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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Simbhaoli Sugars Ltd.

Mar 31, 2024

i) The storage fund for molasses has been created to meet the cost of construction & maintenance of molasses storage tank as required under Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974 and the said storage fund is represented by investment in the form of fixed deposits with banks amounting to '' 136.07 lacs (Previous year '' 121.71 lacs).

ii) Securities Premium is used to record premium on issue of shares. This reserve shall be utilised in accordance with the provisions of the Act.

iii) Forfeiture reserve represents the amount forfeited against non conversion of share warrant into equity share with in stipulated period by specified promoters.

iv) Retained earnings represents the undistributed profit/accumulated loss of the Company.

v) Other comprehensive income (OCI) represents the balance in equity relating to re-measurement gain / (loss) of defined benefit obligation . This will not be re-classified to Statement of Profit and Loss.

4. For the year ended March 31, 2024 and in previous years, due to higher raw material cost i.e. sugarcane costs (SAP) fixed by State government and relatively lower sales realization of finished sugar on adverse demand & supply scenario, and other external factors, the Company had continuously incurred huge cash losses resulting in complete erosion of its net worth, rendering the Company unable to meet payment obligations towards its lenders as well as to the sugarcane farmers in terms of their respective agreements and understanding. All the production units of the Company are operational and continue to operate at sub-optimum levels on year-on-year basis while consistent efforts are being made for improvement in operational efficiency viz. improvement in sugar recovery, reduction in overheads and reduction in other operational and administrative costs etc. However, due to lack of required working capital and no capex being undertaken towards augmentation and modernization, the operations of distillery and sugar plants are still adversely impacted. Further, the availability of required sugarcane for optimal utilization of production capacities is still a challenge on account of aforesaid reasons. In distillery segment, noninstallation of incineration boilers and other equipmentâs to meet the stringent requirement of Pollution Control Board is still resulting in curtailed production levels. Further, the expected accrued benefits under the Sugar Industries Promotion policy 2004 has not been yet disbursed by the State Government as the matter is sub-judice.

Recognizing the status of the sugar industry, the state and central governments have taken a number of measures in past to improve the financial health of sugar mills and to support the liquidation of sugarcane arrears by grant of soft loan, fixing minimum support price of sugar, and Ethanol blending program with petrol coupled with long term tendering and fixing remunerative selling price of ethanol etc. All these measures specifically ethanol blending programme, have resulted in revival of the sugar industry but the Company is continuing to suffer and incurring losses on account of non-availability of sufficient sugar cane commensurate to its crushing capacities, on account of delayed payment of sugar cane prices due to adverse liquidity position, which have resulted in the diversion of sugar cane in the command areas to the other adjoining sugar mills. Benefits under soft loan could also not be availed, since credit facility accounts with its lenders were having NPA categorisation.

Due to default in repayment of credit facilities, lenders to the Company have initiated recovery proceedings at various forums, including filing of applications before the Honâble National Company Law Tribunal (NCLT) under Section 7 of the Insolvency and Bankruptcy Code, 2016 and also filing of recovery proceedings against personal guarantors (Promoters) before NCLT under section 95 of Insolvency and Bankruptcy Code,2016 in addition to approaching Debt Recovery Tribunals in Delhi as well as in Lucknow, Uttar Pradesh. One of the lenders had declared the Company and Guarantors to the credit facility, as Willful Defaulters, which was Set Aside by Honâble Punjab and Haryana High court at Chandigarh, while another lender had started the proceedings to examine the Willful Default and a personal hearing was also granted, basis Companyâs representations the decision is kept in abeyance. One lender had categorized company with a fraud tag, which was set aside by the Honâble Delhi High Court. While one of the lenders had initiated recovery proceedings under section 138 of the Negotiable Instrument Act, wherein non-bailable warrants were issued against the erstwhile directors and officials of the Company, which is being contested at the appropriate forum. Against a criminal complaint filed by one of the lenders, the Enforcement Directorate had passed an Attachment Order on certain assets of the Company to the extent of '' 109.80 Crore, against which the Company had preferred an appeal before with the appropriate authority and an Interim Stay had been granted by the Honâble Appellate Tribunal.

The Company is continuing to pursue a comprehensive debt resolution proposal with all the lenders. Commercial lenders have shown their inclination to accept the debt resolution proposal and accepted the Earnest Money offered thereof, while the debt realignment proposal was submitted to other lenders against which the company has started the repayments, pending approval of respective lenders. Revised debt resolution proposal given to commercial lenders on a bilateral basis is under consideration by the commercial lenders, based on which Honâble NCLT Bench, Allahabad has adjourned the hearing.

Considering the steps initiated to turnaround the Company and sugar sector, and continuing manufacturing operations in the near foreseeable future with improved operational efficiency, these financial statements are continued to be presented on a Going Concern basis, which contemplates realization of assets and settlement of liabilities, in the normal course of business. Accordingly, property, plant and equipment continued to be stated at the carrying amount, without testing for impairment.

5 Contingent liabilities and commitments (to the extent not provided for):

i) Capital and other commitment

Estimated value of contracts (net of advances) remaining to be executed on Capital account '' 416.11 lacs (Previous year '' 351.00 lacs). The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreements in normal course of business. The Company does not have any other long-term commitments or material non-cancellable contractual commitments / contracts, which may have a material impact on the financial statements.

ii) Claims against the Company not acknowledged as debts '' 2,505.46 lacs (Previous Year '' 2,491.47 lacs).

All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not in the opinion of the management, have a material effect on results of operations or financial position of the Company.

The amount shown in Note No. 5 (ii) above represent the best possible estimates arrived on the basis of demand raised by the claimant and does not include interest if any, payable thereon from the date of demand. The uncertainties and timing of the cash flows are dependent on the outcome of different legal processes which have been invoked by the company or the claimants, as the case may be and, therefore cannot be estimated accurately. The Company does not expect any reimbursement in respect of above contingent liabilities,except as stated in Note No.5(iii).

In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the ground that there are fair chances of successful outcome of the appeals.

iii) With the introduction of GST w.e.f. July 1,2017, the purchase tax earlier levied on ENA subsumed therein. Since under GST no tax was notified to be paid on the sale of ENA, no tax was paid by Industry on its sale. Later on, the State Government notified 5%.VAT rate on the sale of ENA w.e.f. December 09, 2019. Accordingly the industry, including the company started paying VAT @ 5% w.e.f December 09, 2019.However, the commercial tax Department of Uttar Pradesh raised a demand of '' 1933.47 lacs on the company based on the tax rate of 32.5% of ENA ,in respect of sales made during the periods July 1,2017 to March 31,2020. The Company filed appeal against the aforesaid demand before Commercial Tax Tribunal - Ghaziabad, and deposited '' 206.22 lacs under protest against the aforesaid demand. The tribunal had stayed the recovery of balance demand till the disposal of appeal. Since, the matter is subjudice and the company expects a favorable decision on the matter, no provision has been made against the aforesaid demand.Further the payment, if any, will be required to be made for the VAT liability ,the same will be reimbursed by the buyers as per agreement with them.

iv) The Honâble Allahabad High Court in the case of PIL Rashtriya Kisan Mazdoor Sangathatan Vs State of Uttar Pradesh passed final order, directing the cane commissioner to decide afresh the issue as to whether the Sugar Mills are entitled for waiver of interest of delayed payment of sugarcane price for the season 2012-13,2013-14 and 2014-15 under the provision of section 17(3) of the U.P Sugarcane (Regulation of Supply and Purchase) Act,1953.Thereafter,in an Contempt application filed before High court and its follow up proceeding, the cane commissioner filed an affidavit specifying interest rates on delayed payment of cane price to be paid by Sugar Mills. The company had also received a notice for payment of interest on delayed payment of cane price for Sugar season 2012-13 is pursuant to the aforesaid order. The Company made representation against the said demand notice. Subsequently, State Government has filed modification application before and Cane commissioner also filed SLP with the Supreme Court in this matter which is pending for adjudication. Considering the above facts and based on the the past practice of waiver of interest by the State Government, no provision has been made in respect of the interest payable on delayed payment of cane price for the aforesaid sugar seasons and also for subsequent sugar seasons. Since no demand has been raised by the Government, except for the sugar season 2012-13, the total amount of interest payable on delayed payment of cane price up to March 31,2024 and not provided in the accounts could not be quantified.

v) Cane Societies were in dispute with the State Government of Uttar Pradesh with regards to retrospective waiver of society commission payable by sugars mills for the Sugar Season 2012-13, 2014-15 and 2015-16 as a part of its relief package to Sugar Industry. The Honâble Allahbad High Court vide order dated 21-12-2017 decided the matter in favour of Cane Societies and against the aforesaid order U.P Sugar Mill Association filed SLP before Honâble Supreme Court. The matter is still pending for the further adjudication. Based on the legal review of the facts, the management concluded that the possibility of crystallization of liability in the present case is remote and according no provision has been made in accounts.

6 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act,2006 (MSMED ACT, 2006).

On the basis of supplier information available with the Company who have registered under the MSMED Act, 2006, the following are the details:

7 Certain banks had advanced Agri loans to sugarcane farmers through the erstwhile Simbhaoli Sugars Limited (ESSL) under the management and collection agreements and were provided Corporate Guarantee and post-dated cheques as security. These loans were to be repaid by the Company to the respective lenders from the dues payable to sugarcane farmers against their supplies to the sugar mill, but due to the overall downturn in the sugar industry and primacy to pay sugarcane dues in priority to any other dues/ payments, the Company could not repay these loans on their due dates. Company had submitted a financial restructuring plan to its lenders in FY 2014-15. As per sanction of CDR-EG dated February 02, 2016 all the outstanding loans/ dues were proposed to be converted into term loans, subject to the consent of respective commercial lenders Two of the commercial lenders/ banks had converted their outstanding loans dues into term loan in the financial year 2016-2017 while one of the commercial lender/ bank had converted their dues into term loan in financial year 2017-18.

Erstwhile Oriental Bank of Commerce (e-OBC) now amalgamated with Punjab National Bank, one of the commercial lender, who had converted Agri Loan into Corporate loan as stated above, in financial year 2016-17 had arbitrarily classified its outstanding Agri Loan as âFraudâ liability in May 2015. Subsequently, after following due process and obtaining approvals, including but not limited to obtaining specific permission from the Reserve Bank of India (RBI) for conversion of loan liability, and in consultation with all other Consortium Lenders, sanctioned and disbursed a corporate loan in February/June 2016 for liquidating the Agri Loans. In addition, in an application filed by e-OBC at Debt Recovery Tribunal, Lucknow confirming simultaneous closure of the matter and a consented decree was passed.

E-OBC, had arbitrarily initiated recovery actions against the Company for the restructured corporate loan including an application filed under Section 7 of Insolvency and Bankruptcy Code, 2016 before Honâble National Company Law Tribunal (NCLT), Allahabad Bench. PNB had also filed an similar application before NCLT, Allahabad Bench for recovery of their dues, causing a serious threat to the value available to all the stakeholders e-OBC, had declared company and guarantors as Willful Defaulters against which company and guarantors have challenged and contested such declaration in the Honâble Punjab and Haryana High Court at Chandigarh and Court was pleased to Set Aside such impugned order of e-OBC. A Show Cause Notice on Willful Default was issued by Punjab National Bank to company and guarantors. Basis representations made before the screening committee and taking into account that Forensic Audit report, initiated by the Joint Lenders, which was also closed by unanimous consensus in Joint Lenders Meeting including representatives of PNB, stating that there is No Fraud or Willful Default, PNB had kept the declaration of willful default in Abeyance. After Amalgamation PNB had issued another show cause notice to the company and Guarantors, including exposure of e-OBC, wherein default was identified as Willful and a personal hearing was granted. Company and Guarantors has contested such identification and submitted written submission stating that allegations are baseless and requested to provide all the documents on the basis which such conclusions are arrived at, under the expert legal opinion. It was further apprised, that company has submitted debt resolution proposal with all the commercial lenders PNB had declared the account as Fraud due to Harmonisation with e- OBC, company had challenged such declaration in Honâble Delhi High Court and matter is being Sub-Judice. Earlier e-OBC had also filed a criminal complaint with the investigating agency declaring the credit facilities as âSuspected Fraudâ. The Company has denied any fraud on its part, provided adequate documentation for the same, while reiterating its commitment for repayment to all the lenders, basis future cash flows, monetisation of assets, internal accruals etc. Against such criminal complaint, the enforcement directorate had passed an attachment order on certain assets of the Company to the extent of '' 109.80 crores, against which the Company has preferred an appeal with the appropriate authority and the matter is sub-judice. Enforcement Directorate had proceeded to take the constructive possession of the Attached Property on which an Interim Stay has been granted by the Honâble Appellate Tribunal.

The Company is continuing to pursue a comprehensive debt resolution proposal with all the lenders. Commercial lenders have shown their inclination to accept the debt resolution proposal and accepted the Earnest Money offered, while the debt realignment proposal was submitted to other lenders against which the company had initiated the repayments, pending approval of respective lenders. The revised and improved debt resolution proposal given to commercial lenders on a bilateral basis is under consideration by the commercial lenders, based on which Honâble NCLT Bench, Allahabad has adjourned the hearing.

8 The Board of the Simbhaoli Power Private Limited (SPPL), a 51% subsidiary, has not yet approved its accounts for the financial years 2022-23 and 2023-24. The Company has exposure aggregating to '' 18,925.45 Lakhs in the aforesaid subsidiary, by way of investments, trade and receivables, accumulated interest on debentures. As per audited financial statements for the Financial Year 2021-22, the company had incurred losses on account of reduction in power tariffs and its auditors had reported the existence of material uncertainty that might cast significant doubts about its ability to continue as a going concern and also drawn attention on the possible impairment in the carrying amount of property, plant and equipment. The management is of the view that sufficient efforts are being undertaken to make the operations of the said subsidiary financially viable in the foreseeable future so as to recover the carrying amount of investments, trade and other receivables, and accumulated interest and the impairment, if any exists, is of temporary nature and accordingly, no provision has been considered necessary.

9 The credit facilities availed by the Company have been classified as non-performing assets (NPA) by all the lenders and interest thereon is not being charged to the loan accounts by commercial lenders as per RBIâs circular. The Company has submitted comprehensive debt resolution proposals with all the lenders to commensurate with its future cash flows including infusion of funds by strategic investor, promoters, internal accruals, monetization of assets etc. which contemplates the total waiver of interest concession in repayment of principal amount. Commercial lenders have accepted the Earnest Money Deposit (EMD) offered in consonance with the Debt Resolution Proposal. Accordingly, the estimated interest expenses on credit facilities pertaining to commercial lenders, for the year ended March 31, 2024 amounting to '' 22,144.56 Lakhs (Previous Year '' 19,018.54 Lakhs) has not been recognized in the statement of profit and loss account. An estimated accumulated amount of '' 1,11,092.59 Lakhs towards accrued interest has not been provided for in the books of accounts as of March 31,2024.

9.i) Reconciliation of quarterly bank returns Note for discrepancies :

The Bank returns were prepared and filed before the completion of all financial statement closure activities including Ind AS related adjustments/ reclassifications, as applicable, which led to these differences between the final books of accounts and the bank return which were based on provisional books of accounts. Further difference also arises on account of different valuation methodology adopted for valuing the finished goods stock in the books and for the purpose of reporting in the bank return. In the books, stock of finished goods is recorded at lower of cost or net realisable value but for bank purposes it is taken at net realisable value which is determined as per bank norms.

iv) In pursuance of the provisions of Section 197 and other applicable provisions of the Companies Act, 2013,the Board of Directors of the Company had re-appointment of Ms. Gursimran Kaur Mann, as Managing Director of the Company w.e.f. August 02, 2021 and Mr. Sachchida Nand Misra as Chief Operating Officer and Whole Time Director w.e.f. September 18, 2021 for a period of 2 years The Company had also approached the lenders for acceding consent for payment of the remuneration to MD and COO & WTD. The Special Resolutions were passed at the 10th Annual General Meeting (AGM) held on September 27, 2021. Lenders with majority share in outstanding debt have provided their consent to pay the remuneration to above named persons. The Company is actively pursuing with other lenders for obtaining their consent, having belief that consent will be received in due course, and payment of remuneration has been made from the date of re-appointment, as stipulated by the majority of lenders led by the State Bank of India till March 31,2024 amounting to '' 301.82 lacs (Including '' 59.27 Lacs for FY:2023-24) . The details of remuneration paid during the financial year to the Managing Director, Chief Operating Officer and Whole Time Director and Key Management Personnel are as under :-

* The said amount does not include amount in respect of gratuity & leaves as the same are not ascertainable.

11 Segment reporting

i) Operating segments:

The companyâs operating segments are business segments, viz. sugar and alcohol, basis which chief operating decision maker (CODM) evaluates the companyâs performance and allocates resources

ii) Geographical segments:

Since the Companyâs activities/operations are primarily within the country and considering the nature of products it deals in, the risks and returns are same and as such there is only one geographical segment.

iii) Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 2 above the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include income taxes. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two or more segments is allocated to the segments on a reasonable basis.

â¢ Risks related to defined benefit plans:

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary overtime. Thus, the Company is exposed to various risks in providing the above benefits which are as follows:

> Interest rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

> Liquidity Risk: This is the risk that the Company is not able to meet the short-term benefit payouts. This may arise due to non availabilty of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

> Salary Escalation Risk: The present value of the above benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

> Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

> Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of '' 20,00,000).

> Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

> Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Note:- The above is a standard list of risk exposures in providing the above benefit. The Company is advised to carefully examine the above list and make suitable amendments (including adding more risks, if relevant) to the same before disclosing the above in its financial statements.

â¢ Method and Assumptions related terms:

> Discount Rate: Discount rate is the rate which is used to discount future benefit cash flows to determine the present value of the defined benefit obligation at the valuation date. The rate is based on the prevailing market yields of high quality corporate bonds at the valuation date for the expected term of the obligation. In countries where there are no such bonds, the market yields at the valuation date on government bonds for the expected term is used.

> Salary Escalation Rate: The rate at which salaries are expected to escalate in future. It is used to determine the benefit based on salary at the date of separation.

> Attrition Rate: The reduction in staff/employees of a company through normal means, such as retirement and resignation. This is natural in any business and industry.

> Mortality Rate: Mortality rate is a measure of the number of deaths (in general, or due to a specific cause) in a population, scaled to the size of that population, per unit of time.

> Projected Unit Credit Method: The Projected Unit Credit Method (sometimes known as the accrued benefit method pro-rated on service or as the benefit/years of service method) considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. The Projected Unit Credit Method requires an enterprise to attribute benefit to the current period (in order to determine current service cost) and the current and prior periods (in order to determine the present value of defined benefit obligations).

19 Financial risk management objectives

The Companyâs principal financial liabilities comprise loans and borrowings, trade payables and other payables. The main purpose of the financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, trade and other receivables and cash and bank balances that derive directly from its operations. The Company also holds investments in equity shares and debentures of its subsidiaries.

The Companyâs activities expose it mainly to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.

i) Credit risk

a. Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. Company is exposed to credit risk from trade receivables and deposits with banks. To manage this, Company periodically assesses the financial reliability of customers, taking into account factors such as credit track record in the market and past dealings with the Company for extension of credit to customer. Outstanding customer receivables are regularly monitored. Concentrations of credit risk are limited as a result of the Companyâs large and diverse customer base. Company has also taken advances and security deposits from its customer / agents, which mitigate the credit risk to an extent. The ageing of the trade receivables is given below:

b. The impairment analysis is performed at each balance sheet date on individual basis for major clients. In additions a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The company makes specific provisions @100% / write offs in respect of major customers based on its previous experiences and increase in credit risks. The company makes general provisions for lifetime expected credit loss in respect of receivables @ 50% on the amount of receivables overdue for more than 180 days and 25% on the amount of receivable overdue for more than 90 days to 180 days.

c. Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which term deposits are maintained. Generally, term deposits are maintained with banks with which Company has also availed borrowings.

ii) Liquidity risk

Liquidity risk is the risk that a company may encounter difficulties in meeting its obligations associated with financial liabilities that are settled by delivering cash or other financial assets. Since the Company is making continuous losses, presently it monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs. The table below provides undiscounted cash flows towards financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

iii) Market risk

The company is exposed to the risk of movements in interest rates, inventory price and foreign currency exchange rates that affects its assets, liabilities and future transactions. Market risks comprises of four types of risks such as:

a) Interest rate risks

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs borrowings obligations with floating interest rates.

b) Commodity risk

Sugar industry being cyclical in nature, realisations get adversely affected during downturn. Higher cane price or higher production than the demand ultimately affect profitability. The Company has partly mitigated this risk adopting integrated business model by diversifying into distillation, for better price realisation of the by-products.

c) Foreign exchange risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

The Companyâs exposure to the risk of changes in foreign exchange rates is limited to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency), which are not material.

ii) Fair Value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognized and measured at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Following methods and assumptions used to estimate the fair values:

Fair value of cash and cash equivalents and short term deposits, trade and other short term receivables, trade payables, short term borrowings and other current financial assets and liabilities carried at amortized cost is not materially different from its carrying cost, largely due to the short-term maturities of these financial assets and liabilities Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other that quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There is no transfer from one level to another level during the year.

23 Additional regulatory information

i) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

v) There are no proceedings against company, being the Company registered under "th e Act" , th a t h ave be e n i n itiated or pending against them for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

vi) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, sea rch o r s u rve y o r an y other relevant provisions of the Income Tax Act, 1961

vii) The company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs, and the related parties(as defined under Companies Act, 2013), either severally or jointly with any other person, that are:

a) repayment of demand; or

b) granted without specifying any terms or period of repayment.

viii) No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of The Companies Act,2013.

24 Details of loan and advances given, investment made and securities provided as required to be disclosed as per provisions of Section 186 (4) of the Companies Act, 2013 have been disclosed in respective heads.

25 In the opinion of Board of Directors,trade receivable,other current financial assets and other current assets have a value on realisation in ordinary course of the company''s business which is at least equal to the amount at which they are stated in the balance sheet.

26 The Board of Directors at its meeting held on 29th May,2024 has approved the Financial Statements for the year ended March 31,2024.

Mar 31, 2023

R. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. Provisions are not recognized for future operating losses

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or nonoccurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote.

A contingent asset is not recognized but disclosed, when possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

S. Operating Segments

The Companyâs operating segments are established on the basis of those components of the Company that are evaluated regularly by the Board of Directors (the âChief Operating Decision Makerâ as defined in Ind AS 108 - âOperating Segmentsâ), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the different risks and returns and the internal business reporting systems.

Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as âUnallocableâ.

Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Assets and Liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as âUnallocableâ.

T. Cash Flow Statement

"Cash flows are stated using the indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of incomes and expenses associated with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated.â

4. "For the year ended March 31, 2023 and in previous years, due to higher raw material cost i.e. sugarcane costs (SAP) fixed by State government and relatively lower sales realization of finished sugar, adverse demand & supply scenario, and other eternal factors, the Company had continuously incurred huge cash losses resulting in complete erosion of its net worth, rendering the Company unable to meet payment obligations towards its lenders as well as to the sugarcane farmers in terms of their respective agreements and understanding. All the production units of the Company are operational and continue to operate at sub-optimum levels on year on year basis while consistent efforts are being made for improvement in operational efficiency viz. improvement in sugar recovery, reduction in overheads and reduction in other operational and administrative costs etc. However, due to lack of required working capital and no capex being undertaken towards augmentation and modernization, the operations of distillery units /sugar plants is still adversely impacted. Further, the availability of required sugarcane for optimal utilization of production capacities is still a challenge on account of aforesaid reasons. In distillery segment, noninstallation of incineration boilers and other equipmentâs to meet the stringent requirement of Pollution control board is still resulting in curtailed production levels. Further, the expected accrued benefits under the Sugar Industries Promotion policy 2004 has not been yet disbursed by the State Government as the matter is sub-judice.â

Due to default in repayment of credit facilities, lenders to the Company have initiated recovery proceedings at various forums, including filing of applications before the Honâble National Company Law Tribunal (NCLT) under Section 7 of the Insolvency and Bankruptcy Code, 2016 and also filing of recovery proceedings against personal guarantors (Promoters) before NCLT under section 95 of Insolvency and Bankruptcy Code,2016 in addition to approaching Debt Recovery Tribunals in Delhi as well as in Lucknow, Uttar Pradesh. One of the lenders had declared the Company and Guarantors to the credit facility, as Willful Defaulters, such impugned order of lender was Set Aside by Honâble Punjab and Haryana High court at Chandigarh, while another lender had started the proceedings to examine the Willful Default and a personal hearing was also granted, basis Companyâs representations the decision is kept in Abeyance. One lender has categorized company with Fraud tag and same is challenged before Delhi High Court. While one of the lenders had initiated recovery proceedings under section 138 of the Negotiable Instrument Act, wherein non-bailable warrants were issued against the erstwhile directors and officials of the Company, which is being contested at the appropriate forum. Against a criminal complaint filed by one of the lenders, the Enforcement Directorate had passed an Attachment Order on certain assets of the Company to the extent of ''109.80 Crore, against which the Company has preferred an appeal before with the appropriate authority and the matter is sub-judice. The Enforcement Directorate had proceeded to take the Constructive Possession of the Attached Property on which an Interim Stay has been granted by the Honâble Appellate Tribunal.

The Company is continuing to pursue a comprehensive debt resolution proposal with all the lenders. Commercial lenders have shown their inclination to accept the debt resolution proposal and accepted the Earnest Money offered thereof, while Debt realignment proposal was submitted to other lenders against which the company had initiated the repayments, pending approval of respective lenders. Revised and improved debt resolution proposal given to commercial lenders on bilateral basis is under consideration by the commercial lenders, while application filed with Honâble NCLT Bench, Allahabad is being heard. The Commercial Lenders have also appointed two independent valuers for the valuation of the assets of the Company.

Considering the steps initiated for achieving turnaround of the Company and sugar sector, and continuing manufacturing operations in near foreseeable future with improved operational efficiency, these financial results are continued to be presented on Going Concern basis, which contemplates realization of assets and settlement of liabilities, in the normal course of business. Accordingly, property, plant and equipmentâs are continued to be stated at carrying amount without testing for impairment, pending receipt of the final valuation reports from the two independent valuers appointed by the Commercial Lenders.

5 Contingent liabilities and commitments (to the extent not provided for): i) Capital and other commitment

Estimated value of contracts (net of advances) remaining to be executed on Capital account '' 351.00 lacs (Previous year '' 189.14 lacs). The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreements in normal course of business. The Company does not have any other long-term commitments or material non-cancellable contractual commitments / contracts, which may have a material impact on the financial statements.

In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the ground that there are fair chances of successful outcome of the appeals.

iii) With the introduction of GST w.e.f. July 1,2017, the purchase tax earlier levied on ENA subsumed therein. Since under GST no tax was notified to be paid on the sale of ENA, no tax was paid by Industry on its sale. Later on, the State Government notified 5%.VAT rate on the sale of ENA w.e.f. December 09, 2019. Accordingly the industry, including the company started paying VAT @ 5% w.e.f December 09, 2019.However, the commercial tax Department of Uttar Pradesh raised a demand of '' 1933.47 lacs on the company based on the tax rate of 32.5% of ENA ,in respect of sales made during the periods July 1,2017 to March 31,2020. The Company filed appeal against the aforesaid demand before Commercial Tax Tribunal - Ghaziabad, and deposited '' 206.22 lacs under protest against the aforesaid demand. The tribunal had stayed the recovery of balance demand till the disposal of appeal. Since, the matter is subjudice and the company expects a favorable decision on the matter, no provision has been made against the aforesaid demand.Further the payment if any will be required to be made for the VAT liability ,the same will be reimbursed by the buyers as per agreement with them.

vi) The Honâble Allahabad High Court in the case of PIL Rashtriya Kisan Mazdoor Sangathatan Vs State of Uttar Pradesh passed final order, directing the cane commissioner to decide afresh the issue as to whether the Sugar Mills are entitled for waiver of interest of delayed payment of sugarcane price for the season 2012-13,2013-14 and 2014-15 under the provision of section 17(3) of the U.P Sugarcane (Regulation of Supply and Purchase) Act,1953.Thereafter,in an Contempt application filed before High court and its follow up proceeding, the cane commissioner filed an affidavit specifying interest rates on delayed payment of cane price to be paid by Sugar Mills. The company had also received a notice for payment of interest on delayed payment of cane price for Sugar season 2012-13 is pursuant to the aforesaid order. The Company made representation against the said demand notice. Subsequently, State Government has filed modification application before and Cane commissioner also filed SLP with the Supreme Court in this matter which is pending for adjudication. Considering the above facts and based on the the past practice of waiver of interest by the State Government, no provision has been made in respect of the interest payable on delayed payment of cane price for the aforesaid sugar seasons and also for subsequent sugar seasons. Since no demand has been raised by the Government, except for the sugar season 2012-13, the total amount of interest payable on delayed payment of cane price up to March 31,2023 and not provided in the accounts could not be quantified.

v) Cane Societies were in dispute with the State Government of Uttar Pradesh with regards to retrospective waiver of society commission payable by sugars mills for the Sugar Season 2012-13, 2014-15 and 2015-16 as a part of its relief package to Sugar Industry. The Honâble Allahbad High Court vide order dated 21-12-2017 decided the matter in favor of Cane Societies and against the aforesaid order U.P Sugar Mill Association filed SLP before Honâble Supreme Court. The matter is still pending for the further adjudication. Based on the legal review of the facts, the management concluded that the possibility of crystallization of liability in the present case is remote and according no provision has been made in accounts.

vi) Income Tax Department has raised demand of '' 469.76 lacs and of '' 31,983.39 lacs for AY 2016-17 and 2017-18 while making assessment U/s 147 of the Act in the name of erstwhile Simbholi Sugars Ltd.,which was amalgameted with the company effective from April 1,2015 and also levied penalty of '' 370.13 lacs and '' 7,507.84 lacs for AY 2016-17 & 2017-18.The company has preferred appeal against the aforesaid orders before CIT(Appeal) and is confident that all the aforesaid demand will be queshed as the erstwhile Simbholi Sugars Ltd.,ceased to exist w.e.f. April 1,2015 and the income assessed in its hands has already been offerred to tax by the company in the respective assessment yea Since, there are remote chances of crystalisation of the aforesaid demands,the same has not been provided for and also not included in the above stated details of contingent liabilities.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

7 Consequent to revision in the wage rates of employees covered under Wage Board with retrospective effect from October 1, 2018, the company has accounted for additional liability of '' 806.88 lacs under Employees Benefits expenses year ended March 31,2023.

8 Certain banks had advanced Agri loans to sugarcane farmers through the erstwhile Simbhaoli Sugars Limited (ESSL) under the management and collection agreements and were provided Corporate Guarantee and post-dated cheques as security. These loans were to be repaid by the Company to the respective lenders from the dues payable to sugarcane farmers against their supplies to the sugar mill, but due to the overall downturn in the sugar industry and primacy to pay sugarcane dues in priority to any other dues/ payments, the Company could not repay these loans on their due dates. Company had submitted a financial restructuring plan to its lenders in FY 2014-15. As per sanction of CDR-EG dated February 02, 2016 all the outstanding loans/ dues were proposed to be converted into term loans, subject to the consent of respective commercial lenders Two of the commercial lenders/ banks had converted their outstanding loans dues into term loan in the financial year 2016-2017 while one of the commercial lender/ bank had converted their dues into term loan in financial year 2017-18.

E-OBC, had arbitrarily initiated recovery actions against the Company for the restructured corporate loan including an application filed under Section 7 of Insolvency and Bankruptcy Code, 2016 before Honâble National Company Law Tribunal (NCLT), Allahabad Bench. PNB had also filed an similar application before NCLT, Allahabad Bench for recovery of their dues, causing a serious threat to the value available to all the stakeholders e-OBC, had declared company and guarantors as Willful Defaulters against which company and guarantors have challenged and contested such declaration in the Honâble Punjab and Haryana High Court at Chandigarh and Court was pleased to Set Aside such impugned order of e-OBC. A Show Cause Notice on Willful Default was issued by Punjab National Bank to company and guarantors Basis representations made before the screening committee and taking into account that Forensic Audit report, initiated by the Joint Lenders, which was also closed by unanimous consensus in Joint Lenders Meeting including representatives of PNB, stating that there is No Fraud or Willful Default, PNB had kept the declaration of willful default in Abeyance. After Amalgamation PNB had issued another show cause notice to the company and Guarantors, including exposure of e-OBC, wherein default was identified as Willful and a personal hearing was granted. Company and Guarantors has contested such identification and submitted written submission stating that allegations are baseless and requested to provide all the documents on the basis which such conclusions are arrived at, under the expert legal opinion. It was further apprised, that company has submitted debt resolution proposal with all the commercial lenders PNB had declared the account as Fraud due to Harmonisation with e- OBC, company had challenged such declaration in Honâble Delhi High Court and matter is being Sub-Judice. Earlier e-OBC had also filed a criminal complaint with the investigating agency declaring the credit facilities as âSuspected Fraudâ. The Company has denied any fraud on its part, provided adequate documentation for the same, while reiterating its commitment for repayment to all the lenders, basis future cash flows, monetisation of assets, internal accruals etc. Against such criminal complaint, the enforcement directorate had passed an attachment order on certain assets of the Company to the extent of ''109.80 crores, against which the Company has preferred an appeal with the appropriate authority and the matter is sub-judice. Enforcement Directorate had proceeded to take the constructive possession of the Attached Property on which an Interim Stay has been granted by the Honâble Appellate Tribunal.

The Company is continuing to pursue a comprehensive debt resolution proposal with all the lenders The majority of commercial lenders have shown their inclination to accept the debt resolution proposal and accepted the âEarnest Moneyâoffered thereof while Debt realignment proposal was submitted with other lenders against which SSL had initiated the repayments, pending approval of respective lenders Revised and improved debt resolution proposal given to commercial lenders on bilateral basis is under consideration while application filed with Honâble NCLT Bench, Allahabad is being heard.

9 The credit facilities availed by the Company have been classified as non-performing assets (NPA) by all the lenders and interest thereon is not being charged to the loan accounts by commercial lenders as per RBIâs circular. The Company has submitted comprehensive debt resolution proposals with all the lenders to commensurate with its future cash flows including infusion of funds by strategic investor, promoters, internal accruals, monetization of assets etc. which contemplates the total waiver of interest concession in repayment of principal amount. Commercial lenders have accepted the Earnest Money Deposit (EMD) offered in consonance with the Debt Resolution Proposal. Accordingly, the estimated Interest expenses on credit facilities pertaining to commercial lenders, for the year ended March 31, 2023 amounting to '' 19,018.54 lacs respectively (previous year ended March 31,2022 amounting to '' 17,013.85 lacs respectively) has not been recognized in statement of profit and loss account. An accumulated estimation amount of '' 88,948.03 lacs towards accrued interest has not been provided for in the books of accounts as on March 31,2023.

9.i) Reconciliation of quarterly bank returns Note for discrepancies :

However there is no material difference in reporting the quantity of stock in the bank returns as compared to books of accounts.

10 Related Party disclosures under IND AS 24

i) Name of related parties and description of relationship:

Subsidiaries:

- Integrated Casetech Consultants Private Limited (ICCPL)

- Simbhaoli Power Private Limited (SPPL)

- Simbhaoli Speciality Sugars Private Limited (SSSPL)

Key Management Personnel (KMP):

- Mr. Gurmit Singh Mann - Chairman

- Mr. Gurpal Singh - Director

- Mr. Sanjay Tapriya - Director (ceased to be key management personnel w.e.f. November 01,2021)

- Ms. Gursimran Kaur Mann - Managing Director

- Mr. Sachchida Nand Misra - Chief Operating Officer & Whole time Director

- Mr. H. P. Kain- Independent Director

- Mr. Atul Mahindru - Independent Director

- Mr. Shyam Sunder - Independent Director

- Justice (Retd.) C.K. Mahajan - Independent Director

- Mr. Aseem Sehgal- Independent Director

- Mr. Dayal Chand Popli - Chief Financial Officer

- Mr. Kamal Samtani - Company Secretary (ceased to be key management personnel w.e.f. March 31,2023)

- Mr. Subham Kandhway - Company Secretary w.e.f May 26, 2023

Relatives of Key management personnel:

- Mr. G.M.S. Mann (HUF)

Enterprise over which key management personnel exercise significant influence:

- Dholadhar Developers Private Limited

''(enterprise over which Mr. Gurmit Singh Mann and Ms. Gursimran Kaur Mann exercise significant influence)

- Dholadhar Investments Private Limited

(enterprise over which Mr. Gurmit Singh Mann and Ms. Gursimran Kaur Mann exercise significant influence)

- Mahajan Law House

(enterprise over which Justice (Retd.) C.K. Mahajan exercise significant influence)

Trusts:

- Simbhaoli Sugars Limited Officer''s Superannuation Scheme -Simbhaoli Sugars Limited Employee Gratuity Scheme -Simbhaoli India Foundation

11 Segment reporting

i) Operating segments:

The companyâs operating segments are business segments, viz. sugar and alcohol, basis which chief operating decision maker (CODM) evaluates the companyâs performance and allocates resources

ii) Geographical segments:

iii) Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 2 above the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities

c) Inter segment sales

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

â¢ Risks related to defined benefit plans:

> Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

> Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

â¢ Method and Assumptions related terms:

> Salary Escalation Rate: The rate at which salaries are expected to escalate in future. It is used to determine the benefit based on salary at the date of separation.

> Attrition Rate: The reduction in staff/employees of a company through normal means, such as retirement and resignation. This is natural in any business and industry.

> Mortality Rate: Mortality rate is a measure of the number of deaths (in general, or due to a specific cause) in a population, scaled to the size of that population, per unit of time.

14.i) Following are the particulars of disputed dues on account of sales tax (trade tax), excise duty,service tax and Income Tax matters that have not been deposited by the Company as at March 31,2023.

ii) Fair Value hierarchy

Following methods and assumptions used to estimate the fair values:

Level 2: Inputs other that quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

There is no transfer from one level to another level during the year.

21 The Board of the Simbhaoli Power Private Limited (SPPL), a 51% subsidiary with a joint venture with Sindicatum Bagasse India Pte Limited, has not yet approved its accounts for the financial year 2022-23 due to accounting of certain transactions with the company since last 3 years, based on its own assumption, which have been objected by the company as these are not in accordance with the terms stipulated under Joint Venture agreement executed by both the parties at the time of formation of joint venture in FY 2012-13. Pending resolution of the differences, SPPL has also stopped sharing copy of ledger accounts of the company for reconciliation and confirmation. The company continued to pass accounting entries of the transactions entered into with SPPL as per the terms of joint venture agreements. However, due to non-availability of confirmation and copy of ledger accounts, the amount in disputes with SPPL could not be quantified

24 Additional regulatory information

i) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

ii) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

v) There are no proceedings against company, being the Company registered under "the Act", that have been initiated or pending against them for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

vi) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

a) repayment of demand; or

b) granted without specifying any terms or period of repayment.

viii) No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of The Companies Act,2013.

25 Details of loan and advances given, investment made and securities provided as required to be disclosed as per provisions of Section 186 (4) of the Companies Act, 2013 have been disclosed in respective heads.

In terms of our report attached For and on behalf of the Board of Directors

For MITTAL GUPTA & CO.

Chartered Accountants

Gurmit Singh Mann Gursimran Kaur Mann Sachchida Nand Misra

Chairman Managing Director Chief Operating Officer

DIN - 00066653 DIN - 00642094 DIN - 06714324

B L GUPTA Dayal Chand Popli Subham Kandhway Virendra Kumar Singh

Chief Financial Officer Company Secretary AGM-Accounts

(M. No. - 073794) ^{FCMA - 12257 F - 10757}

Place : Kanpur (U.P) ^{Place : Simbhaoli} ,^Hap^{ur (U}.^P)

Date : May 26,2023 ^{Date : May 26},²⁰²³

Mar 31, 2018

1. Background

Simbhaoli Sugars Limited (âthe Companyâ) (previously known as Simbhaoli Spirits Limited) having CIN No. L15122UP2011PLC044210 is a public limited company under the provisions of the Companies Act, 2013 incorporated and registered with Registrar of Companies, Kanpur Uttar Pradesh on April 04, 2011. Currently equity shares of the Company are listed at BSE and NSE. The Honâble High Court of Judicature at Allahabad has sanctioned the Scheme of Amalgamation of Erstwhile Simbhaoli Sugars Limited (ESSL), the Transferor Company with the Company, the Transferee Company w.e.f. April 01, 2015 (the Appointed Date) and consequent thereto, the entire business undertakings of ESSL, stands transferred to and vested in the Company, as a going concern with effect from the Appointed Date. The Company has now three sugar complexes - Simbhaoli (western Uttar Pradesh), Chilwaria (eastern Uttar Pradesh) and Brijnathpur (western Uttar Pradesh) having an aggregate crushing capacity of 19,500 TCD. The Company is technology driven with a business mix that spans from refined (sulphur less) sugar, specialty sugars, extra neutral alcohol (ENA), ethanol and bio-manure. The Company is engaged in sugar refining (Defeco Remelt Phosphotation and Ion Exchange technology), high value, niche products (specialty sugars) and clean energy (ethanol). The Company sells international standard refined, pharmaceutical grade and specialty sugars to the retail and bulk institutional consumer segments.

The Company is operating its different businesses through separate subsidiaries, the details are given below:

2.1 Basis of preparation and presentation

i) Statement of Compliance

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act) read with the Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and other relevant accounting principles generally accepted in India.

The financial statements up to year ended March 31, 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). Previous year numbers in the financial statements have been restated in accordance with Ind AS. Reconciliations and descriptions of the effect of the transition have been summarized in Note No. 26.

These financial statements are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is April 01, 2016. Refer Note No.26 for the details of first-time adoption (Ind AS 101) exemptions availed by the Company and an explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.

ii) Basis of preparation

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities (refer accounting policy regarding financial instruments) and assets for defined benefit plans that are measured at fair value and less cost of sale wherever require. The methods used to measure fair values are discussed further in notes to financial statements.

iii) Functional and presentation currency

These financial statements are presented in Indian rupees (INR), which is company functional currency. All amounts have been rounded off to nearest in lacs unless otherwise indicated.

iv) Operating Cycle

All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in Schedule III to the Companies , Act, 2013 based on the nature of services rendered and their realization in cash and cash equivalents.

2.2 Use of Estimates and management judgements

The preparation of financial statements in conformity with Indian Accounting Standards (Ind AS) requires management of the company to make judgments, estimates and assumptions that affect the reported amount of revenues, expenses, assets, liabilities and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date.

The estimates and managementâs judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

The areas involving critical judgement are as follows:

i) Material uncertainty about going concern:

In preparing financial statements, management has made an assessment of Companyâs ability to continue as a going concern. Financial statement is prepared on a going concern basis. The management is aware, in making its assessments,of material uncertainties related to events or conditions that may cast significant doubt upon the companyâs ability to continue as a going concern. Further details on going concern are disclosed in Note No. 4.

ii) Fair value measurements of financial instruments:

When the fair value of financial assets and liabilities recorded in the Balance sheet cannot be measured based on the quoted market price in the active markets, their fair value is measured using valuation technique. The input to these model is taken from the observable market where possible, but if this is not feasible, a review of judgment is requiring this establishing fair values.Changes in assumption relating to these assumptions could affect the fair value of financial instrument.

iii) Employee benefit plans:

The cost of the defined benefit plans and other long-term employee benefits and the present value of the obligation thereon are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, attrition and mortality rates. Due to the complexities involved in the valuation and its longterm nature, obligation amount is highly sensitive to changes in these assumptions.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans, the management considers the interest rates of government bonds. Future salary increases are based on expected future inflation rates and expected salary trends in the industry. Attrition rates are considered based on past observable data on employees leaving the services of the Company. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes.

iv) Recoverability of trade receivables:

The Company has a stringent policy of ascertaining impairments, if any, as result of detailed scrutiny of major cases and through determining expected credit losses. Despite best estimates and periodic credit appraisals of customers, the Companyâs receivables are exposed to delinquency risks due to material adverse changes in business, financial or economic conditions that are expected to cause a significant change to the partyâs ability to meet its obligations. All such parameters relating to impairment or potential impairment are reviewed at each reporting date.

v) Provision and contingencies:

The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, âProvisions, Contingent Liabilities and Contingent Assetsâ. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change.

vi) Useful life and residual value of plant, property equipment and intangible assets:

The useful life and residual value of plant, property equipment and intangible assets are determined based on technical evaluation made by the management of the expected usage of the asset, the physical wear and tear and technical or commercial obsolescence of the asset. Due to the judgements involved in such estimations, the useful life and residual value are sensitive to the actual usage in future period.

Notes:

1. The finance cost on specific borrowings capitalized during the year amounted to â Nil (Previous year â Nil). However the Company has also capitalized borrowing cost on its general borrowing amounting to â Nil (Previous year Rs.23.94 lacs) using weighted average capitalization rate of Nil % (Previous year- 12%) Per annum.

2. The company has availed loans from banks and other entities against securities of aforesaid assets. The details of charge created, security terms against borrowing are stated at Note No. 10.

3. Refer Note No.6 (iii) for information contractual commitments for acquisition of property,plant & equipment.

# First pari passu charge on pledge of 19,29,655 (March 31, 2017: 19,29,655; April 01, 2016: 19,29,655) equity shares of the Company in favour of bankers of Simbhaoli Power Private Limited.

(a) Due to continuous losses, Uniworld Sugars Private Limited (USPL), a joint venture of the Company, discontinued its operations and decided to dispose of its assets of Sugar Refinery business. The Company had made investments in the equity shares of USPL which were pledged (first pari passu charge) as on March 31, 2018: 2,90,11,770 (March 31, 2017: 2,90,11,770; April 01, 2016: 2,90,11,770) with the USPL term lenders as a security for USPL term loans. Out of total 2,90,11,770 equity shares pledged, one of the lender of USPL has invoked pledge in respect of 1,12,04,708 equity shares and transfer to its own account.

The Company has valued its investment in USPL as on March 31, 2018 at Rs.2,322.29 lacs on the basis of fair realisable value of assets of refinery business and inter-se arrangement with the co-venture. On the application of one of the vendors of the USPL, Corporate Insolvency Resolution Process (CIRP) has been initiated against USPL by the Honâble National Company Law Tribunal, Allahabad Bench by application no. (IB) 120/ALD of 2017 dated May 29, 2018. It is expected that the entire dues of the term lenders will be paid out of the liquidation of the assets of USPL, and consequently the aforesaid shares shall be restored back to the Company, Therefore, no adjustment has been made in the accounts in respect of revocation of part of pledged shares as at March, 31, 2018.

(b) Out of total summary of equity shares of USPL as mentioned here above, 10,00,000 (March 31, 2017: 10,00,000; April 01, 2016: 45,15,000) equity shares had been agreed to be transferred in favor of the Company by the Board of Directors of USPL in its meeting held on March 28, 2013, but due to shares being pledged with IDBI, the effect has not been taken into the records of the depository participant of the Company.

D) The Company has alloted 3,74,79,020 Equity shares of Rs.10 each aggregating Rs.3,747.90 lacs during the financial year 2015-16 on Amalgamation of Erstwhile Simbhaoli Sugars Limited without payment being received in cash..

E) The Company has allotted 18,00,000 equity shares of Rs.10/- each at a premium of Rs.22.10 per share on March 29, 2018 to the specified promoters and directors on conversion of 18,00,000 equity warrants.

On December 22, 2017, 50,00,000 equity warrants of face value of Rs.32.10 per warrant were allotted to specific promoters and directors of the Company, which are to be converted within 18 months of allotment into Equity Shares of Rs.10 each at a price of Rs.32.10 (including premium of Rs.22.10) per share. The Company, on the request of the specified promoters and directors, has appropriated the amount payable to them aggregating to Rs.789.92 lacs in form of outstanding unsecured loans (including interest thereon) as on the date of allotment toward the application money Rs.8.025 per warrant aggregating Rs.401.25 lacs.

The balance outstanding loan of Rs.388.67 lacs along with further receipt of Rs.44.68 lacs has been appropriated towards balance due of Rs.22.975 per warrant in respect of 18,00,000 warrants. The Company as further received Rs.268.97 lacs towards part payments of balance due on remaining warrants.

The break-up of paid up amount of remaining 32,00,000 Equity Warrants of face value of Rs.32.10 per warrant is as under:

3. The Indian sugar industry has been facing difficulties on account of highest ever sugar production in the country in the sugar year 2017-18 resulting in steep fall in sugar prices and significant value erosion in the market price of molasses. This along with increase in sugarcane prices and closure of distilleries of the Company as well as many other distilleries across the state by environmental agencies, has caused significant under recovery of cost of production. These factors have adversely affected the financial position of the sugar industry and of the Company as well. As a result, the company has incurred huge cash losses during the year resulting in increase in cane arrears and default in payment of interest and principal dues of the lenders. Further, consequent to the scrapping of all existing restructuring schemes by the Reserve Bank of India (RBI) vide their Notification No. 531 dated February 12,2018, the debt realignment proposal of the Company to realign the debts in accordance with the available future cash flow of the company, cannot be further deliberated upon by the lenders under Joint Lender Forum. The Company has approached its lenders for debt resolution of its outstanding debts in accordance with the available future cash flow of the Company for servicing its sustainable debt after waiver and remission of part of existing principal and unpaid interest, which is under consideration by the bankers.

To revive the sugar industry, the Central and State Governments have already initiated and are considering various favourable steps including specific support for liquidation of cane arrears, fixing obligation for export to reduce the sugar inventory, increase in the realization of ethanol price, linking of sugarcane price with sugar realization etc. All these measures are expected to turnaround operations of the sugar industry on sustainable basis. The Company has also initiated various steps for further de-risking its business and resumed distillery operations, after meeting all compliances, in the last quarter of fi nancial year. The company is also confident of receiving a significant amount through subsidy from State Government under the Erstwhile Sugar Promotion Policy, 2004, which had been earlier withheld by the State Government by scrapping the scheme, as recently Honâble Supreme Court has directed the State Government to pay the subsidy as per announced scheme to the eligible entities.

In view of the aforesaid internal and external measures, the management is confident that the Company will continue to operate all its manufacturing facilities at optimum levels and will earn sufficient cash flow from its business operation in future to serve the debts as per proposed resolution and to improve its liquidity. Accordingly, these financial statements have been prepared on a going concern basis which contemplates realization of assets and settlement of liabilities in the normal course of business.

4. Under the scheme of amalgamation, the Company has acquired rights under finance lease arrangement with Simbhaoli Power Private Limited for one of the equipments at its Simbhaoli Sugar Division.

Reconciliation of future minimum lease payments and gross investment in the lease and present value of minimum lease payments are as follows:

Disclosure in respect of Non-Cancellable Operating Lease:

The company has taken premises on operating lease for primary lease period of 6 years from the date of lease. The lease period may be further extended and lease rental levy modified as per mutual decision of the parties. Details of future minimum lease payments in accordance with terns agreed as at year end under non-cancellable operating lease are as follows:

The company has given premises on operating lease for primary lease period of 6 years from the date of lease. The lease period may be further extended and lease rental levy modified as per mutual decision of the parties. Details of future minimum lease income in accordance with terms agreed as at year end under non-cancellable operating lease are as follows:

The amount shown in Note No. 6 (i) above represent the best possible estimates arrived on the basis of demand raised by the claimant and does not include interest if any, payable thereon from the date of demand. The uncertainties and timing of the cash flows are dependent on the outcome of different legal processes which have been invoked by the company or the claimants, as the case may be and, therefore cannot be estimated accurately. The Company does not expect any reimbursement in respect of above contingent liabilities.

In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the ground that there are fair chances of successful outcome of the appeals.

ii) Based on expert committee report, the State Government of Uttar Pradesh had waived interest on the delayed payment of cane price for the sugar seasons 2012-13, 2013-14 and 201415. The waiver was challenged by the Rashtriya Kisan Mazdoor Sangathan before the Honâble High Court Allahabad. The said Court has set aside the waiver and remanded back the matter to reconsider it after hearing all Stakeholders. The waiver of interest for the sugar season 2015-16 is also under consideration. However, notice for payment of interest on delayed payment of cane price for the sugar season 2016-17 has been issued against which the industry has made representation for waiver. Pending finalisation, no provision has been made in respect of above mentioned interest and the amount has not been ascertained. Based on the past practice, the management is confident that no interest liability will arise for above mentioned periods and also for the current sugar season.

iii) Capital and other commitment

Estimated value of contracts (net of advances) remaining to be execute on Capital account Rs.211.31 lacs (March 31, 2017: Rs.1,043.31 lacs, April 01, 2016: Rs.39.72 lacs). The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreements in normal course of business. The Company does not have any other long-term commitments or material non-cancellable contractual commitments / contracts, which may have a material impact on the financial statements

5. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act,2006 (MSMED ACT, 2006).

6. The Special Resolution for reclassification of promotersâ category was passed at 6th Annual General Meeting of the members of the Company. Thereafter, an application seeking reclassification of Mr. Gurpal Singh, Mr. Govind Singh Sandhu, Ms. Jai Inder Kaur, Mr. Angad Singh and M/s Pritam Singh Sandhu Associates Private Limited (Collectively referred to as âSandhu Group/ Exiting Promoterâ), from existing promoter group to the public category shareholders, in terms of provisions of regulation 31A (7) of SEBI (LODR) Regulations, 2015, was filed with SEBI/ Stock Exchanges. The approval from SEBI/Stock Exchanges is awaited.

7. ESSL has facilitated Agri loans from four commercial banks to its sugarcane farmers under the management and collection agreements and provided Corporate Guarantee and postdated cheques as security. These loans were distributed to the farmers against the payment to be made to them against supply of sugarcane in earlier years and ESSL facilitating the repayment of these loans along with interest to the banks. As per sanction of CDREG dated February 02, 2016 all the dues outstanding were proposed to be converted into term loans, subject to the consent of respective commercial banks. Two of the commercial banks have converted their dues into term loan in the financial year 2016-2017 and one of the commercial banks have converted their dues into term loan in financial year 2017-18.

Oriental Bank of Commerce (OBC), one of its bank, who has converted agri loan in to term loan as aforesaid in financial year 2016-17 arbitrarily classified its outstanding agriloan as âSuspected Fraudâ liability in March 2015 but subsequently, after following due process, including but not limited to obtaining specific permission from the Reserve Bank of India (RBI), and in consultation with all other Consortium Lenders, it sanctioned and disbursed a term loan in February 2016 for liquidating the agri loans. In addition, in an application filed by OBC at the Debt Recovery Tribunal, OBC confirmed a simultaneous closure of the matter.

During current year, OBC has arbitrarily initiated recovery actions against the Company for the restructured term loan and also filed a criminal complaint with the investigating agency, again declaring the facilities as âSuspected Fraudâ. The Company has denied any fraud on its part, provided adequate documentation for the same, while reiterating its commitment for repayment to all the lenders based on available future cash flows. The Company has sought legal advice in this matter and the legal advisors have opined that there have been various gross omissions and commissions at the banksâ end and that the company should take appropriate action at the relevant forums at the required time. Since the OBC has recalled the loan during the current year, their outstanding dues as at March 31, 2018 has been classified and shown under âOther Current Financial Liabilitiesâ. The dues of OBC as at March 31, 2017 has been classified and shown under âFinancial Liabilities - Borrowing under Non-Current Liabilitiesâ according to restructured terms prevailing on that date.

The dues of other two banks have been classified as âFinancial Liabilities - Borrowing under Non-Current Liabilitiesâ. The principal and interest dues of one bank, who have not yet given its consents, are classified and shown under âFinancial Liabilities - Unsecured Borrowing under Current Liabilitiesâ and âOther Current Financial Liabilitiesâ respectively.

8. The loans availed by the Company have been classified as Non-Performing Assets (NPA) by the lenders and interest thereon is not being charged to the loan accounts as per the applicable practices. As stated in Note No. 4, debt resolution proposal, submitted by the Company, for debts resolution of its outstanding debts in accordance with the available future cash flow of the Company for servicing its sustainable debt is under consideration by the lenders.The debt resolution proposal under consideration with lenders, includes waiver of un-paid interest by certain lenders. The Company is hopeful that un-paid interest on certain loan accounts will be waived to work out sustainable portion of debts. Accordingly, interest expense for the year ended March 31, 2018, amounting to Rs.11,971.59 lacs have not been recognized in the books of accounts. Un-paid interest, recognized in the books of accounts up to the end of March 31, 2017, will be reworked at the time of implementation of debt resolution plan. The terms of repayment, nature of security and overdue, if any, in accordance with existing agreements are as under.

9. Related Party disclosures under Accounting Standard 18

i) Name of related parties and description of relationship: Subsidiaries:

- Simbhaoli Global Commodities DMCC (DMCC)

- Integrated Casetech Consultants Private Limited (ICCPL)

- Simbhaoli Power Private Limited (SPPL)

- Simbhaoli Speciality Sugars Private Limited (SSSPL) Joint Venture:

- Uniworld Sugars Private Limited (USPL).

Co-venturer:

- Volcafe Pte Ltd. (Formerly known as ED & F Man Asia Holdings Pte Ltd.)

Key Management Personnel (KMP):

- Mr. G. M. S Mann - Chairman

- Mr. Gurpal Singh - Director

- Ms. Gursimran Kaur Mann - Director

- Mr. Sanjay Tapriya - Director

- Mr. S.N. Misra - Chief Operating Officer (w.e.f. September 18, 2017)

- Mr. Karan Singh- Whole Time Director (ceased to be key management personnel w.e.f. September 18, 2017)

- Mr. S.C. Kumar - Independent Director (ceased to be key management personnel w.e.f. August 02, 2017)

- Mr. S.K. Ganguli - Independent Director

- Mr. B.K. Goswami - Independent Director

- Mr. Sangeet Shukla - Independent Director (ceased to be key management personnel w.e.f. March 17, 2018)

- Mr. Dalbir Singh - Independent Director

- Mr. C.K. Mahajan - Independent Director

- Mr. J.M. Seth - Independent Director (was appointed on September 27, 2017 up to March 01,2018)

- Mr. D.C.Popli - Chief Financial officer

- Mr. Kamal Samtani - Company Secretary Relatives of Key management personnel:

- Mrs. Mamta Tapriya (wife of Mr. Sanjay Tapriya),

- Mr. Govind Singh Sandhu (brother of Mr. Gurpal Singh),

- Mr. G.M.S Mann (HUF)

Enterprise over which key management personnel exercise significant influence:

- Dholadhar Investments Private Limited, (enterprise over which Mr. G. M. S. Mann and Ms. Gursimran Kaur Mann exercise significant influence)

- Mahajan Law House (enterprise over which Mr. C.K. Mahajan exercise significant influence)

- Raghav & Co (enterprise over which Mr. J.M. Seth exercise significant influence)

Trusts:

- Simbhaoli Superannuation Trust

- Simbhaoli Gratuity Trust

- Simbhaoli Foundation Trust

iv) The Board has approved the appointment and remuneration of Ms. Gursimran Kaur Mann as Managing director and Mr. Sachchida Nand Misra as chief operating officer/ whole time directors in the Company for a period of three years, and the consent on terms of appointment has been accorded at 6th Annual General Meeting of the members of the Company held on September 18, 2017. These appointments are subject to approval by the Ministry of Corporate Affairs, Government of India under the provisions of the Companies Act, 2013.

10. Segment reporting

i) Operating segments:

The companyâs operating segments are business segments, viz. sugar and alcohol, basis which chief operating decision maker (CODM) evaluates the companyâs performance and allocates resources.

ii) Geographical segments:

iii) Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 2 above the accounting policies in relation to segment accounting are as under:

A) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

B) Segment assets and liabilities:

C) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

iv) (d) Geographical information:

The Company operated only in India during the year ended March 31, 2018 and March 31, 2017.

iv) (e) Information about major customers:

No single customer contributed 10% or more of the total revenue of the Company for the year ended March 31, 2018 and March 31, 2017.

11 In view of history of continous losses, the company has recognised deferred tax assets only to the extent of deferred tax liability, which can legally be offset under tax laws.

Details of deferred tax assets recognised and not recognised and details of deferred tax liabilities are as under:

12. Exceptional items represent:

i) The company has entered into a one-time settlement agreement with one of its lenders in the F.Y. 2016-17. The settlement amount was to be paid in six structured instalments by November 14, 2017. The company has recognised Rs.970.79 lacs being remission of liability as exceptional item in previous year March 31, 2017. However, on the account of downturn in the sugar industry the company could not repay as per agreed settlement terms, the lender terminated the settlement agreement. Accordingly, the company has restated the liability as per original agreement during the current year by reversing the said exceptional gain recognized in previous year and shown it as an exceptional item.

ii) In previous year, March 31, 2017 a sum of Rs.543.74 lacs being society commission relating to sugar season 2015-16 for the period up to March 31, 2016 recoverable from the State Government of Uttar Pradesh, written off in pursuance of Government order dated December 28, 2016.

13. Employee Benefits

The Company has classified the various benefits provided to employees as under: -

i) Defined Contribution Plan:

A) Provident fund

B) Superannuation fund

During the year, the Company has recognized the following amounts in the Statement of Profit and Loss:

G. Risks related to defined benefit plans:

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary overtime. Thus, the company is exposed to various risks in providing the above benefits which are as follows:

1) Interest rate risk: The plan exposes the company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in increase in the value of the liability.

2) Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity pay-outs. This may arise due to non-availability of enough cash / cash equivalent to meet the liabilities or holding of its liquid assets not being sold in time.

3) Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the planâs liability.

4) Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability.

5) Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of Rs.20,00,000).

6) Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

7) Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Note: The above is a standard list of risk exposures in providing the gratuity benefit. The Company is advised to carefully examine the above list and make suitable amendments (including adding more risks, if relevant) to the same before disclosing the above in its financial statements.

H. Method and Assumptions related terms:

1) Discount Rate: Discount rate is the rate which is used to discount future benefit cashflows to determine the present value of the defined benefit obligation at the valuation date. The rate is based on the prevailing market yields of high quality corporate bonds at the valuation date for the expected term of the obligation. In countries where there are no such bonds, the market yields at the valuation date on government bonds for the expected term is used.

2) Salary Escalation Rate: The rate at which salaries are expected to escalate in future. It is used to determine the benefit based on salary at the date of separation.

3) Attrition Rate: The reduction in staff/employees of a company through normal means, such as retirement and resignation. This is natural in any business and industry.

4) Mortality Rate: Mortality rate is a measure of the number of deaths (in general, or due to a specific cause) in a population, scaled to the size of that population, per unit of time.

5) Projected Unit credit Method: The Projected Unit Credit Method (sometimes known as the accrued benefit method pro-rated on service or as the benefit/years of service method) considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. The Projected Unit Credit Method requires an enterprise to attribute benefit to the current period (in order to determine current service cost) and the current and prior periods (in order to determine the present value of defined benefit obligations).

14. i) Following are the particulars of disputed dues on account of sales tax (trade tax), excise duty and service tax matters that have not been deposited by the Company as at March 31, 2018.

There are no dues in respect of income tax, customs duty, wealth tax and cess, which have not been deposited on account of any disputes except in respect of income tax demand of Rs.3.71 lacs arising on processing of TDS returns. The Company is in process of rectifying these returns and is confident that the demand will be substantially reduced.

15. Disclosure related to Government Grant

The Company is eligible to receive various grants announced by Central and U.P. State Government for Sugar Industry by way of production subsidy, reimbursement of society commission and interest subvention on certain term loan, loans at concessional rate etc. The Company is also eligible to receive grant announced by U.P State Government for promotion of industry in general under UPSIPP Scheme 2013. The Company has recognised these Government grants in the following manners:

i) The Central Government vide its Notification No. 1(10)/2015-SP-I dated September 18, 2015 announced Minimum Indicative Export Quota (MIEQ) under tradeable export scrip scheme in order to export surplus sugar inventory out of the country. Under the said scheme, the Company was allotted quota of 28,190 MT for export in respect of its all three sugar units. Further, the Central government vide its Notification No. 20(43)/2015-SP-I dated December 02, 2015 announced a scheme for extending production subsidy @ Rs.4.50 per quintal of actual cane crushed during sugar season 2015-16 or the proportionate cane crushed for average sugar production of the Companyâs each unit in the last three sugar seasons, whichever is lower, for the sugar units who have fulfilled stipulated conditions including export obligations.

ii) Under Interest Subvention Scheme of Extending Financial Assistance to Sugar Undertaking 2014, the company is eligible for the reimbursement of interest payable on loan from banks taken against last three sugar seasonâs excise duty, cess and surcharge paid on sugar by the Company subject to fulfilment of certain conditions.

iii) The Company was eligible for government grant by way of reimbursement of Society Cane Commission @ Rs.3.00 per quintal of cane for the sugar season 2015-16 in accordance with the notification issued by the Government of Uttar Pradesh and accordingly the Company had accounted for cane commission receivable aggregating to Rs.543.74 lacs during the year ended March 31, 2016. However, during the year ended March 31, 2017 the Company has written off the said amount in accordance with the notification dated December 28, 2016 issued by the Government of Uttar Pradesh as the same is no more receivable.

The said write off of cane commission has been included under âCane commission written off âunder Note No. 3.33

- âExceptional itemsâ.

iv) The Company had availed government grant by way of reduction of cane society commission for sugar season 2012-13 to 2014-15 as per the notifications dated. June 12, 2015 and for the sugar season 2015-16 for retrospective effect. The Honâble Allahabad High Court vide Order dated

December 21, 2017 quashed the U.P. State Government notifications order for reduction in cane commission rate to societies from retrospective effect against which U.P State Government has preferred appeal before Supreme court. Pending final decision in the matter, the Company has not reversed the grant and not recognised it as liability.

v) The Company was eligible for various incentives under U.P Sugar Incentive Promotion Policy, 2004 (the scheme) which was subsequently scrapped by the State Government. The Company has filed writ petition before Honâble Allahabad High Court (Lucknow Bench) for enforcement of the scheme and settlement of incentive claims. As per the erstwhile scheme, the Company was eligible for capital subsidy @10% of the investments made and revenue subsidy for reimbursement of taxes and other charges upto the prescribed period for incentive. Pending finalisation in the matter, the Company has not recognised these grants.

16. Capital Management

The Company manages its capital to ensure that it will continue as going concern, while maximizing the return to stakeholders through the optimisation of debt and equity balance. The capital structure as at March 31,2018, March 31, 2017 and April 01,2016 was as follows.

Due to continuous losses, the Company has defaulted in payment of interest and principal dues to its lenders. The Company had approached for debt restructuring of its outstanding debts and had also raised additional capital during the year through preferential issue of warrant to the promoters to comply with the condition for infusion of capital imposed under sanctioned Debt Restructuring Scheme.

17. Financial risk management objectives

The Companyâs activities expose it mainly to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.

i) Credit risk

A. Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. Company is exposed to credit risk from trade receivables and deposits with banks. To manage this, Company periodically assesses the financial reliability of customers, taking into account factors such as credit track record in the market and past dealings with the Company for extension of credit to customer. Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. Concentrations of credit risk are limited as a result of the Companyâs large and diverse customer base. Company has also taken advances and security deposits from its customer / agents, which mitigate the credit risk to an extent. The ageing of the trade receivables is given below:

B. The impairment analysis is performed at each balance sheet date on individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company makes general provision for lifetime expected credit loss based on its previous experiences of provision/write off in the previous years. The movement in the provision for doubtful debts, advances to suppliers and security deposits is as under:

C. Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which term deposits are maintained. Generally, term deposits are maintained with banks with which Company has also availed borrowings.

ii) Liquidity risk

iii) Market risk

A) Interest rate risks

B) Commodity risk

C) Foreign exchange risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

D) Regulatory risk

Sugar industry is regulated both by Central Government as well as State Government. Central and State Governments policies and regulations affect the sugar industry and the Companyâs operations and profitability. Distillery business is also dependent on the Government policy.

ii) Fair Value hierarchy

Following methods and assumptions used to estimate the fair values:

- Fair value of cash and cash equivalents and short term deposits, trade and other short term receivables, trade payables, short term borrowings and other current financial assets and liabilities carried at amortized cost is not materially different from its carrying cost, largely due to the short-term maturities of these financial assets and liabilities.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other that quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). There is no transfer from one level to another level during the year.

18. Explanation of transition to Ind AS

These financial statements, for the year ended March 31, 2018, are the first financial statements, the Company has prepared in accordance with Ind AS.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ended March 31, 2018, together with the comparative figures for the year ended March 31, 2017, as described in the summary of significant accounting policies [Refer Note No.2].

In preparing these financial statements, the Companyâs opening balance sheet was prepared as at April 01, 2016, i.e. the date of transition to Ind AS.

This note explains the principal adjustments made by the Company and an explanation on how the transition from the previous GAAP to Ind AS has affected its financial statements, including the Balance Sheet as at April 01, 2016 and the financial statements for the year ended March 31, 2017.

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from the previous GAAP to Ind AS:

i) Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.The Company has elected to apply Ind AS 103 prospectively to business combinations occurring after the transition date. Business combinations occurring prior to the transition date have not been restated.

ii) The Company has elected to continue with carrying value of all Property, plant and equipment under the previous GAAP as deemed cost as at the transition date i.e. April 01, 2016. Under the previous GAAP, Property, plant and equipment were stated at their original cost (net of accumulated depreciation, amortization and impairment), and adjusted by revaluation of certain assets.

iii) The Company has elected to continue with the carrying value of capital work in progress as recognised under the previous GAAP as deemed cost as at the transition date.

iv) The Company has elected to continue with the carrying value for intangible assets (computer software) as recognised under the previous GAAP as deemed cost as at the transition date. Under the previous GAAP, computer software was stated as at its original cost, net of accumulated amortisation.

v) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all the arrangements for embedded leases based on conditions in place as at the date of transition.

vi) When an entity prepares separate financial statements, Ind AS 27 requires it to account for its equity investments in subsidiaries and joint ventures either at cost or in accordance with Ind AS 109. A first-time adopter may choose either fair value, at the entityâs date of transition to Ind AS in its separate financial statements or Previous GAAP carrying amount at that date, to measure its equity investment in subsidiary or joint venture that it elects to measure using a deemed cost. Accordingly, the Company has elected to measure its equity investment in subsidiaries using the Previous GAAP carrying amount, as deemed cost.

vii) Under Ind AS 109, at initial recognition of a financial asset, an entity may make an irrevocable election to present subsequent changes in the fair value of an investment in an equity instrument of subsidiary in other comprehensive income. Ind AS 101 allows such designation of previously recognized financial assets, as âFVTOCIâ on the basis of the facts and circumstances that existed at the date of transition to Ind AS.Accordingly, the Company has designated its investments in equity instruments in (USPL) at fair value through other comprehensive income on the basis of the facts and circumstances that existed as at the date of transition to Ind AS.

viii) Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. Therefore, borrowings as at April 01, 2016 and March 31, 2017 have been reduced with corresponding adjustment in retained earnings.

ix) Under previous GAAP, interest income was accounted for on time proportionate basis. Under Ind AS, investments in debt instruments can be measured either at amortised cost or FVTOCI or FVTPL. The company has elected to use amortise cost as deemed cost as on the transition date for valuing investments in debt securities in one of the subsidiaries (SPPL).

x) The estimates as at April 01, 2016 and as at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies).

xi) The Company has applied the requirements in Ind AS 109 and Ind AS 20 prospectively to government grants by way of concessional loan.

xii) Ind AS 101 requires the de-recognition requirements of Ind AS 109 to be applied prospectively to transactions occurring on or after the date of transition. Therefore, the Company has not recognized financial assets and liabilities under Ind AS which were derecognized under the previous GAAP as a result of a transaction that occurred before the date of transition.

Footnotes to the reconciliation as at April 01, 2016 and March 31, 2017 and statement of Profit and Loss for the year ended March 31, 2017:

a) Property, plant and equipment:

Under Ind AS, the company has elected to opt for cost model with respect to property, plant and equipment, capital work in progress and computer software.

b) Investments:

Under the previous GAAP, long term investments were carried at cost less provision for other than temporary diminution in the value of such investment. Under Ind AS, the Company has the option to designate such investments either as FVTOCI or FVTPL investments. Further, in case of a subsidiary and joint venture, the Company has the option to account for investment in shares either at cost/ deemed cost or FVTOCI or FVTPL as at the transition date.

i. Investment in equity instrument:

Under Ind AS, financial assets designated at fair value through other comprehensive income (FVTOCI) are fair valued at each reporting date with changes in fair value recognized directly in other comprehensive income. The Company has make an irrevocable election to measure its certain equity investments through OCI. Consequently, fair value of such equity instruments designated at FVTOCI has resulted in an decrease in other comprehensive income. Under Ind AS 101, The Company has an option to fair value its investments in joint venture and treated that fair value as deemed cost for measuring such investments in the opening Ind AS Balance Sheet. Accordingly, the Company has fair valued of joint venture. and treat that value as deemed cost for subsequent measurement.

ii. Investment in debt instrument:

The Company has invested Rs.4,892.94 lacs in compulsorily convertible debentures of one of its subsidiaries company at various dates. As per terms, interest is receivable @ 14.50 % for first four years and there after @ 16.00 % till date of conversion of debenture into equity shares. Under the previous GAAP, interest income was accounted for on time proportionate basis at predetermined rate. Under Ind AS, investments in debt instruments can be measured either at amortized cost or FVTOCI or FVTPL.The Company has designated them at amortized cost.

c) Retained earnings

Retained earnings as at the transition date has been adjusted consequent to the above Ind AS transitional adjustments.

d) Borrowings:

i) Ind AS 109 requires that the upfront/processing fees paid in respect of the borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under the previous GAAP, transaction costs incurred in connection with borrowings were accounted upfront and charged to Statement of Profit and Loss for the period in which such transaction costs were incurred.

ii) As at March 31, 2016, the Company has classified its outstanding, cash credit limits, term loans (including current maturities), agri loans and interest accrued on loans in accordance to Debt Realignment Scheme sanctioned by Corporate Debt Restructuring Empower Group vide sanction letter dated February 29, 2016 as the principal lenders have given their consents and majority of stipulated terms and conditions of restructuring have been complied with by the Company. The auditors of the Company has drawn âEmphasis Matterâ on this matter in their audit report dated May 30, 2016. Since under Ind AS the aforesaid adjustment is not permissible, the Company has restated its dues to its lenders as per original terms. Resulting borrowing under the head âNon-Current Liabilitiesâ has decreased and borrowing under the head âCurrent Financial Liabilitiesâ and current maturity and interest accrued on borrowing under the head âCurrent Other Financial Liabilitiesâ have increased.

e) Sale of goods

Under previous GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is presented as a part of other expenses in statement of profit and loss.

f) Interest Income

The previous GAAP required the recognition of revenue from interest on time proportion basis. However, Ind AS requires interest on financial assets to be recognized using the effective interest rate method.

g) Re-measurement of post-employment benefit obligations:

Under previous GAAP, actuarial gains and losses were recognised in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/ asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of the statement of profit and loss.

h) Total comprehensive income and other comprehensive income

Under the previous GAAP, the Company did not present total comprehensive income and other comprehensive income. Hence, it has reconciled the previous GAAP profit to profit as per Ind AS. Further, the previous GAAP profit is reconciled to other comprehensive income and total comprehensive income as per Ind AS.

i) Cash flow statement

The transition from the previous GAAP to Ind AS has not had a material impact on Cash Flow Statement.

19. Prior Period Error

During the current year, the company has detected error crept in the actuarial valuation of gratuity, done by actuarial valuer. The valuer has been incorrectly valuing liability of gratuity in respect of seasonal employees since long. This has been got corrected during the current year, accordingly differences up to March 31, 2016 has been adjusted in the equity as at April 01, 2016 and differences for the year ending March 31, 2017 has been adjusted by restating the derived Ind AS figures. The impact of the aforesaid prior period error is as under:

20. The Company is receiving supplies of steam and power from Simbhaoli Power Pvt. Ltd (SPPL), its subsidiary company, in terms of Bagasse Conversion Agreement(s) executed in earlier years. Taking into account the changes in commercial understanding after completion and stabilization of the power generation projects at SPPL, the Company and SPPL have agreed to amend the terms of these agreements effective from the Sugar season 2017-18. Pending finalization of the revised terms, the Company has accounted for the supply of conversion bagasse etc. to SPPL, and conversion charges payable thereon in accordance with the terms of old agreements. The adjustments if any, after finalization of revision in the terms of conversion, will be accounted for in the period, in which the terms of the revisions are agreed to by the Company and SPPL

21. Recent pronouncements

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 01, 2018. The Company is evaluating the effect of this on the financial statements.

Ind AS 115- Revenue from Contract with Customers:

On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customer The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 01, 2018.

The Company will adopt the standard on April 01, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The Company is evaluating the effect on adoption of Ind AS 115.

22. Details of loan and advances given, investment made and securities provided as required to be disclosed as per provisions of Section 186 (4) of the Companies Act, 2013 have been disclosed in respective heads.

23. The previous yearâs including figures as on the date of transition I have been reworked, regrouped, rearranged and reclassified I wherever necessary. Amounts and other disclosures for the preceding year including figures as at the date of transition are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

Mar 31, 2016

D. The Company has alloted 3,74,79,020 (previous year Nil) Equity shares of Rs 10 each aggregating Rs. 3,747.90 lacs (previous year Rs. Nil) on Amalgamation of Erstwhile Simbhaoli Sugars Limited during the year without payment being received in cash. (refer note 4).

E Rights, preference and restriction attached to equity shares (Rs. 10 each):

i) Voting right shall be in same proportion as the capital paid upon such equity share.

ii) The dividend proposed by the Board of Directors which is subject to the approval of the shareholders in the Annual General Meeting shall be in the same proportion as the capital paid upon such equity share.

iii) In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to capital paid upon such equity share.

#First pari passu charge on pledge of 19,29,655 (previous year Nil) equity shares of the Company in favour of bankers of Simbhaoli Power Private Limited.

! First pari passu charge on pledge of 2,90,11,770 (previous year Nil) equity shares of the Company in favour of bankers of Uniworld Sugars Private Limited.

Out of above, 45,15,000 equity shares have been transferred in favor of the Erstwhile Simbhaoli Sugars Limited (ESSL) and approved by the Board of Directors of Uniworld Sugars Private Limited in the meeting held on March 28, 2013. However, due to shares being in lock in period, the effect has not been taken into the records of the respective depository participants.

1. The Hon''ble High Court of Judicature at Allahabad has sanctioned the Scheme of Amalgamation of Erstwhile Simbhaoli Sugars Limited (ESSL), the Transferor Company with Simbhaoli Sugars Limited (SSL), previously known as Simbhaoli Spirits Limited (SISPL), the Transferee Company w.e.f. April 1, 2015 (the Appointed Date) and consequent thereto, the entire business undertakings of ESSL, stands transferred to and vested in the SISPL, as a going concern with effect from the Appointed Date. ESSL is engaged in manufacturing of standard refined, pharmaceutical grade, specialty sugars, extra neutral alcohol (ENA), ethanol and bio-manure. As per the Approved Scheme

a) the assets, liabilities, rights and obligations of ESSL has been vested with the Company with effect from 1st April 2015 and have been recorded at their respective fair value, under "The Purchase Method" being an amalgamation in the nature of purchases, as prescribed by the Accounting Standard - 14 " Accounting for Amalgamations" notified under Companies (Accounting Standard) Rules, 2006.

b) SSL has issued and allotted 3,74,79,020 Equity Shares of Rs. 10 each at a premium of Rs. 62 per share in discharge of the purchase consideration.

c) the difference in the fair value of net assets of ESSL as at April 01, 2015 duly adjusted for purchase consideration and cancellation of the equity share capital of SSL held by the ESSL, amount to Rs. 229.80 lacs has been credited to ''Capital Reserve''.

2. Under the scheme of amalgamation, the Company has acquired rights under finance lease arrangement with Simbhaoli Power Private Limited for one of the equipments at its Simbhaoli Sugar Division.

3. i) Contingent liabilities not provided for:

Claims against the Company not acknowledged as debts Rs. 1,793.21 lacs (previous year Rs. 9.83 lacs).

ii) The State Government has given various incentives to Utter Pradesh based sugar industry on regular basis particularly for the years when industry has been passing through economical stress. This also included waiver of interest on delayed cane price payment up to sugar season 2013-14. The management is confident that such as support to industry will continue for future, and no liability for interest on delayed cane price will arise for the sugar season 2014-15 and 2015-16. The incentives for 2015-16 and waiver of the interest for the previous sugar year (2014-15) are under consideration by the State Government and the amounts are not ascertained.

iii) Capital and other commitment

Estimated amount of contracts (net of advances) remaining to be execute on Capital account Rs. 39.72 lacs (previous year Rs. Nil). The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreements in normal course of business. The Company does not have any other long term commitments or material non-cancellable contractual commitments / contracts, which may have a material impact on the financial statements.

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

On the basis of supplier information available with the Company who have registered under the Micro Small and Medium.

5. ESSL has facilitated agri loans from certain commercial banks to its sugarcane farmers under the management and collection agreements and provided Corporate Guarantee and post dated cheques as security. These loans were distributed to the farmers against the payment to be made to them against supply of sugarcane in earlier years and ESSL facilitating the repayment of these loans along with interest to the banks. As per sanction of CDREG all the dues outstanding under these arrangements are proposed to be converted into term loans, subject to the consent of respective commercial banks. Two of the commercial banks has agreed for conversion and accordingly it''s dues has being classified as "Long Term Borrowings". The principal and interest dues of others banks, who have not yet given their consents, are classified and shown under "Unsecured Short Term Borrowings" and "Other Current Liabilities" respectively.

6. Corporate Debt Restructuring Empowered Group (CDREG) vide its Sanction letter dated February 29, 2016, has approved the Debt Realignment Scheme (Scheme) of the Company, which includes deferment of existing term loans, conversion of cash credit limit / agri loans facilitated to farmers into term loans and funding of 75% of interest on existing term loans / restructured cash credit limits for two years w.e.f. October 1, 2014 repayable in structured quarterly installment at interest rate from 0% to 12.50% p.a. The Company has complied with all the pre restructuring conditions and majority of bankers has already given their individual sanction for implementation of scheme. The management is confident that implementation of the scheme with the lenders will be completed within stipulated time. Accordingly, the Company has classified all its current liabilities in respect of short term borrowings of Rs. 32,513.37 Lacs, current maturities of term loans of Rs. 6,902.72 lacs and interest accrued of Rs. 5,105.72 Lacs, which was overdue as on 31.03.2016 under Long Term borrowings in accordance with the approved scheme in these financial statements. The terms of repayment, nature of security and overdue, if any, after implementation of CDR package is as under.

7. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting", the Company''s primary segments are business segments, viz. Sugar and Alcohol.

B. Geographical segments:

Since the Company''s activities/operations are primarily within the country and considering the nature of products it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 2 above the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities:

c) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

8. Exceptional item of Rs. 500 lacs in the previous year represents monetary penalty imposed by The Hon''ble National Green Tribunal, New Delhi (NGT) vide its order dated October 16, 2014 (the order), upheld the complaint alleging non-fulfillment of certain conditions on pollution and effluent discharge against the Company. The Company has taken requisite steps in this regard and after obtaining the consent from Uttar Pradesh Pollution Control Board, the operation at Simbhaoli distillery plant has been resumed in October 2015.

9. The Company follows Accounting Standard (AS-22) "Accounting for taxes on income", and in consideration of prudence, has recognized deferred tax asset on unabsorbed depreciation and brought forward business losses, as at March 31 2016 only to the extent of deferred tax liability on difference between book balance and tax balance of fixed assets out of total deferred tax assets.

There are no dues in respect of income tax, customs duty, wealth tax and cess, which have not been deposited on account of any disputes except in respect of income tax demand of Rs. 34.91 lacs arising on processing of TDS returns. The Company is in process of rectifying these returns and is confident that the demand will be substantially reduced.

Uniworld Sugars Private Limited is a 50:50 Jointly controlled entity either in own name or through its affiliates between Volcafe Pte Ltd. (Formerly known as E D & F Man Holdings BV) and the Company as per the terms set under the Share Subscription and Shareholders Agreement dated January 25, 2011 and subsequent amendments therein (collectively referred to as "Joint Venture Agreements" or "JVA"). The Joint Venture Company (JVC) has been incorporated to undertake the business of refining of sugar and molasses, the cogeneration of power and all other activities ancillary or identical thereto in India and trading of sugar and molasses both within the Indian and overseas markets.

10. Employee Benefits

The Company has classified the various benefits provided to employees as under:-

A) Employee Plan:

a) Provident fund

b) Superannuation fund

During the year, the Company has recognized the following amounts in the Statement of Profit and Loss:

B) Defined benefits plans

a) Gratuity

b) Compensated absences - Earned Leave/ Sick Leave/ Casual Leave

# Indian Assured Lives Mortality (2006-08) Ultimate.

* The plan assets are maintained with ICICI Prudential Life Insurance Company Ltd. The details of investments maintained by the ICICI Prudential Life Insurance Company Ltd have not been made available to the Company and have therefore not been disclosed.

Disclosure relating to present value of defined benefit obligation and fair value of plan assets and net actuarial gain/ loss:

11. Details of loan and advances given, investment made and securities provided as required to be disclosed as per provisions of Section 186 (4) of the Companies Act, 2013 have been disclosed in respective heads.

12. In the opinion of the management, Current Assets have value in realization in ordinary course of business at least equal to the amount at which they are stated.

13. Figures for the year ended March 31, 2015 are not comparable as it represents the financial figures of un-amalgamated entity having only one distillery operation.

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

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