfort letter received from its promoters for continued support to the Company with all necessary assistances including financial and operational to continue with the operations of the Company. Promoters are hopeful that Company would be able to generate sufficient profits in the foreseeable future to make it economically viable.

16. Exceptional item (a) The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring ('CDR') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense ('ROR') i.e. interest rate concession given earlier to the Company, which shall be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks raised a demand of Rs. 84,000,000 towards ROR and the Company's proposal for payment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares had not been agreed by the banks during the previous years. The Company paid Rs. 84,00,000 till March 31,2014. As the Company was incurring losses for past few years and there was no cash surplus, the Company was pursuing with the banks for waiver of balance amount of Rs. 75,600,000. In consortium meeting held on June 9, 2014, the member banks of the consortium decided that the ROR payment should be made at the earliest by March 2015. Consequently, the management of the Company has agreed to pay ROR amount in installments has accordingly made provision towards the same.(b) As at March 31, 2015 an amount of Rs. 60,615,758 was carried as goodwill, which arose on account of company's amalgamation with GSR Sugars Private Limited in the year 2010. In view of continuous losses and substantial erosion of net worth ,more fully detailed in note 30, the management is of the opinion that the goodwill is required to be impaired. Consequently, an amount of Rs. 60,615,758, has been provided towards provision for impairment of goodwill and the same has been disclosed as 'exceptional item' in the financial statements.

17. The Company has recognized revenue at revised tariff on the Export of Power to TPNPDCL based on the order passed by Appellate Tribunal for Electricity, remanding the matter to the State Commission. The Appellate Tribunal vide its order dated November 20, 2014, remanded the matter for state commission for considering the revision of tariff. Since the Tribunal's direction to consider the revision of tariff would be favorable to the company and as the TPNPDCL has not preferred an appeal against the order of the Appellate Tribunal within time, the management has recognised the revenue at revised tariff.

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

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Mar 31, 2014

1. Background:

Gayatri Sugars Limited was established in the year 1995. The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for the captive consumption. The Company''s Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the company yield by-products like Molasses, Bagasse.

2.1 Contingent liabilities and commitments

Particulars As at As at 31 March, 2014 31 March, 2013

(i) Contingent liabilities

(a) Claims against the company not acknowledged as debt 2,494,497 2,494,497

(b) Dividend on 6% cumulative redeemable preference shares 40,054,615 39,902,121

(c) Dividend on 6% cumulative optionally 15,864,504 13,828,890 convertible preference shares

(d) Central excise demand 13,881,669 5,853,521

(e) VAT demand 2,214,159 -

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account (Net of capital advances Rs. Nil)

Tangible assets - 898,880

Other commitments 1,820,000,000 1,690,000,000

2.2 The cane development incentive is paid by the company to encourage farmers to harvest the sugar crop and supply the canes to the company without any disruption. Such incentives are determined based on contractual terms agreed with the farmers against supplies.

Note 3 Disclosures under Accounting Standards

3. Employee benefit plans

3a Defined contribution plans

The Company makes provident fund to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 6,249,677 (year ended 31 March, 2013 Rs. 5,487,456) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Note : The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the correspond- ing deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

Note 30 There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

Note 31 As at March 31, 2014, the accumulated losses amounted to Rs. 606,201,701 which is more than 50% of the peak net worth of the Company during the four financial years immediately preceding the current financial year. The Company has made reference to the Board for Industrial and Financial Reconstruction (BIFR) on August 5, 2013, under Section 23 of Sick Industrial Companies (Special Provision) Act, 1985. The Company is dependent on continuous support from its promoters. As of March 31, 2014 the promoters have arranged an unsecured loan of Rs. 517,974,771. The financial statements have been prepared on a going concern basis based on a Comfort letter received from its promoters for continued support to the Company with all necessary assistances including financial and operational to continue with the operations of the Company. Promoters are hopeful that Company would be able to generate sufficient profits in the foreseeable future to make it economically viable.

Note 32 The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, will have to be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks have raised a demand of Rs.84,000,000 towards ROR and the Company''s proposal for pay- ment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares has not been agreed by the banks during the previous year. The Company has paid Rs. 8,400,000 till March 31, 2014. As the Company was incurring losses for past few years and there was no cash surplus, the Company was pursuing with the banks for waiver of balance amount of Rs. 75,600,000. Subsequently, the bankers have agreed for extension of time for payment of the balance ROR claim upto March 2015 or earning of profit whichever is earlier, to their authorities at the earliest. As the net worth of the Company is substantially eroded and Company has also made a reference to BIFR, it is hopeful of getting wavier / relief package and hence no provision has been made.

Note 33 During the year ended March 31, 2014, executive director was reappointed by the Board of Directors of the Company, for a period of three years with effect from May 1, 2013, on the same terms of earlier appointment. The said reappointment was approved by the members in the Annual General Meeting held on September 30, 2013 and is pending approval from the Central Government. The Company is in the process of making requisite application to the Central Government in this respect.

Note 34 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2013

1.Background:

Gayatri Sugars Limited was established in the year 1995. The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for the captive consumption. The Company''s Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the company yield by-products like Molasses, Bagasse.

2.1 Employee benefit plans

2.1 a Defined contribution plans

The Company makes Provident Fund to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 5,503,405 (Year ended 31 March, 2012 Rs. 5,328,680) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Note : The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

Note 3 There are no derivative contracts taken during the year and outstanding as at the year-end. Further, there are no foreign currency exposures as at the year-end.

Note 4 Loans and Advances include Rs. NIL (Year ended 31 March, 2012 Rs. 6,739,990) receivable from Banks paid towards interest on loans under "Scheme for Extending Financial Assistance to Sugar Undertakings" ("SEFASU"). Under the scheme, the concessional interest is reimbursed by the Central Government directly to the banks. Upon reimbursement from the Central Government the interest recovered by the banks will be reimbursed to the Company. Considered good for recovery by the management.

Note 5 As at March 31, 2013 the accumulated losses amounted to Rs. 377,471,778 which is more than 50% of the peak net worth of the Company during the four financial years immediately preceding the current financial year . The Company is dependent on continuous support from its promoters. During the year ended March 31, 2013 the promoters have arranged unsecured loan of Rs. 412,435,273 . The financial statements have been prepared on a going concern basis based on a Comfort letter received from its promoters for a continued support to the Company with all necessary assistances including financial and operations to continue with the operations of the Company. Promoters are hopeful that Company would be able to generate sufficient profits in the foreseeable future to make it economically viable.

Note 6 The Company paid interest on Working Capital loans raised from the Banks at a concessional rate under Corporate Debt Restructuring (''CDR'') scheme as per the Reserve Bank of India guidelines, pursuant to which, the Banks had a Right of Recompense (''ROR'') i.e. interest rate concession given earlier to the Company, will have to be compensated by the Company at the end of the scheme. Upon expiry of the CDR time period, the respective banks have raised a demand of Rs. 840,00,000 towards ROR and the Company''s proposal for payment of interest claims partly in cash and the balance in the form of issue of redeemable preference shares has not been agreed by the banks during the year. The Company has paid Rs. 84,00,000 till March 31, 2013. As the Company is incurring losses for past few years and there is no cash surplus, the Company is pursuing with the banks for waiver of balance amount of ROR claim aggregating Rs. 75,600,000. The Management is confident of getting waiver for the payment of the said demand and accordingly, no provision has been made in the books for the balance ROR claim.

Note 7 Previous year''s figures

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

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Mar 31, 2012

A. COMPANY OVERVIEW

Gayatri Sugars Limited was established in the year 1995 ('the Company'). The Company is into manufacture of sugar and allied products. The Company also operates a cogeneration unit for power generation which is used for sale and for the captive consumption. The Company's Products includes sugar, distillery products like Rectified Spirit, Impure spirit, Extra neutral Alcohol. The processes of the Company also yield by-products like Molasses and Bagasse.

Notes:

(i) Pursuant to the Scheme of Arrangement ("the Scheme") between Gayatri Sugars Limited ("GSL"/ the "transferee company"/ "the Company") and GSR Sugars Private Limited ("GSRSPL"/ the "transferor company"), as approved by the respective company's shareholders and subsequently approved by the Hon'ble High Court of Andhra Pradesh on 18 February, 2011, the entire business and undertaking of GSRSPL including all assets, liabilities, duties and obligations, have been transferred to and vested in the Company with effect froml April, 2010. The approved Scheme was filed with the Registrar of Companies, Andhra Pradesh, on 23 March, 2011.The Board of Directors at their meeting held on 8 April, 2011 have taken on record the aforesaid order of the Hon'ble High Court of Andhra Pradeshwith regard to the Schemeand at their meeting held on 29 April, 2011, have allotted the shares to the eligible shareholders, as per the Scheme.The shareholders of GSRSPL, were issued 16 equity shares of the Company for every 10 equity shares held in GSRSPL, aggregating to 12,829,043 equity shares.

(ii) The share capital of the GSL after issue of equity shares to the shareholders of GSRSPL is to be reduced and restructured to the extent of accumulated losses amounting to Rs. 259,185,400 out of total accumulated loss as at 31 March, 2010 of Rs. 453,924,980 and the balance of Rs. 194,739,580 against potential allotment of equity shares to shareholders of GSRSPL, pursuant to the Scheme.

(iii) The unsecured loans of promoters of GSL as at 31 March, 2010 of Rs. 228,252,100 is to be converted into 13,800,000 equity shares ofRs. 10 each at a premium of Rs. 1.75 per share aggregating to Rs. 24,150,000 and 6,610,210 cumulative optionally convertible preference shares of Rs. 10 each at a coupon rate of 6% p.a.

(iv) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

Notes:

v) Arrears of fixed cumulative dividends on preference shares :

a) Dividend on 6% Cumulative Redeemable Preference Shares- Rs.28,610,439 (31 March, 2011 Rs.22,888,351 ).

b) Dividend on 6% Cumulative Optionally Convertible Preference Shares - Rs. 7,932,252 (31 March, 2011 Rs. 3,966,126 ).

vii) Terms of redemption of preference shares

a) 9,536,813- 6% Cumulative Redeemable Preference Shares are due for redemption on or after April 1, 2017.

b) 6,610,210- 6% Cumulative Optionally Convertible Preference Shares are due for redemption at the end of 5 years from the appointed date (i.e. April 1, 2010) or convertible into equity shares of Rs.10 each at a premium of Rs. 1.75 per share, at the option of the preference shareholders.

viii) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash:

i) First charge on all chargeable Current Assets of the company (viz.) Sugar, Molasses, Bagasse, Stores and Spares, Extra Neutral Alcohol, Rectified Spirit and Receivables on pari-passu basis with other members of the consortium.

ii) Second charge on the company's present and future immovable properties and fixed assets of sugar unit at Kamareddy Unit on pari-passu basis with the other members of the Consortium and term lender (IOB).

iii) Second charge on the company's buildings, plant & machinery of distillery unit at Kamareddy Unit on pari-passu basis with the other members of the consortium.

iv) Pledge of shares of GSL belonging to Smt. T. Indira Subbarami Reddy and Sri TV Sandeep Kumar Reddy.Corporate Guarantee of Gayatri Projects Limited.

v) Personal guarantee of Shri TV Sandeep Kumar Reddy, Smt. T Indira Subbarami Reddy Reddy and Smt. T. Sarita Reddy.

vi) Personal guarantee of Shri TV Sandeep Kumar Reddy, Smt. T Indira Reddy and Smt. T. Sarita Reddy.

* The Company had made the provision towards preference dividend of Rs. 5,722,088 and dividend distribution tax thereon ofRs. 802,523 during the year ended March 31, 2007. In view of the carried forward losses in the books, the Company had not remitted the dividend and tax thereon and is in the process of obtaining consent for not remitting the same

* Cash and cash equivalents as above meet the definition of Cash and Cash Equivalents as per Accounting Standard- 3 "Cashflow Statement"

**Other Bank balances include deposits amounting to Rs. 17,151,842(As at 31 March, 2011 Rs. 16,038,418) which have an original maturity of more than 12 months and pledged with Banks as security.

1.1 Contingent liabilities and commitments

Particulars As at As at

31 March, 2012 31 March, 2011 Rs. Rs.

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt 2,494,497 2,494,497

(b) Dividend on 6% Cumulative Redeemable Preference Shares 33,251,767 26,601,414

(c) Dividend on 6% Cumulative Optionally Convertible 9,219,062 4,609,531 Preference Shares.

(d) Crop loans given to farmers by the banks have been 12,363,318 156,246,160 guaranteed by the Company

(e ) Corporate guarantees given to a Supplier 15,000,000 _ for supply of PVC pipes to farmers

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account Tangible assets 475,000 475,000

Note

2.1 Employee benefit plans

2.1a Defined contribution plans

The Company makes Provident Fund to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.The Company recognised Rs. 5,328,680 (Year ended 31 March, 2011 Rs. 4,953,239) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2.1b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

ii. Compensated Absences

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

Note : The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax.

Note 3 Loans and Advances include Rs.6,739,990 (Year ended 31 March, 2011 Rs.10,490,081) receivable from Banks paid towards interest on loans under "Scheme for Extending Financial Assistance to Sugar Undertakings" ("SEFASU"). Under the scheme, the concessional interest is reimbursed by the Central Government directly to the banks. Upon reimbursement from the Central Government the interest recovered by the banks will be reimbursed to the Company.Considered good for recovery by the management.

Note 4 Changes in inventories of finished goods and work in progress for the year ended includes Rs. 42,705,608 of Interest paid on working capital which had been considered for the purpose of valuation of Inventories as of 31 March, 2011. In the current yearinventories are being valued excluding interest cost.

Note 5 Previous year's figures

The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements.

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

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Mar 31, 2010

1. Contingent liabilities not provided for:

a. Dividend on 6% Cumulative Redeemable Preference Shares - Rs. 17,166,264/- (31.03.2009: Rs.11,444,176/-).

b. Claims against the company not acknowledged as debt Rs.22,99,377/- (31.03.2009: Rs.38,17,077/-).

2. 14% Secured Non-Convertible Debentures (NCDs) issued by the Company for an amount of Rs.350,000,000/- to Rajasthan Leasing Private Limited (RLPL) during the year 2007-08 has been redeemed on 31 March, 2010. The Company has also paid the dues towards interest and other finance charges as per the terms of agreement. RLPL has confirmed that there are no dues from the Company and issued a No Due Certificate on 31 March, 2010.

3. 6% Cumulative Redeemable Preference Shares are due for redemption on or after 1 April, 2017.

4. Secured Loans:-

a. Term Loan from Indian Overseas Bank (IOB) is secured by an exclusive first charge on the buildings and plant & machinery of the distillery unit both present and future and second charge on the fixed assets of the sugar unit on pari-passu basis with working capital banks.

b. Term Loan - Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU) are secured by a pari - passu residual charge on all the Companys immovable properties, both present and future and a first charge by way of hypothecation of movable properties (excluding the inventories and book debts) both present and future.

c. Term Loan from YES BANK Limited is secured by an exclusive first charge on all the fixed assets of the company, both present and future, including the land on which distillery assets have been setup, excluding the building and plant & equipment solely relating to the distillery unit charged to IOB and second pari - passu charge on Fixed Assets of distillery unit along with working capital banks. Further, the term loan is secured by way of pledge and non-disposal undertaking of 30% of the equity shares of the promoters in the Company. Also Pledge of Fixed Deposit of Rs.15,000,000/- with the bank.

d. Cash Credits from banks are secured by way of pari - passu first charge on all current assets of the company i.e. Raw Materials, Stock in Process, Finished Goods, Stores and Spares, Book Debts etc. and also secured by way of pari-passu second charge on the.Companys immovable and movable properties.

e. Term Loan and Cash Credits loans are guaranteed by the promoter directors of the Company.

f. Crop loans given to farmers by Union Bank of India, Nizamabad have been guaranteed by the Company. Amount outstanding Rs.45,392,378/- (31.3.2009: Rs.11,495,288/-)

5. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.Nil (31.3.2009: Rs.6,677,000), net of advances is Rs.Nil (31.3.2009: Rs.3,955,000).

6. Additional Information as required pursuant to Para 3 and 4 (C&D) of the Part II of the Schedule VI of the Companies Act, 1956.

7 Disclosures as required under Accounting Standard AS-15

i Gratuity

This is a defined benefit plan as detailed and the liability for which is determined on the basis of actuarial valuation and is an unfunded plan as of 31 March, 2010.

ii Compensated Absences

Leave which accrue to the employees and which can be carried to future periods but are expected to be en-cashed or availed in twelve months immediately following the year end are reported as expenses during the year in which the employee perform the services that the benefit covers and the liabilities are reported at the un-discount amount of the benefits after deducting amounts already paid. Where there is restriction on availment of encashment of such accrued benefit or encashment is otherwise not expected to wholly occur in the next twelve months, the liability on account of the benefit is actuarially determined using the project unit credit method.

iii Accounting Policy for recognizing actuarial gains and losses Immediate recognition in the Statement of Profit and Loss

iv Scheme Description

The Scheme provides for a lump sum benefit, subject to a vesting period of 5 years in case of early separation, based on final salary and years of service.

v Actuarial valuation method: - Projected Unit Credit

8. The Deferred Tax Asset on account of carried forward business losses have not been recognized as there is no virtual certainty of realization of such assets in future.

9. Figures for the previous year have been regrouped/ rearranged / reclassified wherever necessary to confirm to the current year presentation.