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Notes to Accounts of Balrampur Chini Mills Ltd.

Mar 31, 2023

The Company has only one class of equity shares. The Company declares and pays dividend in Indian rupees. The holders of equity shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

i) Capital reserve comprise of reserve arising consequent to business combination in earlier years, in accordance with applicable accounting standard and in terms of the relevant schemes sanctioned by the Court.

ii) Capital redemption reserve has been created consequent to redemption of preference share and buy-back of equity shares. This reserve shall be utilised in accordance with the provisions of the Act.

iii) The general reserve represents amount transferred out of the profits of the Company and reserve aggregating to H4224.23 Lakhs (Previous year: H4224.23 Lakhs) arising consequent to business combination in earlier years, in accordance with applicable accounting standard and in terms of the relevant schemes sanctioned by the Court. It is not earmarked for any specific purpose.

iv) The storage fund for molasses has been created to meet the cost of construction of molasses storage tank as required under Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974. During the year ended 31st March, 2023, H33.44 Lakhs was utilised from the fund and credited to the Statement of Profit and Loss. The said storage fund is represented by investment in the form of fixed deposits with banks amounting to H140.80 Lakhs (Previous year: H104.68 Lakhs),

v) Retained earnings represents the undistributed profit/ amount of accumulated earnings of the Company.

vi) Other comprehensive income (OCI) represents the balance related to re-measurement gains and losses resulting from experience adjustments and changes in actuarial assumptions. These gains and losses are recognised directly in OCI during the period in which they occur and are subsequently transferred to Retained earnings.

a) Nature of securities for the aforesaid borrowings including current maturities of long term debt [Refer note

no. 18(ii)] and deferred income [Refer note no. 21]:

i) Senior, Unlisted, Rated, Redeemable, Non-convertible Debentures subscribed by debenture holder amounting to H14000.00 Lakhs (Previous year: H Nil) is secured by first exclusive charge, by way of hypothecation of movable fixed assets (PPE), both present and future, pertaining to two sugar units of the Company viz. Balrampur and Babhnan.

ii) Rupee Term Loan from HDFC amounting to H13600.00 Lakhs (Previous year: H Nil) under the Scheme for Extending Financial Assistance to project proponents for enhancement of ethanol capacity, is secured by pari passu first charge, by way of hypothecation of all the movable fixed assets (PPE), both present and future, pertaining to Balrampur distillery unit of the Company.

iii) Rupee Term Loan from HDFC amounting to H3510.50 Lakhs (Previous year: H5516.50 Lakhs) under the Scheme for Extending Financial Assistance to Sugar Mills for enhancement and augmentation of ethanol capacity, is secured by pari passu first charge, by way of hypothecation of all the movable fixed assets (PPE), both present and future, pertaining to Gularia distillery unit of the Company.

iv) Rupee Term Loan from ICICI amounting to H2500.00 Lakhs (Previous year: H3750.00 Lakhs) under the Scheme for Extending Financial Assistance to Sugar Mills for enhancement and augmentation of ethanol capacity, is secured by pari passu first charge, by way of hypothecation of all the movable fixed assets (PPE), both present and future, pertaining to Gularia distillery unit of the Company.

v) Rupee Term Loan from SBI amounting to H19000.00 Lakhs (Previous year: H Nil) under the Scheme for Extending Financial Assistance to project proponents for enhancement of ethanol capacity, is secured by first charge, by way of hypothecation of all the movable fixed assets (PPE), both present and future, pertaining to Maizapur distillery unit of the Company.

vi) Rupee Term Loan from ICICI (Acting as an agent on behalf of Government of Uttar Pradesh) amounting to H8807.36 Lakhs (Previous year: H16428.65 Lakhs) under the Scheme for Extending Financial Assistance to Sugar Undertakings, 2018, of Uttar Pradesh Government is secured by pari passu first charge, by way of hypothecation of movable fixed assets (PPE), both present and future, pertaining to seven cogen units of the Company viz. Balrampur, Babhnan, Haidergarh, Akbarpur, Mankapur, Kumbhi and Gularia.

Nature of securities :

Working capital loans from banks (viz: SBI, HDFC, ICICI and KOTAK) are secured by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar units of the Company on pari passu basis with each of them.

The ultimate realisation of deferred tax assets, carried forward tax losses/unabsorbed depreciation and unused tax credits is dependent upon the generation of future taxable income. Deferred tax assets including MAT credit entitlement is recognised on management''s assessment of reasonable certainty for reversal/ utilisation thereof against future taxable income.

Based on the assessment of the possible impact of the new tax regime, the Company has decided to continue with existing normal tax structure till certain deductions are available and accumulated Minimum Alternate Tax (MAT) credit is substantially exhausted and thereafter, to opt for the concessional rate under new tax regime.

1. Contingent liabilities and commitments (to the extent not provided for)

(a) Contingent liabilities :

(H in Lakhs)

Sl.

No.

Particulars

As at

31st March, 2023

As at

31st March, 2022

(i)

Claims against the Company not acknowledged as debts :

- Sales tax and entry tax (including interest and other claims) -under appeal/litigation

51.46

92.69

- Others - under appeal/ litigation

154.00

151.48

205.46

244.17

(ii)

Claims for acquisition of 1.99 acres of land for the Distillery unit at Balrampur and compensation there against is under dispute as the matter is subjudice

Amount

not ascertainable

Amount

not ascertainable

¦ The amounts shown in (i) above represent the best possible estimates arrived at, on the basis of available information. 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/ litigations.

¦ Refer note no. 36(3) (b) for availment of remission of taxes and levies pending final decision with the Hon''ble Supreme Court on the matter.

(b) Commitments :

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

(H in Lakhs)

Sl.

Particulars

As at

As at

No.

31st March, 2023

31st March, 2022

(i)

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

9098.39

50019.88

(ii)

Advance paid against above

828.87

8295.99

It is not possible to estimate the timing/ uncertainties relating to utilisation/ reversal of the provision for contingencies. Future cash outflow in respect of the above is determinable only upon Court decision/ out of Court settlement/ disposal of appeals. The Company does not expect any reimbursement in respect of above provision.

(b) Contingent assets

During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and circumstances. Also Refer note no. 36(3)(a) and 36(3)(c) in this respect.

3(a) The Hon''ble High Court at Allahabad, Lucknow Bench, vide its order dated 12th February, 2019 ("Order") had quashed the G.O. dated 4th June, 2007, vide which the Sugar Industry Promotion Policy 2004 ("SIPP") was withdrawn, and held that the petitioner companies were entitled to all the benefits for the entire period of the validity of SIPP Consequent to this, the Company in respect of its capital projects and expansions during the period from 2004 to 2008 is entitled to the capital subsidy, reimbursement of certain expenses, remission of certain taxes and levies under the provision of the said policy.

The State Government of Uttar Pradesh and others have filed Special Leave Petitions challenging the said Order before the Hon''ble Supreme Court of India and the cases are pending for hearing as on 31st March, 2023. Pending this, the Company''s claim for reimbursement of H33654.94 Lakhs (Previous year: H33654.94 Lakhs ) and capital subsidy of H13137.77 Lakhs (Previous year: H13137.77 Lakhs) pursuant to SIPP being contingent in nature, has not been recognised.

(b) I n terms of SIPP, the Company availed remission of taxes and levies, namely, Entry Tax on Sugar, Trade Tax on Molasses and Cane Purchase Tax, Stamp duty and registration charges on purchase of land aggregating to H11278.45 Lakhs in earlier years. These remissions were availed pursuant to protection earlier provided by the Hon''ble High Court at Allahabad, which has been confirmed pursuant to the Order of the said court as given in Note No. 36(3)(a) above.

In the assessment of Entry Tax on Sugar and Trade Tax on Molasses relating to four sugar units, namely, Akbarpur, Mankapur, Kumbhi and Gularia aggregating to H6300.63 Lakhs has been assessed, though these units are also eligible for the remission under the SIPP. However, no demand has been raised and pursued against the Company in view of the protection by the Hon''ble High Court as aforesaid. Since these units are eligible for incentive under SIPP and no demand has yet been raised against the Company, the aforesaid amount of H6300.63 Lakhs has not been considered as contingent liability.

(c) Uttar Pradesh Electricity Regulatory Commission vide notification dated 25th July, 2019 reduced the power purchase rates of bagasse-based power plants w.e.f. 1st April, 2019 and revenue in this respect has accordingly been recognised at such reduced rates. The Uttar Pradesh Cogen Association has filed a writ petition, challenging the reduction in power rates before Hon''ble High Court at Allahabad which has been admitted. Next hearing date is yet to be announced.

(d) Uttar Pradesh Excise Authorities had imposed payment of H20/- per quintal on molasses transferred, sold, or supplied for captive consumption with effect from 24th December 2021 as "Regulatory Fee" under amended Section 8(4) of Uttar Pradesh Sheera Niyantran Adhiniyam, 1964.

The Uttar Pradesh Sugar Mills Association and Others have filed a writ petition against the aforesaid levy before Lucknow Bench of Hon''ble Allahabad High Court. The said Court vide its Interim Order dated 25th February 2022, have deferred the realisation thereof pending final decision on the matter. Next hearing date is yet to be announced.

Up to 31st March, 2022, the Company deposited H449.44 Lakhs " under protest" which was clubbed and shown with "Duties and taxes paid under protest"" under Note No. 9, Other non-current assets.

During the year ended 31st March, 2023, the Company has continued to deposit the amount under protest, however, decided to expense out the Regulatory Fees to the Statement of Profit and Loss, including H449.44 Lakhs deposited in previous year.

4 (a)At its meeting on 9th November, 2022, the Board of Directors approved a buy-back of equity shares not exceeding H14544.00 Lakhs ("Maximum Buyback Size"), (excluding transaction costs and tax on buy-back), at a price not exceeding H360/- per equity share ("Maximum Buyback Price").

At the Maximum Buyback Price and Maximum Buyback Size, the indicative maximum number of equity shares to be bought back was 4040000 equity shares (Maximum Buyback Shares), representing approximately 1.98% of the paid-up share capital of the Company as of 31st March, 2022. The buy-back was offered to all eligible equity shareholders of the Company (excluding the Promoters, the Promoter Group, and Persons in Control of the Company) under the open market route through the stock exchanges. The buy-back of equity shares began on 16th November, 2022.

During the year ended 31st March, 2023, the Company bought-back and extinguished a total of 2290755 equity shares at a volume-weighted average price of H357.31 per equity share, aggregating to H8185.14 Lakhs, (excluding transaction costs and tax on buy-back), comprising approximately 1.12% of the pre-buyback paid-up equity share capital of the Company.

Consequently, the equity share capital has been reduced by H22.91 Lakhs, and an amount equivalent to the face value of equity shares bought back has been transferred from Retained earnings to Capital redemption reserve. The differential amount of H8162.23 Lakhs with respect to the aggregate consideration in excess of the face value of the equity shares bought back has been adjusted from Retained Earnings. Further, various costs aggregating to H74.31 Lakhs (net of tax of H39.92 Lakhs), incurred for the same and the taxation on buy-back amounting to H1893.47 Lakhs, have also been adjusted from Retained earnings.

As of 31st March, 2023, out of the funds set aside and earmarked for above buy-back, the balance amount remain invested in mutual funds of H6125.06 Lakhs and fixed deposits of H363.60 Lakhs. No shares have additionally been bought back during the period from 1st April, 2023 to 10th May, 2023. The Company''s offer for buy-back, as scheduled, is open till 15th May, 2023.

4(b) The shareholders have approved the "BCML Employees Stock Appreciation Rights Plan 2023" ("ESAR 2023"/ "Plan") through Postal Ballot on 23rd April, 2023. Under the Plan, the Company would grant Employees Stock Appreciation Rights ("ESAR") to such employees who are in permanent employment of the Company within the meaning of the Plan, including any director, whether whole-time or otherwise (other than promoters of the Company, or member of the promoter group, independent directors and directors holding directly or indirectly more than 10% of the outstanding equity shares of the Company), entitling the employees eligible for ESAR to receive in aggregate not more than 4000000 equity shares of face value of t 1/- each, based on such eligibility criteria and terms and conditions as may be decided by the Nomination & Remuneration Committee of the Board of Directors.

5. Based on the information/documents available with the Company, information as per the requirement of section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 with respect to trade payables and payable to suppliers of capital goods are as follows:

(i) The total export entitlement utilized and physical export done through merchant exporter by the Company during the year ended 31st March, 2022 aggregated to 121270 MT against the quota allocated for the sugar season 202021. The financial assistance earned against such exports @ H6000 per MT amounting to H7276.20 Lakhs was clubbed with export incentive and assistance.

(ii) Notification No. S.O. 3523 (E) dated 19th July, 2018 and subsequent notifications issued from time to time issued by the Central Government for "extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity" with a view to increase production of ethanol and its supply under Ethanol Blended with Petrol (EBP) Programme, and thereby to improve the liquidity position of the sugar mills enabling them to clear cane price arrears of the farmers for which interest subvention @ 6% p.a. or 50% of rate of interest charged by banks (whichever is lower) would be borne by the Central Government for a tenure of 5 years from the date of disbursement of the loan.

Under the said scheme, HDFC Bank and ICICI Bank disbursed rupee loan aggregating to H8024.00 Lakhs and H5000.00 Lakhs respectively, during the year ended 31st March, 2020 which was utilised for setting up of 160 KLPD distillery at Gularia unit.

Further, State Bank of India disbursed Rupee Loans aggregating to H19000.00 Lakhs (H3000.00 Lakhs is yet to be disbursed by the bank), and HDFC Bank disbursed Rupee Loan of H13600.00 Lakhs during the year ended 31st March 2023, which was utilized for setting up a new distillery of 320 KLPD distillery at Maizapur unit and expansion of the distillery unit at Balrampur with an additional capacity of 170 KLPD, respectively.

Accordingly, H954.47 Lakhs (Previous Year: H416.37 Lakhs) has been adjusted with interest on long-term borrowings for the year ended 31st March 2023. Further, a sum of H216.59 Lakhs (Previous Year: H Nil) has been adjusted with interest on long-term borrowings capitalized.

(iii) The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) Plan Scheme was designed to incentivise employers for generation of new employment, where Government of India paid 8.33% Employee Pension Scheme contribution of the employer for the new employment. Accordingly H Nil (Previous Year: H0.32 Lakhs) have been deducted from

Contribution to provident, gratuity and other funds under Employee benefits expense, for the year ended 31st March, 2023.

(iv) The Government of Uttar Pradesh vide its Order No. - 12/2018/1698 / 46-3-18-3 (36-A) / 2018 dated 28th September, 2018 notified a scheme for assistance to sugar mills under the Scheme for Extending Financial Assistance to Sugar Undertakings - 2018 of Uttar Pradesh Government, for the purpose of clearance of sugarcane price for sugar season 2016-17 and 2017-18 as per the State Advised Price of sugarcane fixed by the State Government.

Under the said scheme, during the year ended 31st March 2019, the State Government extended Rupee term loan to the Company through ICICI Bank @ 5% p.a. interest for a period of 5 years aggregating to H36508.11 Lakhs which was utilised for clearance of sugarcane price for sugar season 2017-18 as per the scheme.

Pursuant to the requirements of Ind AS 20 - "Accounting for Government Grants and Disclosure of Government Assistance" and Ind AS 109 - "Financial Instruments", H4051.19 Lakhs was accounted for during the year ended 31st March, 2019 and included under Note No. 21 - "Deferred income" .

Accordingly, proportionate income amounting to H495.13 Lakhs and H750.15 Lakhs has been adjusted with interest on long term borrowings for the year ended 31st March, 2023 and 31st March, 2022 respectively.

9. Employee benefits :

As per Ind AS - 19 " Employee Benefits", the disclosures of Employee Benefits are as follows:

Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the said Act, an employee who has completed five years of continuance service is entitled to the gratuity. The gratuity plan provides a lumpsum payment to employees at retirement, death, incapacitation or termination of employment. The level of benefits depends on the member''s length of service and salary at the time of cessation of the employment contract with the Company.

The fund is in the form of a trust and is governed by the Board of Trustees who are responsible for its administration. The Board of Trustees is responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the asset-liability matching strategy, investment risk management policy. The Board of Trustees decides its contribution based on the results of this annual review.

The Company contributes ascertained liabilities towards gratuity to trust.

(c) Risks related to defined benefit plans:

The main risks to which the Company is exposed in relation to operating defined benefit plans are :

(i) Interest rate risk :

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

(ii) Salary inflation risk :

Higher than expected increases in salary will increase the defined benefit obligation.

(iii) Demographic risk :

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

(d) Asset - liability management and funding arrangements

The trustees are responsible for determining the investment strategy of plan assets. The overall investment policy and strategy for Company''s funded defined benefit plan is guided by the objective of achieving an investment return which, together with the contribution paid is sufficient to maintain reasonable control over various funding risks of the plan.

(e) Other disclosures :

The gratuity and provident fund expenses have been recognised under " Contribution to provident, gratuity and other funds" and Leave encashment clubbed with " Salaries and wages" under Note No. 30 - Employee benefits expense.

11. Revenue

The details of performance obligations in terms of Ind AS 115 - Revenue from contracts with customers are as follows:

(i) Sugar

The Sugar segment of the Company principally generates revenue from the sale of sugar, its by-products, and co-generated power to distribution companies.

Domestic sales of sugar are made on ex-factory terms or agreed terms to wholesale, institutional buyers, or merchant exporters within the country and revenue is recognized when the goods have been shipped or delivered to the buyer''s specific location (as per agreed terms). Domestic sugar sales are mainly done on advance payment terms.

Export sales of sugar to merchant exporters are done on ex-factory or delivered basis in terms of the agreement, and revenue is recognized when the goods have been shipped or delivered to the buyer''s specific location (as per agreed terms). The sale price and payment terms are fixed as per contracted terms.

Revenue from co-generated power is recognised on power supplies to distribution companies from the Company''s facilities in accordance with the sale price, payment terms, and other conditions as per the Power Purchase Agreements ("PPA").

Bagasse and pressmud are generally sold on advance payment terms to customers on an ex-factory basis as per the agreement, and revenue is recognized when the goods have been shipped to the buyer.

(ii) Distillery

The distillery segment of the Company principally generates revenue from the sale of industrial alcohol, which mainly constitutes ethanol sold under contracts with Public and Private Oil Marketing Companies ("OMCs") and other products to institutional buyers, and co-generated power to distribution companies.

Ethanol is sold on a delivered basis as per the agreement, and revenue is recognized when the goods have been delivered to the Public and Private OMC''s locations (as per agreed terms), inclusive of all duties, levies, taxes, charges, etc. The sale price is determined based on the Expression of Interest ("EOI") or Tender floated in case of Public OMCs and on agreement in case of Private OMCs. The payment terms in the case of Public and Private OMCs are within 30 days and 15 days respectively after the delivery of the material and submission of original invoices.

Other products like Rectified Spirit, Extra Neutral Alcohol (ENA), Dry Ice, etc., are sold in bulk to institutional buyers on an ex-factory basis as per agreed terms. Revenue is recognized when goods have been shipped to the buyer''s specific location as per agreed terms. The payment terms are fixed as per the Company''s credit policy, which is up to 45 days.

Revenue from co-generated power is recognised on power supplies to distribution companies from the Company''s facilities in accordance with the sale price, payment terms, and other conditions as per the Power Purchase Agreements ("PPA").

(iii) Others

The Other segment principally generates revenue from the sale of agricultural fertilizers such as soil conditioner, granulated potash, etc.

Sale of agricultural fertilizers are done on an ex-factory or delivered basis in terms of the agreement, and revenue is recognized when the goods have been shipped or delivered to the buyer''s specific location (as per agreed terms). The sale price and payment terms are fixed as per contracted terms and the Company''s credit policy, which is up to 60 days.

12. Segment information

(a) The Chairman and Managing Director has been identified as the Company''s Chief Operating Decision Maker (CODM) in terms of Ind AS 108 - "Operating Segments". The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by Business segments. The CODM of the Company evaluates the segments based on their revenue growth, operating income and return on capital employed.

In addition, revenue and expenses have been allocated to a segment based on the segment''s operating activities. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable". Segment assets and segment liabilities represent assets and liabilities of respective segment. Investments, tax related assets/ liabilities and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as " Unallocable".

(i) Inter-segment revenues are eliminated upon consolidation and reflected in the ''adjustments/eliminations'' column. Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed at Company level. Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to the segments as they are also managed at Company level.

(ii) Transactions between segments are primarily transferred at cost/ transaction price based on current estimated market prices. Common costs are apportioned on reasonable basis.

(iii) Figures in bracket pertains to previous year.

(e) Information about major customers:

Revenues from one customer of the Company''s Sugar segment was H52945.56 Lakhs representing approximately 11.35% of the Company''s total revenues for the year ended 31 March 2023.

No single customer contributed 10% or more of the total revenue of the Company for the year ended 31st March, 2022.

13. Disclosure under Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Company has neither given any loan nor has advanced any amount either during the year ended 31st March, 2023 or 31st March, 2022. Hence, the requirements under the said Schedule is not applicable to the Company and no information is required to be disclosed.

14. During the year ended 31st March 2022, the Company sold its entire shareholding of 45.00% in its Associate Company viz. Visual Percept Solar Projects Pvt. Ltd. ("VPSPPL") consisting of 7852500 equity shares of H10/- each at an agreed consideration of H7317.71 Lakhs. Accordingly, VPSPPL ceased to be an Associate of the Company w.e.f. 15th February, 2022.

The resultant gain on sale of aforesaid investment aggregating to H5273.75 Lakhs, net of transaction costs amounting to H80.83 Lakhs was recognised and shown as "Exceptional items" during the year ended 31st March 2022.

15. The Board of Directors of the Company at its meeting held on 15th September, 2017 considered and approved cumulative investment of H17500.00 Lakhs in tranches over a period of five years in Auxilo Finserve Private Limited ("AFPL"), an unlisted NBFC based in India and engaged in financing activities in education sector.

The Company has so far acquired 165292000 (Previous Year: 155000000) Equity shares of AFPL having face value H10/- each with total cost of H17499.64 Lakhs (Previous Year: H15750.00 Lakhs) on preferential issue basis constituting 43.93% (Previous Year: 44.36%) as at 31st March, 2023.

B. Fair value hierarchy

The fair value of the financial assets, financial liabilities are included at an amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

Fair value of trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other current financial assets, short term borrowings from banks and financial institutions, trade and other payables, and other current financial liabilities approximate their carrying amounts due to the short-term maturities of these instruments.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

Level 2: Inputs other than 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).

The following table presents the fair value hierarchy of assets measured at fair value on a recurring basis as at 31st March 2023:

17. Financial risk management objectives and policies

The Company''s principal financial liabilities includes borrowings, lease liabilities, trade payables, other payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents and other financial assets that derive mainly from its operations.

The Company is exposed to credit risk, liquidity risk and market risk. The Company''s senior management under the supervision of the Board of Directors oversees the management of these risks. The Company''s financial risks are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised as below:

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other risks, such as regulatory risk and commodity price risk. Financial instruments affected by market risk include borrowings and investments.

(i) Interest rate risk

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 Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s borrowings obligations.

Sugar is produced over a period of 5 to 6 months and is required to be stored for sale over a period of 12 months, thereby resulting in very high requirement of working capital. Cost of funding depends on the overall fiscal environment in the country as well as the Company''s credit worthiness /credit ratings. Failure to maintain credit rating can adversely affect the cost of funds.

17. Financial risk management objectives and policies (contd.)

To mitigate the interest rate risk, the Company maintains an impeccable track record and ensures long term relation with the lenders to raise adequate funds at competitive rates. Company has access to low cost borrowings because of its healthy Balance Sheet. Moreover, Company deals with four banks thereby reducing the risk significantly. In addition, steady revenue from distillery business reduces the overall requirements of working capital.

As at 31st March 2023, the Company has outstanding non-current borrowings, aggregating to H61705.12 Lakhs (Previous Year: H25695.15 Lakhs). Of these, non-current borrowings of H52578.10 Lakhs (Previous Year: H9266.50 Lakhs) are linked to variable interest rates and among them, non-current borrowings of H38610.51 Lakhs(Previous Year: H9266.50 Lakhs) are covered under interest subvention scheme [For details of the Company''s long-term and short-term loans and borrowings, including interest rate profiles, Refer note no. 18(i), 18(ii) and footnote (ii) to note no. 36(8)].

Thus, 50 bps increase / decrease in the interest rate will not have a material impact in the Statement of Profit and Loss.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. To mitigate foreign exchange risk, the Company covers its position through permitted hedging methods. There was no foreign currency exposure as at 31st March, 2023 and 31st March, 2022.

(iii) Commodity price risk

The major segment in which the Company operates, which accounts for around 75% of the Company''s total revenue, is Sugar and as such the Company is exposed to commodity price risk.

The Government announces domestic sales quotas on a monthly basis. Moreover, there are not many active platforms in India that allow hedging of domestic sugar sales. Additionally, the Central Government had announced a Minimum Sale Price (MSP) for the sale of sugar in the open market by every sugar mill. Currently set at H31/- per kilogram, this MSP acts as a minimum floor price for the sale of sugar by the sugar mills in India.

Normally, the Company does not physically export sugar. However, the Company has a policy in place to hedge the underlying exposure associated with exports.

The pricing methodology for ethanol remained unchanged. Ethanol prices (excluding ethanol produced from grains) are announced by the Central Government which are based on Fair and Remunerative Price (FRP) of sugarcane, cost of production of sugar and realisation of by-products.

Price of Ethanol produced from grains are announced annually by the Oil Marketing Companies ("OMC").

(iv) Other price risk:

The Board of Directors reviews and approves equity investment decisions. Company''s equity risk exposure is limited to cost and these are subject to impairment testing as per the policies followed in this respect. Accordingly, other price risk is not expected to be material.

(b) Credit risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including borrowings from banks and financial institutions. The Company''s sugar sales are mostly on cash. Co-generated Power is sold to government entities and ethanol is sold under contracts to Public and Private Oil Marketing Companies ("OMCs"). The Company keeps a close watch on the realisation of the outstanding amounts and has not experienced any significant default.

The Company uses judgment in making the assumptions and selecting the inputs for assessing the impairment calculation, based on the Company''s past history, existing market conditions, and future estimates at the end of each balance sheet date. Impairment allowance against financial assets is created and subsequently written off when there is no reasonable expectation of recovery. However, the Company continues to recover the receivables. Where recoveries are made, these are recognised in the Standalone Statement of Profit and Loss.

(i) Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing; Refer note no. 36(11) for credit terms.

An impairment analysis is performed at each balance sheet date on an individual basis for major customers. Large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the balance sheet date is the carrying value of each financial assets class disclosed under note no. 12.

(ii) Balances with banks

Credit risk for balances with banks is managed in accordance with the Company''s policy.

The Company''s maximum exposure to credit risk for the components of the Standalone balance sheet as at 31st March, 2023 and 31st March, 2022 is the carrying amounts as stated under note no. 13 and 14 and fixed deposits with banks included under note no. 7(i).

(c) Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning tool. The Company''s objective is to meet the funding requirement and maintain flexibility in this respect through the use of cash credit facilities, short term loans and commercial papers.

18. Capital Management

(a) Risk management

For the purpose of the Company''s capital management, capital includes issued equity capital, and all other equity reserves attributable to the Company''s equity shareholders. The Company''s objective while managing capital is to safeguard its ability to continue as a going concern and continue to provide returns to shareholders and other stakeholders.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the financial covenants'' requirements and return of capital to shareholders.

To achieve this overall objective, the Company''s capital management, amongst other things, also aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings. The Company has complied with these covenants. There have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2023 and 31st March, 2022.

The Company monitors capital using debt-equity ratio, which is total long-term debt divided by total equity.

(ii) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) For working capital facilities, the Company has submitted Stock statement to banks on monthly basis.

Differences are primarily due to the variation in valuation methodology of inventory for sugar. For Stock Statements submitted to banks, sugar inventory have been valued in terms of sanction letters, whereas in books such inventory are carried at lower of cost or net realisable value as per the accounting policy of the Company.

20. The previous year''s figures have been regrouped and rearranged wherever necessary to make them comparable with those of the current year''s figures.


Mar 31, 2022

Footnotes:

i) Capital reserve comprise of reserve arising consequent to business combination in earlier years, in accordance with applicable accounting standard and in terms of the relevant scheme sanctioned by the Court.

ii) Capital redemption reserve is created consequent to redemption of preference shares and buy-back of equity shares. This reserve shall be utilised in accordance with the provisions of the Act.

iii) Securities premium represented the amount received in excess of face value of shares on issue and was utilised in accordance with the provisions of the Act.

iv) The general reserve represents profits transferred out of retained earnings of the Company from time to time and it also include amount aggregating to H 4224.23 Lakhs (Previous year: H 4224.23 Lakhs) arisen consequent to business combinations entered by the Company in earlier years, in accordance with then applicable accounting standard and in terms of the relevant scheme sanctioned by the Court. It is not earmarked for any specific purpose.

v) The storage fund for molasses has been created to meet the cost of construction of molasses storage tank as required under Uttar Pradesh Sheera Niyantran (Sansodhan) Adesh, 1974. During the year ended 31st March, 2021, H 106.83 Lakhs was utilised from the fund and credited to the Statement of Profit and Loss. The said storage fund is represented by investment in the form of fixed deposits with banks amounting to H 104.68 Lakhs (Previous year: H 51.02 Lakhs) [Refer Note No. 14].

vi) Retained earnings represents the undistributed profit / amount of accumulated earnings of the Company.

vii) Other Comprehensive Income (OCI) represents the balance in equity relating to re-measurement gain/(loss) of defined benefit obligation.

a) Nature of securities for the aforesaid borrowings including current maturities of long term debt [Refer Note No. 18(ii)] and

deferred income [Refer Note No. 21]:

i) Rupee Term Loan from ICICI (Acting as an agent on behalf of Government of Uttar Pradesh) amounting to H 16428.65 Lakhs (Previous year: H 23730.27 Lakhs) under the Scheme for Extending Financial Assistance to Sugar Undertakings, 2018, of Uttar Pradesh Government is secured by pari passu first charge, by way of hypothecation of movable fixed assets (PPE), both present and future, pertaining to seven cogeneration units of the Company viz. Balrampur, Babhnan, Haidergarh, Akbarpur, Mankapur, Kumbhi and Gularia.

ii) Rupee Term Loan from ICICI amounting to H 3750.00 Lakhs (Previous year: H 5000.00 Lakhs) under the Scheme for Extending Financial Assistance to Sugar Mills for enhancement and augmentation of ethanol capacity, is secured by pari passu first charge, by way of hypothecation of all the movable fixed assets (PPE), both present and future, pertaining to Gularia distillery unit of the Company.

iii) Rupee Term Loan from HDFC amounting to H 5516.50 Lakhs (Previous year: H 7522.50 Lakhs) under the Scheme for Extending Financial Assistance to Sugar Mills for enhancement and augmentation of ethanol capacity, is secured by pari passu first charge, by way of hypothecation of all the movable fixed assets (PPE), both present and future, pertaining to Gularia distillery unit of the Company.

Nature of securities :

a) Working capital loans from banks (viz: SBI, HDFC, KOTAK and ICICI) are secured by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar units of the Company on pari passu basis with each of them.

b) Working capital loan from SBI was additionally secured by way of exclusive hypothecation of entire current assets of all the cogeneration units of the Company. The said charge has been released as per sanction letter issued during the year.

The ultimate realisation of deferred tax assets, carried forward tax losses/unabsorbed depreciation and unused tax credits is dependent upon the generation of future taxable income. Deferred tax assets including MAT credit entitlement is recognised on management''s assessment of reasonable certainty for reversal/utilisation thereof against future taxable income.

Based on the assessment of the possible impact of the new tax regime, the Company has decided to continue with existing normal tax structure till certain deductions are available and accumulated Minimum Alternate Tax (MAT) credit is substantially exhausted and thereafter, to opt for the concessional rate under new tax regime.

The amounts shown in (i) above represent the best possible estimates arrived at on the basis of available information. 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/litigations.

Also refer Note No. 36(3) (b) for availment of remission of taxes and levies pending final decision at the Hon''ble Supreme Court on the matter.

(b) Uttar Pradesh Excise Authorities have imposed payment of H 20/- per quintal on molasses transferred, sold or supplied for captive consumption with effect from 24th December 2021 as "Regulatory Fee" under amended Section 8(4) of Uttar Pradesh Sheera Niyantran Adhiniyam, 1964.

The Uttar Pradesh Sugar Mills Association and Others have filed a writ petition against the aforesaid levy before Lucknow Bench of Hon''ble Allahabad High Court. The said Court vide its Interim Order dated 25th February 2022, have deferred the realisation thereof pending final decision on the matter.

Upto 31st March 2022, the Company has deposited H449.44 Lakhs (Previous year: H Nil) "under protest" till the matter is finally decided by the Hon''ble High Court, which has been clubbed and shown with "Duties and taxes paid under protest" under Note No. 10 Other non-current assets.

It is not possible to estimate the timing/uncertainties relating to utilisation /reversal from the provision for contingencies. Future cash outflow in respect of the above is determinable only upon Court decision/out of Court settlement/disposal of appeals. The Company does not expect any reimbursement in respect of above provisions.

(b) Contingent assets

During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainties that surround the related events and circumstances. Also Refer Note No. 36(3) in this respect.

3. a) The Hon''ble High Court at Allahabad, Lucknow Bench, vide its order dated 12th February, 2019 ("Order") had quashed the

G.O. dated 4th June, 2007, vide which the Sugar Industry Promotion Policy 2004 ("SIPP") was withdrawn, and held that the petitioner companies were entitled to all the benefits for the entire period of the validity of SIPP. Consequent to this, the Company in respect of its capital projects and expansions during the period from 2004 to 2008 is entitled to the capital subsidy, reimbursement of certain expenses, remission of certain taxes and levies under the provision of the said policy.

The State Government of Uttar Pradesh and others have filed Special Leave Petitions challenging the said Order before the Hon''ble Supreme Court of India and the cases are pending for hearing as on 31st March, 2022. Pending this, the Company''s claim for reimbursement of H 33654.94 Lakhs (Previous year: H 33654.94 Lakhs) and capital subsidy of H 13137.77 Lakhs (Previous year: H 13137.77 Lakhs) pursuant to SIPP being contingent in nature, has not been recognised.

(b) In terms of SIPP, the Company availed remission of taxes and levies, namely, Entry Tax on Sugar, Trade Tax on Molasses and Cane Purchase Tax, Stamp duty and registration charges on purchase of land aggregating to H 11278.45 Lakhs in earlier years. These remissions were availed pursuant to protection earlier provided by the Hon''ble High Court at Allahabad, which has been confirmed pursuant to the Order of the said court as given in Note No. 36(3)(a) above.

In the assessment of Entry Tax on Sugar and Trade Tax on Molasses relating to four sugar units, namely, Akbarpur, Mankapur, Kumbhi and Gularia aggregating to H 6300.63 Lakhs has been assessed, though these units are also eligible for the remission under the SIPP. However, no demand has been raised and pursued against the Company in view of the protection by the Hon''ble High Court as aforesaid. Since these units are eligible for incentive under SIPP and no demand has yet been raised against the Company, the aforesaid amount of H 6300.63 Lakhs has not been considered as contingent liability.

(c) Uttar Pradesh Electricity Regulatory Commission vide notification dated 25th July, 2019 reduced the power purchase rates of bagasse-based power plants w.e.f. 1st April, 2019 and revenue in this respect has accordingly been recognised at such reduced rates. The Uttar Pradesh Cogen Association has filed a writ petition, challenging the reduction in power rates before Hon''ble High Court at Allahabad which has been admitted. Hearing for the same is scheduled for 26th May 2022.

4. The Board of Directors at its meeting held on 9th August 2021 had approved the buy-back of equity shares, amounting to H 21525.00 Lakhs (Maximum Buy-back Size, excluding transaction costs and taxes thereon) at a price not exceeding H 410/- per equity share (Maximum Buy-back Price).

At the Maximum Buy-back Price and the Maximum Buy-back Size, the indicative maximum number of equity shares to be bought back was 5250000 equity shares (Maximum Buy-back Shares), representing approximately 2.50% of the paid-up share capital of the Company. The buy-back was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchanges. The buy-back of equity shares commenced on 17th August 2021 and was completed on 21st October 2021; formalities for extinguishment of the equity shares so bought back were completed on 26th October 2021.

The Company purchased and extinguished a total of 5960000 equity shares at a volume weighted average price of H 361.14 per equity share aggregating to H 21523.88 Lakhs (excluding transaction costs and tax on buy-back) comprising of approximately 2.84% of the pre buy-back paid up equity share capital of the Company.

Consequent to the said buy-back, the equity share capital has been reduced by H 59.60 Lakhs and an amount equivalent to the face value of equity shares bought back has been transferred from Retained earnings to Capital redemption reserve and differential amount of H 21464.28 Lakhs with respect to aggregate consideration in excess of face value of the equity shares bought back has also been adjusted from Retained earnings. Further, various costs aggregating to H 114.04 Lakhs (net of tax of H 61.26 Lakhs) incurred for the same and the taxation on buy-back amounting to H 4986.76 Lakhs have also been adjusted from Retained earnings.

5. Based on the information/documents available with the Company, information as per the requirement of section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 with respect to trade payables and payable to suppliers of capital goods are as follows:

Footnotes:

(i) The Company had physically moved for export through merchant exporter 53763 MT of raw/ white sugar during the year ended 31st March, 2021 against allocated Maximum Admissible Export Quantity (MAEQ) to it for the sugar season 2019-20 and the financial assistance @ H 10448.00 per MT amounting to H 5617.16 Lakhs has been clubbed with "Export incentive and assistance" under Revenue from operations.

(ii) The total export entitlement utilised and physical export done through merchant exporter by the Company during the year ended 31st March, 2022 aggregated to 121270 MT (Previous year: 134334 MT) against the quota allocated for the sugar season 2020-21. The financial assistance earned against such exports @ H 6000.00 per MT amounting to H 7276.20 Lakhs (Previous year: H 8060.04 Lakhs) has been clubbed with "Export incentive and assistance" under Revenue from operations.

(iii) During the year ended 31st March 2021, the Company had adjusted H 1262.17 Lakhs against "Interest on short term borrowings" under Finance costs and storage charges of H 216.25 Lakhs was shown under line item "Insurance and storage charges on buffer stock" under Revenue from operations, for creation and maintenance of buffer stock as required by the Central Government.

(iv) Notification No. S.O. 3523 (E) dated 19th July, 2018 was issued by the Central Government for ''extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity'' with a view to increase production of ethanol and its supply under Ethanol Blended with Petrol (EBP) Programme, and thereby to improve the liquidity position of the sugar mills enabling them to clear cane price arrears of the farmers for which interest subvention @ 6.00% or 50.00% of rate of interest charged by banks (whichever is lower) would be borne by the Central Government for a tenure of 5 years from the date of disbursement of the loan.

Under the said scheme, HDFC Bank and ICICI Bank disbursed rupee loan aggregating to H 8024.00 Lakhs and H 5000.00 Lakhs respectively, during the year ended 31st March, 2020 which was utilised for setting up of 160 KLPD distillery at Gularia unit.

Accordingly, H 416.37 Lakhs and H 540.27 Lakhs has been adjusted with interest on long term borrowings, for the year ended 31st March, 2022 and 31st March, 2021, respectively.

(v) The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) Plan Scheme has been designed to incentivise employers for generation of new employment, where Government of India pays the 8.33% Employee Pension Scheme contribution of the employer for the new employment. Accordingly H 0.32 Lakhs and H 5.39 Lakhs have been deducted from "Contribution to provident, gratuity and other funds" under Employee benefits expense, for the year ended 31st March, 2022 and 31st March, 2021 respectively.

(vi) The Government of Uttar Pradesh vide its Order No. - 12/2018/1698 / 46-3-18-3 (36-A) / 2018 dated 28th September, 2018 notified a scheme for assistance to sugar mills under the Scheme for Extending Financial Assistance to Sugar Undertakings -

2018 of Uttar Pradesh Government, for the purpose of clearance of sugarcane price for sugar season 2016-17 and 2017-18 as per the State Advised Price of sugarcane fixed by the State Government.

Under the said scheme, during the year ended 31st March 2019, the State Government extended rupee term loan to the Company through ICICI Bank @ 5.00% p.a. interest for a period of 5 years aggregating to H 36508.11 Lakhs which was utilised for clearance of sugarcane price for sugar season 2017-18 as per the scheme.

Pursuant to the requirements of Ind AS 20 - "Accounting for Government Grants and Disclosure of Government Assistance" and Ind AS 109 - "Financial Instruments", H 4051.19 Lakhs was accounted for during the year ended 31st March, 2019 and included under Note No. 21 - "Deferred income".

Accordingly, proportionate income amounting to H 750.15 Lakhs and H 982.59 Lakhs has been adjusted with interest on long term borrowings for the year ended 31st March, 2022 and 31st March, 2021 respectively.

Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the said Act, an employee who has completed five years of continuance service is entitled to the same. The gratuity plan provides a lumpsum payment to employees at retirement, death, incapacitation or termination of employment. The level of benefits depends on the member''s length of service and salary at the time of cessation of the employment contract with the Company.

The fund is in the form of a trust and is governed by the Board of Trustees who are responsible for its administration. The Board of Trustees is responsible for the administration of the plan assets and for the definition of the investment strategy. Each year, the Board of Trustees reviews the asset-liability matching strategy, investment risk management policy. The Board of Trustees decides its contribution based on the results of this annual review.

The Company contributes ascertained liabilities towards gratuity to trust.

(c) Risks related to defined benefit plans:

The main risks to which the Company is exposed in relation to operating defined benefit plans are :

(i) Mortality risk:

The assumptions adopted by the Company is to make allowances for future improvements in life expectancy. However, if life expectancy improves at a faster rate than assumed, this would result in greater payments from the plans and consequently increases the plan''s liabilities. In order to minimise this risk, mortality assumptions are reviewed on a regular basis.

9. Employee Benefits : (contd...)

(ii) Market and liquidity risks:

These are the risks that the investments do not meet the expected returns over the medium to long term. This also encompasses the mismatch between assets and liabilities. In order to minimise the risks, the structure of the portfolios is reviewed and asset-liability matching analysis are performed on a regular basis.

(d) Asset - liability management and funding arrangements

The trustees are responsible for determining the investment strategy of plan assets. The overall investment policy and strategy for Company''s funded defined benefit plan is guided by the objective of achieving an investment return which, together with the contribution paid is sufficient to maintain reasonable control over various funding risks of the plan.

(e) Other disclosures :

The Gratuity and contribution to defined contribution plans have been recognised under ” Contribution to provident, gratuity and other funds" and Leave encashment clubbed with ” Salaries and wages" under Note No. 30 - Employee benefits expense.

The above remuneration does not include provision for gratuity and leave encashment, which is determined for the Company as a whole.

(d) The transactions with related parties have been entered at an amount which are not materially different from those on normal commercial terms.

(e) The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provision for bad or doubtful debts has been recognised in current year and previous year in respect of the amounts owed by related parties.

(f) The remuneration of directors has been determined by the Nomination & Remuneration Committee, the Board and approved by the shareholders of the Company having regard to the performance of individuals and market trends.

11. Revenue

(i) The details of performance obligation in terms of Ind AS 115 - Revenue from contracts with customers are as follows:

(a) Sugar

The Sugar segment of the Company principally generates revenue from manufacturing and sale of sugar and its by-products and power to distribution companies. Domestic sales of sugar is made on ex-factory terms/agreed terms to wholesale /institutional buyers/merchant exporters within the country. Domestic sugar sales is majorly done on advance payment terms.

Export sales of sugar to merchant exporters are done on ex-factory /delivered basis in terms of the agreement and revenue is recognised when the goods have been shipped to / delivered to the buyers'' specific location (as per agreed terms). The sale price and payment terms is fixed as per contracted terms.

Power is supplied to distribution companies from the Company''s facilities in accordance with the sale price, payment terms and other conditions as per the Power Purchase Agreements ("PPA").

Bagasse and pressmud are sold generally on advance payment terms to customers on ex-factory basis in terms of the agreement and revenue is recognised when the goods have been shipped to / delivered to the buyer.

(b) Distillery

The distillery segment of the Company principally generates revenue from sale of industrial alcohol which mainly constitutes ethanol sold under contracts with Public and Private Oil Marketing Companies ("OMCs") and other products to institutional buyers and power to distribution companies.

For sale of ethanol under contracts with OMCs, sale price is pre-determined based on Expression of Interest ("EOI")/Tender floated from OMCs. The prices are on delivered cost basis at OMC''s locations inclusive of all duties/levies/taxes/charges etc. Payment terms is within 21 days after delivery of material and submission of original invoices.

Other products like Rectified Spirit, Extra Neutral Alcohol (ENA), etc. are sold on bulk basis to institutional buyers on ex-factory basis as per agreed terms. Revenue is recognised when goods have been shipped to the buyers'' specific location as per agreed terms. The payment terms are fixed as per Company''s credit policy which is up-to 45 days.

Power is supplied to distribution companies from the Company''s facilities in accordance with the sale price, payment terms and other conditions as per the Power Purchase Agreements ("PPA").

(c) Others

Other segment principally generates revenue from sale of agricultural fertilisers such as soil conditioner, granulated potash etc.

Agricultural fertilisers such as soil conditioner, granulated potash etc. are sold to customers on ex-factory/ delivered cost basis as per agreed terms. Revenue is recognised when the goods have been shipped as per agreed terms (as the case may be). The payment terms are fixed as per Company''s credit policy which is up-to 60 days.

(ii) Disaggregated revenue information have been given along with segment information [Refer Note No. 36(12)(d)].

12. Segment information

(a) The Managing Director has been identified as the Company''s Chief Operating Decision-Maker (CODM) as defined by Ind AS 108 - Operating Segments. The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments. The CODM of the Company evaluates the segments based on their revenue growth, operating income and return on capital employed.

On a review being undertaken during the year based on the current business exigencies and reporting etc., in terms of Ind AS 108 "Operating Segments", sugar and distillery have been identified as distinctive operating segments pertaining to the Company''s operation as against sugar, co-generation and distillery followed earlier by the Company. Accordingly, segmental information for the previous periods has been compiled/restated.

In addition, revenue and expenses have been identified to a segment based on the segment''s operating activities. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable". Segment assets and segment liabilities represent assets and liabilities of respective segment. Investments, tax related assets/ liabilities and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as " Unallocable".

(i) Inter-segment revenues are eliminated upon consolidation and reflected in the ''adjustments/eliminations'' column. Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed at Company level. Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed at Company level.

(ii) Transactions between segments are primarily transferred at cost/estimated market prices. Common costs are apportioned on a reasonable basis.

(iii) Figures in brackets pertain to previous year.

Footnote:

Figures in brackets pertain to previous year.

(e) Geographical information:

Refer Note No. 36 (12) (d) above for disclosures relating to revenue disaggregated by geographical market.

(f) Information about major customers:

No single customer contributed 10% or more of the total revenue of the Company for the year ended 31st March, 2022 and 31st March, 2021.

13. Disclosure under Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Company has neither given any loan nor has advanced any amount either during the year ended 31st March, 2022 or 31st March, 2021. Hence, the requirements under the said Schedule is not applicable to the Company and no information is required to be disclosed.

14. During the year ended 31st March 2022, the Company has sold its entire shareholding of 45.00% in its associate Company viz. Visual Percept Solar Projects Pvt. Ltd. ("VPSPPL") consisting of 7852500 equity shares of H 10/- each at an agreed consideration of H 7317.71 Lakhs. Accordingly, VPSPPL ceases to be an Associate of the Company w.e.f. 15th February, 2022.

The resultant gain on sale of aforesaid investment aggregating to H 5273.75 Lakhs (Previous year: H Nil), net of transaction costs amounting to H 80.83 Lakhs (Previous year: H Nil) has been recognised and shown as "Exceptional items".

15. The Board of Directors of the Company at its meeting held on 15th September, 2017 considered and approved cumulative investment of H 17500.00 Lakhs in tranches over a period of five years in Auxilo Finserve Private Limited ("AFPL"), an unlisted NBFC based in India and engaged in financing activities in education sector.

The Company has so far acquired 155000000 (Previous year: 155000000) Equity shares of AFPL having face value of H 10/- each with total cost of H 15750.00 Lakhs (Previous year: H 15750.00 Lakhs) on preferential issue basis constituting 44.36% (Previous year: 45.05%).

B. Fair value hierarchy

The fair value of the financial assets and financial liabilities are included at an amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

Fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, trade receivables and other current financial assets, short term borrowings from banks and financial institutions, trade and other payables, and other current financial liabilities approximate their carrying amounts due to the short-term maturities of these instruments.

16. Financial instruments - Accounting, Classification and Fair value measurements (contd...)

B. Fair value hierarchy (contd...)

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

Level 2: Inputs other than 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).

17. Financial risk management objectives and policies

The Company''s principal financial liabilities includes borrowings, trade payables, other payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that derive mainly from its operations.

The Company is exposed to credit risk, liquidity risk and market risk. The Company''s senior management under the supervision of Board of Directors oversees the management of these risks. The Company''s financial risks are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(a) Market risk

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

(i) Interest rate risk

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 Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s borrowings obligations.

Sugar is produced over a period of 4 to 5 months and is required to be stored for sale over a period of 12 months, thereby resulting in very high requirement of working capital. Cost of funding depends on the overall fiscal environment in the country as well as the Company''s credit worthiness /credit ratings. Failure to maintain credit rating can adversely affect the cost of funds.

To mitigate the interest rate risk, the Company maintains an impeccable track record and ensures long term relation with the lenders to raise adequate funds at competitive rates. Company has access to low cost borrowings because of its healthy Balance Sheet. Moreover, Company deals with four banks thereby reduces risk significantly. In addition, steady revenue from distillery business reduces the overall requirement of working capital.

As at 31st March 2022, the Company has outstanding non-current borrowings, aggregating to H 25695.15 Lakhs (Previous year: H 36252.77 Lakhs), out of which non-current borrowings of H 9266.50 Lakhs (Previous year: H 12522.50 Lakhs) are linked to variable interest rates and are covered under interest subvention scheme [Refer Note No. 18(i) and footnote (iv) to Note No. 36(8)]. Thus, 25 bps increase / decrease in the interest rate will not have a material impact in the Statement of Profit and Loss.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. To mitigate foreign exchange risk, the Company covers its position through permitted hedging methods. There was no foreign currency exposure as at 31st March, 2022 and 31st March, 2021.

(iii) Commodity price risk

The major segment in which the Company operates, which accounts for around 80.00% of the Company''s total revenue, is Sugar and as such the Company is exposed to commodity price risk.

The Company''s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation.

Domestic sales quotas are announced by the Government on monthly basis. Further, there are not many active platforms in India that allow hedging of domestic sugar sales. In addition to the above, the Central Government had announced Minimum Sale Price (MSP) for sale of sugar in the open market by every sugar mill. Such MSP, currently at H 31/- per kilogram acts as a minimum floor price for the sale of sugar by the sugar mills in India.

The pricing methodology for ethanol also remained unchanged. Ethanol prices are announced annually by the Central Government, which are generally not linked with the crude or petrol prices. Thus, there is no material price risk in this respect.

(iv) Other price risk:

The Board of Directors reviews and approves equity investment decisions. Company''s equity risk exposure is limited to cost and these are subject to impairment testing as per the policies followed in this respect. Accordingly, other price risk is not expected to be material.

(b) Credit risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including borrowings from banks and financial institutions. The Company''s sugar sales are mostly on cash. Power is sold to government entities and ethanol is sold under contracts with Public and Private Oil Marketing Companies ("OMCs"). The Company keeps a close watch on the realisation of the outstanding amounts and has not experienced any significant default.

The Company uses judgement in making the assumptions and selecting the inputs for assessing the impairment calculation, based on the Company''s past history, existing market conditions, and future estimates at the end of each balance sheet date. Impairment allowance against financial assets is created and subsequently written off when there is no reasonable expectation of recovery. However, the Company continues to recover the receivables. Where recoveries are made, these are recognised in the Standalone Statement of Profit and Loss.

(i) Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing; Refer Note No. 36(11) for credit terms.

An impairment analysis is performed at each balance sheet date on an individual basis for major customers. Also, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the balance sheet date is the carrying value of each financial assets class disclosed under Note No. 7.

(ii) Balances with banks

Credit risk for balances with banks is managed in accordance with the Company''s policy.

The Company''s maximum exposure to credit risk for the components of the Standalone balance sheet as at 31st March, 2022 and 31st March, 2021 is the carrying amounts as stated under Note No. 13 and 14.

(c) Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning tool. The Company''s objective is to meet the funding requirement and maintain flexibility in this respect through the use of cash credit facilities, short term loans and commercial papers.

18. Capital Management (a) Risk management

For the purpose of the Company''s capital management, capital includes issued equity capital, and all other equity reserves attributable to the Company''s equity shareholders. The Company''s objective while managing capital is to safeguard its ability to continue as a going concern and continue to provide returns to shareholders and other stakeholders.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the financial covenants'' requirements and return of capital to shareholders.

To achieve this overall objective, the Company''s capital management, amongst other things, also aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings. The Company has complied with these covenants. There have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2022 and 31st March, 2021.

(ii) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

20. The Schedule III to the Companies Act 2013 vide notification dated 24th March 2021 issued by Ministry of Corporate Affairs (MCA) has been amended with effect from 1st April 2021 and these standalone financial statements have been prepared giving effect to the said amendments.

Further, on the review being undertaken during the year in terms of Ind AS 108 "Operating Segments", sugar and distillery have been identified as distinct operating segments pertaining to the Company''s operation.

Accordingly, comparative figures of the previous year have been compiled/restated and disclosed wherever applicable to make them comparable with those of the current years'' figures.


Mar 31, 2018

Note No. : 1 Corporate information

Balrampur Chini Mills Limited (“BCML” or “the Company”) is a public limited company incorporated and domiciled in India and has its registered office situated at FMC Fortuna, 2nd floor, 234/3A, A.J.C. Bose Road, Kolkata - 700020, West Bengal, India.

The Company’s shares are listed on the BSE Ltd., National Stock Exchange of India Ltd. and The Calcutta Stock Exchange Ltd.

The Company is one of the largest integrated sugar manufacturing companies in India. The principal activity of the Company is manufacturing and sale of sugar. Besides this, the allied business activities undertaken by the company primarily consists of manufacturing and sale of Ethyl Alcohol, Ethanol and generation and sale of power.

The financial statements for the year ended 31st March, 2018 were approved for issue by the Board of Directors of the Company on 19th May, 2018 and is subject to the adoption by the shareholders in the ensuing Annual General Meeting.

* The Board of Directors of the Company, at their meeting held on 15th September, 2017, allotted 360 equity shares of par value of RS.1 each of the Company at a price of RS.26 per equity share (including premium of RS.25 per equity share) on rights basis out of the Rights Issue 2004. These shares were kept in abeyance out of the Rights Issue 2004 due to pendency of certain disputes.

@ RS.360/- shown as nil due to rounding off.

(d) The Company has only one class of equity shares. The Company declares and pays dividend in Indian Rupees. The holders of equity shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share.

(e) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

(g) The aggregate number of equity shares issued pursuant to Scheme of amalgamation without payment being received in cash in immediately preceding last five years - 31st March, 2018 - 526894 equity shares (previous period of five years ended 31st March, 2017 - 526894 equity shares).

(h) The aggregate number of equity shares bought back in immediately preceding last five years ended 31st March, 2018 - 16600000 equity shares (previous period of five years ended 31st March, 2017 - 10000000 equity shares).

(i) The Company has reserved 35500 (Previous year 68000) equity shares of par value HI/- each for issue at a premium of RS.44/- each to eligible employees of the Company under Employee Stock Option Scheme. Refer note no. 38(3) for terms of Employee Stock Option Scheme.

Notes:

i) Capital reserve comprises of reserve arising consequent to business combination in earlier years, in accordance with applicable accounting standard and court’s order as on that date.

ii) Capital redemption reserve is created consequent to redemption of preference share capital and buy back of shares. This reserve shall be utilised in accordance with the provisions of the Act.

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

iv) The share options outstanding account is used to record the value of equity-settled share based payment transactions with employees under its employee share option plan. The amounts recorded in share options outstanding account are transferred to securities premium reserve upon exercise of stock option by employees.

v) The general reserve represents amount kept by the Company out of its profits for future purposes and reserve aggregating to RS.4224.23 Lacs (Previous year RS.4224.23 Lacs) arising consequent to business combination in earlier years, in accordance with applicable accounting standard and court’s order as on that date. It is not earmarked for any specific purpose.

vi) The storage fund for molasses has been created to meet the cost of construction 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 RS.176.29 Lacs (Previous year RS.149.56 Lacs).

vii) Retained earnings represents the undistributed profit / amount of accumulated earnings of the Company.

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

a) Nature of securities for the aforesaid borrowings including current maturities of long term debt:

i) Rupee Term Loan from SBI amounting to RS.5833.60 Lacs (previous year RS.11666.80 Lacs) under Scheme for Extending Financial Assistance to Sugar Undertakings, 2014, is secured by pari passu first charge, by way of hypothecation of all the movable and immovable fixed assets, both present and future, pertaining to all the ten sugar divisions of the Company viz; Balrampur, Babhnan, Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur.

ii) Rupee Term Loan from PNB amounting to RS.1546.73 Lacs (previous year RS.3234.06 Lacs) under Scheme for Extending Financial Assistance to Sugar Undertakings, 2014, is secured by residual charge, by way of hypothecation of all the movable fixed assets, both present and future, pertaining to all the ten sugar divisions of the Company.

iii) Rupee Term Loan from HDFC amounting to RS.3450.00 Lacs (previous year RS.3450.00 Lacs) is secured by first charge, by way of hypothecation of movable fixed assets, both present and future, pertaining to Company’s distillery divisions at Babhnan and Mankapur.

iv) Rupee Term Loan from SDF amounting to RS.1600.21 Lacs (previous year RS.2133.61 Lacs) is secured by an exclusive second charge by way of equitable mortgage on immovable properties and hypothecation of movable properties (excluding current assets and book debts), both present and future, pertaining to Company’s sugar and cogeneration divisions at Rauzagaon.

v) Release of securities in respect of a long-term loan fully repaid by the Company is pending.

Nature of securities :

(a) Working capital loans from SBI are secured / to be secured:

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar divisions of the Company on pari passu basis with PNB, HDFC and ICICI.

ii) by way of exclusive hypothecation of entire current assets of all the Cogeneration units of the Company.

iii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and future, of all the ten sugar divisions of the Company on pari passu with PNB and HDFC.

b) Working capital loans from PNB are secured / to be secured:

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar divisions of the Company on pari passu basis with SBI, HDFC and ICICI.

ii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and future, of all the ten sugar divisions of the Company on pari passu with SBI and HDFC.

c) Working capital loans from HDFC are secured / to be secured:

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar divisions of the Company on pari passu basis with SBI, PNB and ICICI.

ii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and future, of all the ten sugar divisions of the Company on pari passu with SBI and PNB.

d) Working capital loans from ICICI are secured:

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar divisions of the Company on pari passu basis with SBI, HDFC and PNB.

The ultimate realisation of the deferred tax assets, carried forward losses and unused tax credits is dependent upon the generation of future taxable income. Based on the historical taxable income and projection of future taxable income management believes that the Company will realise the assets carried forward as deferred tax assets.

Considering the probability of future taxable profits and following principle of prudence, deferred tax assets of RS.10819.53 Lacs (Previous year RS.3890.99 Lacs) have not been recognised in respect of some portion of unutilized MAT credit which is expiring during various assessment years upto assessment year 2033-34.

The amounts shown in (i) above represent the best possible estimates arrived at on the basis of available information. The uncertainties and timing of the cash flows are dependent on the final 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.

2. Disclosures as required by Indian Accounting Standard (Ind AS) 37 Provisions, Contingent liabilities and Contingent assets:

(a) Provision for contingencies

(i) Provisions for contingencies represent provision towards various claims made/anticipated in respect of duties and taxes and other claims against the Company based on the Management’s assessment.

It is not possible to estimate the timing/uncertainities relating to utilisation /reversal from the provision for contingencies. Future cash outflow in respect of the above is determinable only upon Court’s decision/out of Court settlement/disposal of appeals. The Company does not expect any reimbursement in respect of above provisions.

Contingent assets

During the normal course of business, several unresolved claims are currently outstanding. The inflow of economic benefits, in respect of such claims cannot be measured due to uncertainities that surround the related events and circumstances. Also refer Note No. 38(14)(b).

3. The Employee Stock Option Scheme 2005 (Scheme 2005) of the Company was formulated by the Committee of the Board of Directors of the Company and approved by the Board at its meeting held on 11th August, 2005, and 31st October, 2005 and by the shareholders at the Extraordinary General Meeting of the Company held on 8th September, 2005 and in accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 prescribed by the Securities and Exchange Board of India.

Employees covered under the Employee Stock Option Scheme are granted an option to purchase equity shares of the Company at the exercise price determined by the Remuneration Committee (presently re-named as “Nomination & Remuneration Committee”) on the date the option is granted. It is based on the average daily closing market price of the equity shares of the Company during the preceding 26 weeks, prior to the date of grant.

Under the said Scheme, Options granted have vesting period of one year and exercise period of maximum eight years.

The shareholders of the Company at their Extraordinary General Meeting held on 25th May, 2009 had accorded approval to re-price the exercise price of the options granted in the years 2005-06 (1st series), 2006-07 (2nd series), 2007-08 (3rd series), and 2008-09 (4th series), which have not been exercised, and also to the exercise price in respect of options to be granted for the year 2008-09 (5th series), at 20% discount to the average daily closing market price of the Company’s share, on the stock exchange it is traded most, during the preceding 26 weeks prior to the date of the meeting. Accordingly, the Remuneration Committee (presently re-named as “Nomination & Remuneration Committee”) on 28th May, 2009 had re-priced the exercise price of the unexercised options for the years 2005-06 (1st series), 2006-07 (2nd series), 2007-08 (3rd series) and 2008-09 (4th series) and granted stock options for the year 2008-09 (5th series) at an exercise price of RS.45/- per equity share.

The maximum number of options granted till date stands at 5245500 and each option is equivalent to one equity share of par value of RS.1/- each of the Company.

Total Number of Options outstanding/exercisable as at 1st April, 2016 relating to 1st and 2nd series is Nil. Therefore, details for the same has been excluded from above table.

The weighted average share price of options exercised during the year ended 31st March, 2018 was RS.45/- (Previous year: RS.45/-) for each option.

There were no modifications to the terms of Scheme 2005 either in the current year or in the previous years other than the re-repricing as stated above.

Other information:

a) Options vested upto 31st March, 2018: 4593000 (Previous year: 4593000)

b) Options exercised upto 31st March, 2018: 4422500 (Previous year: 4395000)

c) Options exercised during the year ended 31st March, 2018: 27500 (Previous year: 60700)

d) Total number of equity shares arising as a result of exercise of options as at 31st March, 2018 : 4422500 (Previous year: 4395000) (Options equivalent to 10000 equity shares were exercised within 31st March, 2018, however, the same were due to be allotted as on 31st March, 2018.

e) Options lapsed upto 31st March, 2018: 797500 (Previous year: 782500)

f) Options lapsed during the year ended 31st March, 2018 : 15000 (Previous year: 29500)

g) Money realised on exercise of options upto 31st March, 2018 : RS.2014.29 lacs (Previous year : RS.2001.92 lacs )

h) Money realised on exercise of options during the year ended 31st March, 2018 : RS.12.37 lacs (Previous year : RS.27.31 lacs)

i) Total number of options in force as at 31st March, 2018 : 25500 (Previous year : 68000)

j) Details of option granted to :-

(i) Senior Managerial Personnel: No options have been granted either during the year ended 31st March, 2018 or during the year ended Previous year,

(ii) Any other employee who receives a grant in any one year of options amounting to 5% or more of options granted during the year ended 31st March, 2018 - Nil (Previous year - Nil), and

(iii) Identified employees who were granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - Nil (Previous year - Nil).

4. Based on the information/documents available with the Company, information as per the requirement of section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 with respect to trade payables and payable to suppliers of capital goods are as follows:

Note:

(i) The Central Government pursuant to Notification No. 1(5)/2018-S.P.-I dated 9th May, 2018 issued by the Hon’ble Ministry of Consumer Affairs, Food and Public Distribution (Department of Food and Public Distribution) has notified a scheme for assistance to sugar mills against sugar cane crushed during sugar season 2017-18. Accordingly, RS.4792.83 Lacs has been adjusted during the year ended 31st March, 2018 as reduction in cost of materials consumed. Valuation impact with respect to 69347.00 MT of Sugar allocated for export in terms of Minimum Indicative Export quotas (MIEQ) under tradable export scrip schemes has also been given effect to in these accounts.

(ii) The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) has been designed to incentivise employers for generation of new employment, where the Government of India will be paying the 8.33% Employee Pension Scheme contribution of the employer for the new employment.

(b) Cane commission subsidy no longer receivable was written off and shown under Note No. 35 - “Other expenses” aggregating to RS.2106.83 Lacs during the year ended 31st March, 2017 on account of reimbursement of society cane commission being no longer receivable pursuant to the notification dated 28th December, 2016 issued by the Government of Uttar Pradesh.

* The weighted average number of shares takes into account the weighted average effect of changes in number of shares due to buy back of shares and employee stock options during the year ended 31st March, 2018 and 31st March, 2017.

5. Buy back of shares

(i) Year ended 31st March, 2018

The Board of Directors of the Company at its meeting held on 21st February, 2018 approved buyback of 6600000 equity shares of the Company, through the “Tender Offer” route using the Stock Exchange Mechanism, for an aggregate amount of RS.9900.00 Lacs (being 6.78% of the total Paid-up Equity Share Capital and Free Reserves of the Company as on 31st March, 2017), at a price of RS.150/-per Equity Share on a proportionate basis in accordance with the Companies Act, 2013 (as amended), rules made thereunder, the SEBI (Buy Back of Securities) Regulations, 1998 and other applicable circulars, clarifications and notifications and the settlement in respect of shares bought back have been completed on 28th March, 2018. Formalities pertaining to extinguishment of the shares bought back have since been completed on 4th April, 2018.

Consequent to the said buy-back, the equity share capital has been reduced by RS.66.00 Lacs and Capital Redemption Reserve of an equivalent amount has therefore been created.

(ii) Year ended 31st March, 2017

The Company had undertaken a Buy Back of 10000000 fully paid-up equity shares of face value HI/- each, representing 4.08% of the total number of Equity Shares of the Company, on a proportionate basis, through the Tender Offer route, at a price of RS.175/- per Equity Share for an aggregate amount of RS.17500.00 Lacs which was 14.72% and 14.75% of the aggregate of the fully paid-up equity share capital and free reserves as per the standalone and consolidated audited accounts of the Company for the financial year ended 31st March, 2016, respectively.

Consequent to the said buy-back, the equity share capital had reduced by RS.100.00 Lacs and Capital Redemption Reserve of an equivalent amount has therefore been created.

6. Employee Benefits :

As per Ind AS - 19 “Employee Benefits” the disclosures of Employee Benefits are as follows:

Defined Contribution Plan :

Employee benefits in the form of Provident Fund, Employee State Insurance Corporation (ESIC) and Labour Welfare Fund are considered as defined contribution plan.

The contributions to the respective fund are made in accordance with the relevant statute and are recognised as expense when employees have rendered service entitling them to the contribution. The contributions to defined contribution plan, recognised as expense in the Statement of Profit and Loss are as under:

Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the said Act, an employee who has completed five years of continuance service is entitled to specific benefit. The Gratuity plan provides a lumpsum payment to employees at retirement, death, incapacitation or termination of employment. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund is in the form of a trust and is governed by the Board of Trustees who are responsible for its administration. The Company contributes all ascertained liabilities towards gratuity to the trust.

The following tables summarises the components of net benefit expense recognised in the Statement of Profit and Loss, the funded status and amounts recognised in the Balance Sheet for the said plan:

The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring as at the Balance Sheet date.

All sensitivities are calculated using the same actuarial method as for the disclosed present value of the defined benefits obligation at year end.

(c) Risks related to defined benefit plans:

The main risks to which the Company is exposed in relation to operating defined benefit plans are :

(i) Mortality risk: The assumptions adopted by the Company make allowances for future improvements in life expectancy. However, if life expectancy improves at a faster rate than assumed, this would result in greater payments from the plans and consequently increases the plan’s liabilities. In order to minimise this risk, mortality assumptions are reviewed on a regular basis.

(ii) Market and liquidity risks: These are the risks that the investments do not meet the expected returns over the medium to long term. This also encompasses the mismatch between assets and liabilities. In order to minimise the risks, the structure of the portfolios is reviewed and asset-liability matching analysis are performed on a regular basis.

(d) Asset - liability management and funding arrangements

The trustees are responsible for determining the investment strategy of plan assets. The overall investment policy and strategy for Company’s funded defined benefit plan is guided by the objective of achieving an investment return which, together with the contribution paid is sufficient to maintain reasonable control over various funding risks of the plan.

(e) Other disclosures :

(i) The following are the assumptions used to determine the benefit obligation:

Discount rate:

The yield of government bonds are considered as the discount rate. The tenure has been considered taking into account the past long term trend of employees’ average remaining service life which reflects the average estimated term of the post - employment benefit obligations.

Rate of escalation in salary :

The estimates of rate of escalation in salary, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

Rate of return on plan assets:

Rate of return for the year was the average yield of the portfolio in which the Company’s plan assets are invested over a tenure equivalent to the entire life of the related obligation.

Attrition rate :

Attrition rate considered is the management’s estimate based on the past long- term trend of employee turnover in the Company.

ii) The Gratuity and provident fund expenses have been recognised under “ Contribution to provident and other funds” and Leave Encashment under Salaries and Wages under Note No. 32 - Employee benefits expense.

7. Segment information

a) The Managing Director has been identified as the Company’s chief operating decision-maker (CODM) as defined by Ind AS 108 -Operating Segments. The Chief Operating Decision Maker (CODM) evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by business segments. The CODM of the Company evaluates the segments based on their revenue growth, operating income and return on capital employed. No operating segments have been aggregated in arriving at the Business Segment of the Company.

The Management has determined the operating segments based on the information reviewed by the CODM for the purposes of allocating resources and assessing performance. The Company has identified three business segments viz. Sugar, Cogeneration and Distillery presented the same in the financial statements on a consistent basis. 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 “Unallocable”.

Segment assets and segment liabilities represent assets and liabilities of respective segment. Investments, tax related assets/ liabilities and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as “Unallocable”.

The above remuneration does not include provision for gratuity and leave, which is determined for the Company as a whole.

d) The transactions with related parties have been entered at an amount which are not materially different from those on normal commercial terms.

e) The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No expense has been recognised in current year and previous year for bad or doubtful debts in respect of the amounts owed by related parties.

f) The remuneration of directors is determined by the Nomination & Remuneration Committee having regard to the performance of individuals and market trends.

8. Disclosure under Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Company has neither given any loan nor has advanced any amount either during the year ended 31st March, 2018 or year ended 31st March, 2017. Hence, the requirements under the said Schedule is not applicable to the Company and no information is required to be disclosed.

9. Details of loans and investments covered under section 186 (4) of the Companies Act, 2013 :

Details of loans given and investments made are given in the respective note.

10. (a) The Company’s Writ Petition against withdrawal of the New Sugar Industry Promotion Policy 2004 admitted by the Lucknow

Bench of the Hon’ble Allahabad High Court vide its order dated 9th May, 2008 is pending for decision. As an interim measure, the Order permits limited protection from remission of taxes namely Entry Tax on Sugar, Trade Tax on Molasses and Cane Purchase Tax. Accordingly, the Company continued to avail remission of these taxes and levies and RS.120.44 Lacs (Previous year RS.56.84 Lacs) has been accrued for in this respect.

In the assessment of Entry Tax on Sugar and Trade Tax on Molasses for the years 2008-09 to 2014-15, relating to four sugar units, namely, Akbarpur, Mankapur, Kumbhi and Gularia aggregating to RS.5909.42 Lacs (including RS.1366.33 Lacs pertaining to 2013-14 and 2014-15 determined during the year ended 31st March, 2018) has been assessed, though these units are also eligible under the aforesaid scheme. However, no demand has been raised on the Company in view of the limited protection by the Hon’ble High Court as aforesaid. These units are eligible for incentive, pending decision of the Court and the protection available in this respect, therefore, the aforesaid amount of RS.5909.42 Lacs has not been considered as contingent liability.

(b) The Company’s claim for recoverable incentive under the New Sugar Industry Promotion Policy, 2004 of the Government of Uttar Pradesh is pending for decision by the Lucknow Bench of the Hon’ble Allahabad High Court.

Amount receivable against the aforesaid claim being unascertainable and contingent in nature would be accounted for on final decision.

11. The Company had entered into a Share Purchase Agreement (SPA) on 27th January, 2017 inter-alia with Ganesh Explosives Pvt. Ltd. (GEPL) for sale of its entire shareholding of 53.96% in Indo Gulf Industries Ltd. (IGIL) consisting of 5162470 equity shares of HI/- each subject to compliance and completion of the formalities under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“SEBI (SAST) Regulations, 2011”) and the conditions precedent in terms of the SPA.

Pursuant to the completion of the Open Offer formalities by the acquirer (GEPL), IGIL had ceased to be the Subsidiary of the Company w.e.f. 19th May, 2017.

12. Exercise of Call Option Agreement

On 24th January, 2017, the Company had exercised the said Call Option and acquired 8914500 equity shares of VPSPPL at RS.25/- per equity share of RS.10/- each fully paid up, constituting 45% of the voting rights of VPSSPL pursuant to which, VPSPPL became an associate of the Company.

13. The Board of Directors of the Company at its meeting held on 15th September, 2017 considered and approved an investment upto RS.3750.00 lacs as first tranche and a cumulative investment of RS.17500.00 lacs in tranches over a period of five years in Auxilo Finserve Private Limited (“AFPL”), a non-listed NBFC private limited company based in India and engaged in financing activities in education sector. The objects of the said Company includes but not limited to invest into financing activities in education sector in India.

On 20th March, 2018, the Company was alloted 37500000 Equity shares of AFPL at par value of RS.10 each aggregating to RS.3750.00 lacs on preferential issue basis constituting 50% of the the shareholding in AFPL, pursuant to which, AFPL became an associate Company.

B. Fair value hierarchy

The fair value of the financial assets and financial liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

i) Fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, trade and other receivables, loans and other current financial assets, current borrowings, trade and other payables and other current financial liabilities approximate their carrying amounts due to the short-term maturities of these instruments.

ii) The carrying value of debentures approximate their fair value as the instruments are at prevailing market rate.

The Company uses the following fair value hierarchy for determining and disclosing the fair value of financial instruments: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than 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).

The following tables provide the fair value hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis:

(i) Financial assets and financial liabilities measured at fair value on a recurring basis as at 31st March, 2018:

There have been no transfers between Level 1 and Level 2 either during the year ended 31st March, 2018 or year ended 31st March, 2017.

Description of significant unobservable inputs to valuation:

The following table shows the valuation technique and inputs for financial instruments:

14. Financial risk management objectives and policies

The Company’s principal financial liabilities includes borrowings, trade payables and other financial liabilities.

The Company’s principal financial assets include trade receivables, cash and cash equivalents and other financial assets.

The Company is exposed to credit risk, liquidity risk and market risk. The Company’s senior management under the supervision of Board of Directors oversees the management of these risks. The policies framed with respect to risks summarised below provides assurance that the Company’s financial risks are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other risks, such as regulatory risk and commodity price risk.

(i) Interest rate risk

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 Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings obligations. These borrowings are at floating rate of interest and to that extent risk arising due to fluctuation thereof is mitigated to certain extent.

(ii) Foreign currency risk

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

(iii) Commodity price risk

Sugar industry being cyclical in nature, realisations get adversly affected during downturn. Higher cane price or higher production than the demand ultimately affect profitability. The Company has mitigated this risk by well integrated business model by diversifying into cogeneration and distillation, thereby utilising the by-products.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company’s sugar sales are mostly on cash. Power and ethanol are sold to government entities, thereby the credit default risk is significantly mitigated.

The Company uses judgement in making these assumptions and selecting the inputs for assessing the impairment calculation, based on the Company’s past history, existing market conditions as well as future estimates at the end of each balance sheet date.

Financial assets are written off when there is no reasonable expectation of recovery, however, the Company continues to attempt to recover the receivables. Where recoveries are made, these are recognised in the Statement of Profit and Loss.

(i) Trade receivables

Trade receivables are non-interest bearing and are generally on credit terms of 3 to 60 days.

An impairment analysis is performed at each balance sheet date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the balance sheet date is the carrying value of each class of financial assets disclosed under Note No. 7.

(iii) Balances with banks

Credit risk from balances with banks is managed in accordance with the Company’s policy.

The Company’s maximum exposure to credit risk for the components of the balance sheet as at 31st March, 2018 and 31st March, 2017 is the carrying amounts as stated under Note No. 13 and 14.

(c) Liquidity risk

The Company’s objective is to meet the funding requirment and maintain flexibility in this respect through the use of cash credit facilities, short term loans and commercial papers.

15. Capital management (a) Risk management

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company. The Company’s objective while managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide returns to shareholders and other stake holders.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of the financial covenants and return of capital to shareholders.

In order to achieve this overall objective, the Company’s capital management, amongst other things, also aim to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2018 and 31st March, 2017.

16. The previous year’s figures have been regrouped, rearranged and reclassified wherever necessary to make them comparable with those of the current year’s figures.


Mar 31, 2017

1. Corporate information

Balrampur Chini Mills Limited (“BCML” or “the Company”) is a public limited company incorporated and domiciled in India. The registered office of the Company is situated at FMC Fortuna, 2nd floor, 234/3A, AJC Bose Road, Kolkata - 700020, West Bengal, India.

The Company’s shares are listed on the BSE Ltd., National Stock Exchange of India Ltd. and The Calcutta Stock Exchange Ltd.

The Company is one of the largest integrated sugar manufacturing companies in India. The principal activity of the Company is manufacturing of sugar.

Its allied business consists of :

(a) Manufacturing and marketing of Ethyl Alcohol and Ethanol, and

(b) Generation and sale of power.

The financial statements for the year ended 31st March, 2017 was approved for issue by the Board of Directors of the Company on 27th May, 2017 and is subject to the adoption by the shareholders in the ensuing Annual General Meeting.

Note No. : 2 Use of critical estimates, judgements and assumptions

The preparation of the financial statements requires the use of accounting estimates, which, by definition would seldom equal the actual results. Management also needs to exercise judgement and make certain assumptions in applying the Company’s accounting policies and preparation of financial statements.

The use of such estimates, judgements and assumptions affect the reported amounts of revenue, expenses, assets and liabilities including the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the future periods. Estimates and judgements are continuously evaluated. They are based on historical experience and other factors including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are described below.

The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

In the process of applying the Company’s accounting policies, management has made the following judgements, which have most significant effect on the amounts recognised in the financial statements.

i) Estimated useful life of Property, plant and equipment

PPE represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual value of the asset are determined by the management when the asset is acquired and reviewed periodically including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their lives, such as change in technology.

ii) Recognition of deferred tax assets for carried forward tax losses and unused tax credit

Deferred tax assets are recognised for unused losses (carry forward of prior years’ losses) and unused tax credit to the extent that it is probable that taxable profit would be available against which the losses could be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

iii) Estimation of Defined benefit obligations

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation 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 and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each financial year end.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans, the actuary considers the interest rates of government bonds.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

iv) Estimated fair value of unlisted securities

The fair values of financial instruments that are not traded in an active market and cannot be measured based on quoted prices in active markets is determined using valuation techniques including the discounted cash flow (DCF) model. The Group uses its judgement to select a variety of method / methods and make assumptions that are mainly based on market conditions existing at the end of each financial year.

The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

v) Insurance claims and liquidated damages

Insurance claims are accounted as and when admitted/settled. Subsequent changes in value, if any, are provided for.

a) Nature of securities:

i) Rupee Term Loan from SBI amounting to RS.11666.80 lacs (31st March, 2016: RS.17500.00 lacs and 1st April, 2015: RS.17500.00 lacs) under Scheme for Extending Financial Assistance to Sugar Undertakings, 2014, is secured by pari passu first charge, by way of hypothecation of all the movable and immovable fixed assets, both present and future, pertaining to all the ten sugar divisions of the Company viz; Balrampur, Babhnan, Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur.

ii) Rupee Term Loan from SBI amounting to Nil (31st March, 2016: RS.13638.00 lacs and 1st April, 2015: Nil) under the Soft Loan Scheme, was secured by pari passu first charge on all the movable and immovable fixed assets of ten sugar divisions of the Company viz; Balrampur, Babhnan, Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur. The said amount has been fully repaid during the year.

iii) Rupee/FCNR-B Term Loan from SBI amounting to Nil (31st March, 2016: RS.12636.95 lacs and 1st April, 2015: RS.15282.20 lacs) was secured by first charge, by way of hypothecation of movable fixed assets, both present and future, pertaining to Company’s sugar and cogeneration divisions at Balrampur, Akbarpur and Mankapur and was further secured by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the sugar divisions of the Company. The hypothecation charge on the stocks as mentioned above ranked pari passu with PNB and HDFC for their Working capital loans. The said amount has been fully repaid during the year.

iv) Rupee Term Loan from PNB amounting to RS.3234.06 lacs (31st March, 2016: RS.4921.39 lacs and 1st April, 2015: RS.5062.00 lacs) under Scheme for Extending Financial Assistance to Sugar Undertakings, 2014, is secured by residual charge, by way of hypothecation of all the movable fixed assets, both present and future, pertaining to all the sugar divisions of the Company.

v) Rupee Term Loan from PNB amounting to Nil (31st March, 2016: RS.3250.00 lacs and 1st April, 2015: Nil) was secured by pari passu first charge, by way of hypothecation on the fixed assets of Mankapur distillery division of the Company. The said amount has been fully repaid during the year.

vi) Rupee Term Loan from PNB amounting to Nil (31st March, 2016: RS.3116.00 lacs and 1st April, 2015: Nil) under the Soft Loan Scheme, was secured by pari passu first charge on all the movable and immovable fixed assets of ten sugar divisions of the Company viz; Balrampur, Babhnan, Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur. The said amount has been fully repaid during the year.

vii) Rupee Term Loan from HDFC amounting to RS.3450.00 lacs (31st March, 2016: RS.3600.00 lacs and 1st April, 2015: RS.3600.00 lacs) is secured by first charge, by way of hypothecation of movable fixed assets, both present and future, pertaining to Company’s distillery divisions at Babhnan and Mankapur.

viii) Rupee Term Loan from HDFC amounting to Nil (31st March, 2016: RS.2900.00 lacs and 1st April, 2015: Nil) was secured by pari passu first charge, by way of hypothecation of the movable fixed assets of Balrampur distillery division of the Company. The said amount has been fully repaid during the year.

ix) Rupee Term Loan from HDFC amounting to Nil (31st March, 2016: RS.3150.00 lacs and 1st April, 2015: Nil) under the Soft Loan Scheme, was secured by pari passu first charge on all the movable and immovable fixed assets of ten sugar divisions of the Company viz; Balrampur, Babhnan, Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur. The said amount has been fully repaid during the year.

x) Rupee Term Loans from SDF amounting to RS.2133.61 lacs (31st March, 2016: RS.2667.01 lacs and 1st April, 2015: RS.2667.01 lacs) is secured by an exclusive second charge by way of equitable mortgage on immovable properties and hypothecation of movable properties (excluding current assets and book debts), both present and future, pertaining to Company’s sugar and cogeneration divisions at Rauzagaon.

xi) Release of securities in respect of a long - term loan fully repaid by the Company is in progress.

b) Terms of repayment:

* Entitled for interest subvention from Sugar Development Fund up to 12.00% p.a. o° Except last four installments ofRs. 1458.40 lacs each.

# Bank rate as prevailing on the date of disbursement.

@ Including Rs. 176.08 lacs on account of effective interest rate adjustment.

A Including Rs. (39.22) lacs on account of effective interest rate adjustment.

AA Including Rs. (64.32) lacs on account of effective interest rate adjustment.

t Including Rs. (664.21) lacs on account of effective interest rate adjustment in the nature of Government Grant,

tt Including Rs. (151.32) lacs on account of effective interest rate adjustment in the nature of Government Grant,

ttt Including Rs. (153.24) lacs on account of effective interest rate adjustment in the nature of Government Grant.

Nature of securities :

a) Working capital loans from SBI are secured / to be secured:

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar divisions of the Company on pari passu basis with PNB and HDFC.

ii) by way of exclusive hypothecation of entire current assets of all the Cogeneration divisions of the Company.

iii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and future, of all the ten sugar divisions of the Company on pari passu with PNB and HDFC.

b) Working capital loans from PNB are secured/to be secured :

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar divisions of the Company on pari passu basis with SBI and HDFC.

ii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and future, of all the ten sugar divisions of the Company on pari passu with SBI and HDFC.

c) Working capital loans from HDFC are secured / to be secured:

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the ten sugar divisions of the Company on pari passu basis with SBI and PNB.

ii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and future, of all the ten sugar divisions of the Company on pari passu with SBI and PNB.

In assessing the realisability of the deferred tax assets, management cosniders whether some portion or all of the deferred tax assets will not be realized.

The ultimate realisation of the deferred tax assets, carried forward losses and unused tax credits is dependent upon the generation of future taxable income during the periods in which the temporary difference become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and the planning strategies in making this assessment. Based on the historical taxable income and projection of future taxable income over the periods in which the deferred tax assets are deductible, management believes that the Company will realise the benefits of those recognised deductible differences, carried forward losses and portion of unused tax credits. Considering the probability of future taxable profits in the period in which MAT credit expire, deferred tax assets have not been recognized in respect of some portion of MAT credit carried forward by the Company.

The amounts shown in (i) above represent the best possible estimates arrived at on the basis of available information. 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.

2. The Employee Stock Option Scheme 2005 (Scheme 2005) of the Company was formulated by the Committee of the Board of Directors of the Company and approved by the Board at its meeting held on 11th August, 2005, and 31st October, 2005 and by the shareholders at the Extraordinary General Meeting of the Company held on 8th September, 2005 and in accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 prescribed by the Securities and Exchange Board of India.

Employees covered under the Employee stock option scheme are granted an option to purchase equity shares of the Company at the exercise price determined by the Remuneration Committee (presently re-named as “Nomination & Remuneration Committee”) on the date the option is granted. It is based on the average daily closing market price of the equity shares of the Company during the preceding 26 weeks, prior to the date of grant.

Under the said Scheme, Options granted have vesting period of one year and exercise period of maximum eight years.

The shareholders of the Company at their Extra-Ordinary General Meeting held on 25th May, 2009 had accorded approval to re-price the exercise price of the options granted in the years 2005-06 (1st series), 2006-07 (2nd series), 2007-08 (3rd series), and 2008-09 (4th series), which have not been exercised, and also to the exercise price in respect of options to be granted for the year 2008-09 (5th series), at 20% discount to the average daily closing market price of the Company’s share, on the stock exchange it is traded most, during the preceding 26 weeks prior to the date of the meeting Accordingly, the Remuneration Committee (presently re-named as “Nomination & Remuneration Committee”) on 28th May, 2009 had re-priced the exercise price of the unexercised options for the years 2005-06 (1st series), 2006-07 (2nd series), 2007-08 (3rd series) and 2008-09 (4th series) and granted stock options for the year 2008-2009 (5th series) at an exercise price of RS.45/- per equity share.

The maximum number of options granted till date stands at 5245500 and each option is equivalent to one equity share of par value of RS.1/- each of the Company.

Total Number of Options outstanding/exercisable as at 1st April, 2015 relating to 1st series is Nil. Therefore, details for the same has been excluded from above table.

The weighted average share price of options exercised during the year ended 31st March, 2017 was RS.45/- (31st March, 2016: RS.45/-) for each option.

There were no modifications to the terms of Scheme 2005 either in the current year or in the previous years other than the re-repricing as stated above.

Other information:

a) Options vested upto 31st March, 2017 : 4593000 (31st March, 2016 : 4593000 ; 1st April, 2015: 4593000)

b) Options exercised upto 31st March, 2017 : 4395000 (31st March, 2016 : 4334300 ; 1st April, 2015: 4300800)

c) Options exercised during the year ended 31st March, 2017 : 60700 (31st March, 2016 : 33500)

d) Total number of equity shares arising as a result of exercise of options as at 31st March, 2017 : 4395000 (31st March, 2016 : 4334300 ; 1st April, 2015: 4300800)

e) Options lapsed upto 31st March, 2017 : 782500 (31st March, 2016 : 753000 ; 1st April, 2015: 731500)

f) Options lapsed during the year ended 31st March, 2017 : 29500 (31st March, 2016 : 21500)

g) Money realised on exercise of options upto 31st March, 2017 : RS.2001.92 lacs (31st March, 2016 : RS.1974.60 lacs; 1st April, 2015: RS.1959.53 lacs)

h) Money realised on exercise of options during the year ended 31st March, 2017 : RS.27.32 lacs (31st March, 2016 : RS.15.07 lacs)

i) Total number of options in force as at 31st March, 2017 : 68000 (31st March, 2016 : 158200 ; 1st April, 2015: 213200) j) Details of option granted to

(i) Senior Managerial Personnel: No Options have been granted either during the year ended 31st March, 2017 or during the year ended 31st March, 2016,

(ii) Any other employee who receives a grant in any one year of Options amounting to 5% or more of Options granted during year ended 31st March, 2017 - Nil (31st March, 2016 - Nil), and

(iii) Identified employees who were granted Options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - Nil (31st March, 2016 - Nil).

3 (i) The Company is eligible to receive various government grants by way of reimbursement of cane price, production subsidy, society commission and interest subvention on certain term loans. Accordingly, the Company has recognised these government grants in the following manner:

Notes:

(a) Cane price subsidy of RS.28.60 per quintal of cane paid by the Government of Uttar Pradesh for the sugar season 2014-15.

(b) The Central Government vide its Notification No. 1(10)/2015-SP-I dated 18th September, 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 allocated quota of 115642.40 MT for export in respect of its ten sugar units. Further, the Central Government vide its Notification No. 20(43)/2015-SP - I dated 2nd December, 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 the average sugar production of the Company’s each unit in last three sugar seasons, whichever is lower.

The expenses incurred by the Company towards fulfilment of export obligation amounting to RS.13.30 lacs (31st March, 2016: RS.2,620.41 lacs) has been included under line item “Professional expenses” under Note No. 36 - “Other expenses”.

ii. During the year ended 31st March, 2016, society commission on cane for sugar season 2012-13 was reduced to RS.2.00 per quintal of cane by the state government. Accordingly, the Company had written back a sum of RS.2,752.55 lacs which has been disclosed under Note No. 30 - “Other Income”

iii. In addition to the above, the Company had received financial assistance of Rs.Nil (31st March 2016: RS.150.00 lacs) from the Hon’ble Ministry of New and Renewable Energy, Government of India. The said amount has been received under scheme to support “Promotion of Grid Interactive Biomass Power and Bagasse Cogeneration in Sugar Mills” notified through circular no. F. No. 13/10/2013 - BM. The entire proceeds of this subsidy have been utilised for prepayment of term loan taken from a bank.

iv. 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 had accounted for cane commission receivable aggregating to Rs.Nil (31st March, 2016: RS.2106.83 lacs). However, during the year ended 31st March, 2017, the Company has written off the said amount in accordance with the notification dated 28th December, 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 “Cane commission subsidy no longer receivable written off” under Note No. 36 - “Other expenses”.

* The weighted average number of shares takes into account the weighted average effect of changes in number of shares due to:

(i) buy back of shares and employee stock options during the year ended 31st March, 2017.

(ii) employee stock options during the year ended 31st March, 2016.

4. Pursuant to the approval of the Board of Directors on 15th November, 2016 and shareholders by way of Postal Ballot on 2nd January, 2017, the Company made a Public Announcement on 3rd January, 2017 for Buyback of upto 1,00,00,000 fully paid-up equity shares of face value of HI/- each from all the equity shareholders of the Company as at the Record Date, on a proportionate basis, through the Tender Offer route through Stock Exchange Mechanism, subject to compliance with the provisions of Sections 68, 69, 70 and other applicable provisions, if any, of the Companies Act, 2013 (as amended) (“the Act”), the Companies (Share Capital and Debentures) Rules, 2014 (as amended) to the extent applicable, and in compliance with Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 (as amended) (the “Buyback Regulations”), including any amendments, statutory modifications or re-enactments thereof for the time being in force, and applicable rules and regulations as specified by Reserve Bank of India (“RBI”), amongst others, at the buyback price of RS.175/- per equity share payable in cash, for an aggregate maximum amount of RS.17500.00 lacs representing 14.72% and 14.75% of the aggregate of the fully paid-up equity share capital and free reserves as per the standalone and consolidated audited accounts of the Company for the financial year ended on 31st March, 2016, (the last audited financial statements available as at the date of the meeting of Board of Directors approving the Buyback).

The Company has concluded the buy-back offer and in compliance with Regulation 12 of the Buyback Regulations has extinguished 1,00,00,000 equity shares of RS.1/- each from the paid up equity share capital on 2nd March, 2017.

This has resulted in total cash outflow of RS.17635.64 lacs including expenses relating to Buy-back aggregating to RS.135.64 lacs and accordingly RS.17400.00 lacs and RS.88.70 lacs (net of tax of RS.46.94 lacs) has been utilized from the securities premium account and retained earnings respectively pursuant to requirements of the Act. Further, capital redemption reserve of RS.100.00 lacs representing the nominal value of the equity shares bought back has been created out of the securities premium account. Consequent to such buyback, equity share capital has been reduced by RS.100.00 lacs.

5. Employee Benefits :

As per Indian Accounting Standard - 19 “ Employee Benefits” the disclosures of Employee Benefits are as follows:

Defined Contribution Plan :

Employee benefits in the form of Provident Fund, Employee State Insurance Corporation (ESIC) and Labour Welfare Fund are considered as defined contribution plan.

The contributions to the respective fund are made in accordance with the relevant statute and are recognised as expense when employees have rendered service entitling them to the contribution. The contributions to defined contribution plan, recognised as expense in the Statement of Profit and Loss are as under :

Gratuity

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the said Act, an employee who has completed five years of service is entitled to specific benefit. The Gratuity plan provides a lumpsum payment to employees at retirement, death, incapacitation or termination of employment. The level of benefits provided depends on the member’s length of service and salary at retirement age. The fund is in the form of a trust and is governed by the Board of Trustees who are responsible for the administration investment of the plan assets. The Company contributes all ascertained liabilities towards gratuity to the trust.

c) Risks related to defined benefit plans:

The main risks to which the Company is exposed in relation to operating defined benefit plans are :

i) Mortality risk: The assumptions adopted by the Company make allowances for future improvements in life expectancy. However, if life expectancy improves at a faster rate than assumed, this would result in greater payments from the plans and consequently increases in the plan’s liabilities. In order to minimise this risk, mortality assumptions are reviewed on a regular basis.

ii) Market and liquidity risks: These are the risks that the investments do not meet the expected returns over the medium to long term. This also encompasses the mismatch between assets and liabilities. In order to minimise the risks, the structure of the portfolios is reviewed and asset-liability matching analysis are performed on a regular basis.

d) Asset - liability management and funding arrangements

The trustees are responsible for determining the investment strategy of plan assets. The overall investment policy and strategy for Company’s funded defined benefit plan is guided by the objective of achieving an investment return which, together with the contribution paid is sufficient to maintain reasonable control over various funding risks of the plan.

e) Other disclosures :

i) The following are the assumptions used to determine the benefit obligation:

a) Discount rate: The yield of government bonds are considered as the discount rate. The tenure has been considered taking into account the past long term trend of employees’ average remaining service life which reflects the average estimated term of the post - employment benefit obligations.

b) Rate of escalation in salary : The estimates of rate of escalation in salary, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

c) Rate of return on plan assets: Rate of return for the year was the average yield of the portfolio in which Company’s plan assets are invested over a tenure equivalent to the entire life of the related obligation.

d) Attrition rate : Attrition rate considered is the management’s estimate based on the past long- term trend of employee turnover in the Company.

ii) The Gratuity and Provident Fund expenses have been recognised under “ Contribution to Provident and Other Funds” and Leave

Encashment under “ Salaries and Wages” under Note No. 33.

6. Segment information

a) The Managing Director has been identified as the Company’s chief operating decision-maker (CODM) as defined by Ind AS 108 -Operating Segments.

The CODM evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by Business segments.

The CODM of the Company evaluates the segments based on their revenue growth, operating income and return on capital employed.

b) The following is an analysis of revenue and results from operations by reportable segments:

Notes:

i) Inter-segment revenues are eliminated upon consolidation and reflected in the ‘adjustments and eliminations’ column. Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed at Company level. Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed at Company level. Capital expenditure consists of additions to property, plant and equipment, capital work in progress and intangible assets.

ii) Transactions between segments are primarily for materials which are transferred at cost/market determined prices. Common costs are apportioned on a reasonable basis.

iii) Figures in brackets pertain to previous year.

e) Geographical information:

The Company operated only in India during the year ended 31st March, 2017 and 31st March, 2016.

f) Information about major customers:

No single customer contributed 10% or more of the total revenue of the Company for the year ended 31st March, 2017 and 31st March, 2016.

7. Disclosure under Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Company has neither given any loan nor has advanced any amount either during the year ended 31st March, 2017 or year ended 31st March, 2016.

Hence, the requirements under the said Schedule is not applicable to the Company and no information is required to be disclosed.

8. Details of Loans and Investments covered under section 186 (4) of the Companies Act, 2013 :

Details of loans given and investments made are given in the respective note.

9. Under the New Sugar Industry Promotion Policy, 2004 of the Government of Uttar Pradesh, the Company had accounted for recoverable incentives aggregating to RS.16900.57 lacs and had availed remissions in respect of Entry Tax on Sugar, Administrative Charges on Molasses, Trade Tax on Molasses and Cane Purchase Tax. The above policy was terminated by the Government of Uttar Pradesh vide order dated 4th June, 2007.

The Company’s Writ Petition against withdrawal of the aforesaid policy which was admitted by the Lucknow Bench of the Hon’ble Allahabad High Court vide its order dated 9th May, 2008 is still pending. As an interim measure, the Order permits limited protection from remission of taxes. Therefore, the Company continues to avail remission of taxes, and accordingly, during the year, the Company has accounted for remission of taxes of RS.56.84 lacs (31st March, 2016: RS.61.43 lacs).

However, in view of the long pendency of the said writ petition, it might take years for the Hon’ble High Court to decide the case and the aggrieved party would certainly approach the Hon’ble Supreme Court and due to high pendency of cases in the Hon’ble Supreme Court, it may take consideable time for the final decision in this case. Even thereafter, the actual realization of the claims from the Government of Uttar Pradesh may not be possible without repetitive intervention of the Apex Court.

Hence, the Company had written off the recoverable incentives aggregating to RS.16900.57 lacs during the year ended 31st March, 2016. The same has been shown as “Claims receivable written off” under Note No. 37 - “Exceptional Items”.

In the assessment of Entry Tax on Sugar and Trade Tax on Molasses for the years 2008-09 to 2012-13, a sum of RS.3659.50 lacs and RS.883.59 lacs respectively aggregating to RS.4543.09 lacs has been determined by the assessing officer as the Company’s liability for four of its units namely Akbarpur, Mankapur, Kumbhi and Gularia though these units are also eligible under the aforesaid incentive scheme. However, no demand has been raised on the Company by the assessing officer in view of the limited protection from remission of taxes granted by Hon’ble High Court as aforesaid. Based on the same, the Company neither considers the aforesaid amount of RS.4543.09 lacs as a liability nor a contingent liability.

10. The Company entered into a Share Purchase Agreement (SPA) on 27th January, 2017 inter-alia with Ganesh Explosives Pvt. Ltd. (GEPL) for sale of its entire shareholding of 53.96% in Indo Gulf Industries Ltd. (IGIL) consisting of 51,62,470 equity shares of HI/- each subject to compliance and completion of the formalities under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“SEBI (SAST) Regulations, 2011”) and the conditions precedent in terms of the SPA.

Pursuant to the completion of the Open Offer formalities by the acquirer (GEPL), IGIL has ceased to be the Subsidiary of the Company w.e.f. 19th May, 2017.

11. Exercise of Call Option

A Call Option Agreement dated 30th March, 2015 was entered by the Company with Talma Chemical Industries Pvt. Ltd. (Talma), a company having 100% interest in the Equity share capital of Visual Percept Solar Projects Pvt. Ltd. (VPSPPL - a non-listed private limited company based in India and engaged in the generation and sale of solar power) to acquire at a future date, 89,14,500 Equity shares of RS.10/- each fully paid up at a price of RS.25/- each.

On 24th January, 2017, the Company has exercised the said Call Option and acquired 89,14,500 Equity shares of VPSPPL at RS.25/- per Equity share of RS.10/- each fully paid up, constituting 45% of the voting rights of VPSSPL pursuant to which, VPSPPL became an Associate of the Company.

12. Under Section 139 of the Companies Act, 2013 and the rules made thereunder, it is mandatory for the Company to rotate the existing statutory auditors on completion of the maximum term permitted under the said Section. The Audit Committee of the Board at its meeting held on 27th May, 2017 proposed and the Board of Directors of the Company have recommended the appointment of M/s Lodha & Co., Chartered Accountants (Firm Registration No. 301051E), as the statutory auditors of the Company. M/s. Lodha & Co. will hold office for a period of 5 consecutive years from the conclusion of the 41st Annual General Meeting of the Company scheduled to be held in the year 2017 till the conclusion of the 46th Annual General Meeting of the Company, subject to approval of the shareholders of the Company. The first year of audit will be of the financial statements for the year ending on 31st March, 2018 which will include limited review of the quarterly financial statements for the year, excluding for period ending 30th June, 2017 of which limited review would be carried out by the existing auditors.

13. Hedging activities and derivatives (Derivatives not designated as hedging instruments)

The Company had an External Commercial Borrowing (ECB) from International Finance Corporation, Washington (IFC) outstanding as at the transition date, at floating interest rate linked with LIBOR. In order to hedge the fair value risk associated with principal and interest payment on the floating rate, the Company at the inception of the loan concurrently entered into cross currency interest rate swap contract with a bank (receive floating, pay fixed, which had the same terms and payment dates as the debt). These derivative contracts are not designated in hedge relationship and are measured at fair value through profit or loss.

The Company has also taken foreign currency denominated borrowings (viz. FCNR-B loan) to reduce finance costs. The Company uses foreign exchange forward contracts with the intention of reducing the foreign exchange risk of such loans and interest payable thereon. These foreign exchange forward contracts are also not designated in hedge relationship and are measured at fair value through profit or loss.

14. Financial instruments - Accounting, Classification and Fair value measurements

A. Financial instruments by category

B. Fair value hierarchy

The fair value of the financial assets and financial liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

i) Fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, trade and other receivables, loans and other current financial assets, short term borrowings from banks and financial institutions, trade and other payables and other current financial liabilities approximate their carrying amounts due to the short-term maturities of these instruments.

ii) The carrying value of debentures approximate their fair value as the instruments are at prevailing market rate.

The Company uses the following fair value hierarchy for determining and disclosing the fair value of financial instruments:

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

Level 2: Inputs other than 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).

The following tables provide the fair value hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis:

15. Financial risk management objectives and policies

The Company’s principal financial liabilities includes Borrowings, Trade payable and Other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include Trade receivables, Cash and cash equivalents and Other financial assets that derive directly from its operations.

The Company is exposed to credit risk, liquidity risk and market risk. The Company’s senior management oversees the management of these risks and the appropriate financial risk governance framework for the Company. The senior management provides assurance that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

It is the Company’s policy that derivatives are used exclusively for hedging purposes and not for trading or speculative purposes.

The Board of Directors reviewed policies for managing each of these risks, which are summarized below :

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other risks, such as regulatory risk and commodity price risk.

(i) Interest rate risk

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 Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings obligations with floating interest rates.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s foreign currency denominated borrowings. This foreign currency risk is covered by using foreign exchange forward contracts and currency swap contracts.

Foreign currency sensitivity

1% increase or decrease in foreign exchange rates will have no material impact on Profit.

(iii) Regulatory risk

Sugar industry is regulated both by central government as well as state government. Central and state governments policies and regulations affects the Sugar industry and the Company’s operations and profitability. Distillery business is also dependent on the Government policy.

However, with the removal of major regulatory control on sugar sales by the Central Government, the regulatory risk are moderated.

(iv) Commodity price risk

Sugar industry being cyclical in nature, realisations get adversly affected during downturn. Higher cane price or higher production than the demand ultimately affect profitability. The Company has mitigated this risk by well integrated business model by diversifying into co-generation and distillation, thereby utilizing the by-products.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company’s sugar sales are mostly on cash. Power and ethanol are sold to state government entities, thereby the credit default risk is significantly mitigated.

The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each balance sheet date.

Financial assets are written off when there is no reasonable expectation of recovery, however, the Company continues to attempt to recover the receivables. Where recoveries are made, these are recognised in the Statement of Profit and Loss.

(i) Trade receivables

Trade receivables are non-interest bearing and are generally on credit terms of 3 to 60 days.

An impairment analysis is performed at each balance sheet date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the balance sheet date is the carrying value of each class of financial assets disclosed under Note No. 7.

(iii) Balances with banks

Credit risk from balances with banks is managed in accordance with the Company’s policy.

The Company’s maximum exposure to credit risk for the components of the balance sheet as at 31st March, 2017, 31st March, 2016 and 1st April, 2015 is the carrying amounts as stated under Note No. 13 and 14.

(c) Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credit facilities, short term loans and commercial papers.

(d) Lien

The fair values of the fixed deposits under lien aggregated to RS.300.00 lacs as at 1st April, 2015 which was placed with bank as security for exposure under derivative contract. No fixed deposits were under lien as at 31st March, 2017 and 31st March, 2016.

16. Capital Management

(a) Risk management

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company. The Company’s objective when managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide returns to shareholders and other stake holders.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders (buy back its shares) or issue new shares.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2017 and 31st March, 2016.

17. Explanation of transition to Ind AS

These financial statements, for the year ended 31st March, 2017, 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 31st March, 2017, together with the comparative figures for the year ended 31st March, 2016, as described in the summary of significant accounting policies [Refer Note No.2].

In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1st April, 2015, 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 1st April, 2015 and the financial statements for the year ended 31st March, 2016.

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:

(a) As per Ind AS 101, at the date of transition, an entity may elect not to restate business combinations that occurred before the transition date. If the entity restates any business combinations that occurred before the date of transition, then it restates all later business combinations, and also applies Ind AS 110 Consolidated financial statements from that same date.

The Company has, however, elected to apply Ind AS 103 requirements prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated. Therefore, use of this exemption requires that the previous GAAP carrying amounts of assets and liabilities, that are required to be recognized under Ind-AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with Ind-AS. Assets and liabilities that do not qualify for recognition under Ind-AS are excluded from the opening Ind-AS balance sheet.

(b) 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. 1st April, 2015. Under the previous GAAP, Property, plant and equipment were stated at their original cost (net of accumulated depreciation, amortization and impairment), if any, adjusted by revaluation of certain assets.

(c) The Company has elected to continue with the carrying value of Capital work in progress as recognized under the previous GAAP as deemed cost as at the transition date.

(d) The Company has elected to continue with the carrying value for intangible assets (computer softwares) as recognized under the previous GAAP as deemed cost as at the transition date. Under the previous GAAP, Computer Software was stated at its original cost, net of accumulated amortization.

(e) A first time adopter is encouraged, but not required, to apply Ind AS 102 - Share based payment to equity instruments that vested before the date of transition to Ind AS. The Company has granted equity settled stock options and has followed intrinsic value method of accounting. The Company has decided to apply Ind AS 102 prospectively.

(f) 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 arrangements for embedded leases based on conditions in place as at the date of transition.

(g) The Company has elected to apply previous GAAP carrying amount of its investment in its subsidiary as deemed cost as at the date of transition.

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 in other comprehensive income. Ind AS 101 allows such designation of previously recognized financial assets, as ‘FVTOCI’ 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 certain equity instruments 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.

However, since, the fair valuation has been done based on level 3 inputs, difference in fair value and cost as on the date of transition has been deferred and has been considered and shown as “Deferred gain on changes in fair value of financial assets” under Other NonCurrent Liabilities.

(h) The estimates as at 1st April, 2015 and as at 31st March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies).

(i) The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its foreign currency risks and interest rate risks respectively.

Under the previous GAAP, there is no mandatory standard that deals with hedge accounting, which has resulted in the adoption of varying practices. The Company has not applied for hedge accounting on or after the transition date.

(j) 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.

(k) The Company has applied the requirements in Ind AS 109 and Ind AS 20 prospectively to government loans existing as at the date of transition to Ind AS.

(d) Footnotes to the reconciliation of equity as at 1st April, 2015 and 31st March, 2016 and Statement of Profit and Loss for the year ended 31st March, 2016 :

A) Property, plant and equipment

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

b) Investments

(i) Investments in equity instruments

Under the previous GAAP, investment in equity instruments were classified as long term investments or current investment based on the intended holding period and realisability. The Company accounted for long term investments in equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments, if any.

Under Ind AS, the Company has the option to designate such investments either as FVTOCI or FVTPL investments. Further, in case of a subsidiary, 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.

As per the aforesaid alternatives, the Company has designated investment in the subsidiary (quoted investment) at deemed cost i.e. the previous GAAP carrying amount as at the date of transition.

In case of other long term investments in unquoted equity shares, the Company has designated investments as FVTOCI investments as at the date of transition. Ind AS requires FVTOCI investments to be measured at fair value. However, since, the fair valuation has been done based on level 3 inputs, difference in fair value of investments as per Ind AS and carrying value of investments as per previous GAAP aggregating to RS.26.72 lacs as at the date of transition and subsequent changes of RS.1.65 lacs for the year ended 31st March, 2016 has been deferred and has been shown as “Deferred gain on changes in fair value of financial assets” under Other Non Current Liabilities.

(ii) Investments in debt instruments

The Company has invested RS.4050.00 lacs in debentures of Visual Percept Solar Projects Pvt. Ltd. (VPSPPL) redeemable after 12 years from the date of allotment. As per terms, interest is receivable @ 5% for first 6 years and there after @14% for next 6 years.

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.

As investment in debentures are held by the Company within a business model whose objective is to hold assets for collecting contractual cash flows, and contractual term of the debentures give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, the Company has designated them at amortized cost.

The carrying amount of the debentures as per Ind AS is RS.4538.93 lacs as at transition date as against RS.4050.00 lacs under the previous GAAP and the difference of RS.488.93 lacs has been credited to retained earnings, net of tax and subsequent changes for the year ended 31st March, 2016 aggregating to RS.181.08 lacs has been credited to Statement of Profit and and Loss and has been shown under Other Income.

C) Biological assets

Under the previous GAAP, there was no standard dealing with biological assets. Ind AS requires biological assets and agricultural produce within its scope to be measured at fair value less cost to sell at each balance sheet date and to be presented as separate line item on the face of the balance sheet with corresponding gain or loss to be recognized in Statement of Profit and Loss.

D) Option Agreement

A Call Option Agreement dated 30th March, 2015 was entered by the Company with Talma Chemical Industries Private Limited (Talma), a company having 100% interest in the equity share capital of Visual Percept Solar Projects Pvt. Ltd. (VPSPPL) to acquire at a future date, 89,14,500 equity shares of RS.10/- each fully paid at a mutually agreed price of RS.25/- per equity share of RS.10/- each of VPSPPL.

Under the previous GAAP, call options were considered as off balance sheet items. Accordingly, no treatment was given in the financial statements for the year ended 31st March, 2015 and 31st March, 2016. Under Ind AS, such call options are required to be measured at FVTPL.

The Company has measured options at FVTPL. The difference between fair value of equity shares and present value of exercise price as at the date of transition aggregating to RS.599.95 lacs and for the year ended 31st March 2016 aggregating to RS.106.97 lacs has been considered as a financial asset.

However, since, the fair valuation has been done based on level 3 inputs, the gain on fair valuation has been deferred and has been shown as “Deferred gain on changes in fair value of financial assets” under Other Non-Current Liabilities.

E) Capital Reserve

Certain government grant were received by the Company in past years as grant in the nature of promoter’s contribution and recognized under Capital reserve as required under the previous GAAP.

Ind AS does not permit recognition of government grant in the nature of promoter contribution to capital reserve.

Under Ind AS, such government grants are required to be treated as an asset related grant and to be presented in the balance sheet by setting up the grant as deferred income. The grant set up as deferred income is to be recognized in the Statement of Profit and Loss on a systematic basis over the useful life of the related asset. Accordingly, to comply with Ind AS 20 the Company has reclassified an appropriate amount (i.e. unamortized portion of grant) from capital reserve to the deferred income on account of government grant aggregating to RS.17.44 lacs and the differential impact aggregating to RS.63.21 lacs has been transferred from capital reserve to retained earnings as at the transition date.

F) Borrowings

Ind AS requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in 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 was incurred.

Accordingly, borrowings as at the transition date have been reduced by RS.64.32 lacs with a corresponding adjustment to retained earnings, net of tax.

G) Interest rate swaps and foreign exchange forward contracts

The Company had an ECB from IFC Washington outstanding as at the transition date, at floating interest rate linked with LIBOR. In order to hedge the fair value risk associated with interest payment on the floating rate, the Company at the inception of the loan concurrently entered into an interest rate swap with a bank (receive floating, pay fixed, which had the same terms and payment dates as the debt).

The Company entered into foreign exchange contracts with the intention of reducing the foreign exchange risk of FCNR - B loan and interest payable on such loan.

Under the previous GAAP, in case of monetary assets and liabilities which are covered by foreign exchange forward contracts, the difference between the year-end rate and the rate on the date the contract was entered into was recognised as exchange difference and the premium on foreign exchange forward contracts was recognized over the period of the respective contract.

Under Ind AS, the Company has the alternative to account for above stated derivatives as prescribed under hedge accounting. However, the Company has not designated the hedge relationships, but has, designated such interest rate swap and foreign exchange forward contracts at FVTPL and differential impact of carrying value as on the date of transition as per Ind AS and carrying value as per previous GAAP as at 31st March 2015 has been taken to Retained earnings (net of tax) and for the year ended 31st March, 2016 in profit or loss.

The Company has not applied hedge accounting for the above derivative instruments considering that the said instruments were repayable in full within six months from the date of transition to Ind AS.

H) Provision for mark to market loss on derivatives

Under the previous GAAP, provision for mark to market losses on firm commitments was accounted for based on prudence. However, under Ind AS, firm commitments needs to be accounted for based on Ind AS 109. Hence, provision created for mark to market losses on firm commitment under the previous GAAP has been de-recognized and accounted for separately as financial liability aggregating to RS.3.88 lacs under Ind AS with the corresponding impact given to Retained earnings (net of tax).

I) Current tax

Current tax liabilities have been accounted for on account of various transitional adjustments as stated above as at the date of transition with corresponding impact either to Retained earnings or Other Comprehensive Income in correlation to the underlying transaction.

Thus, current tax liabilities has increased by RS.105.33 lacs as at the date of transition and has further increased by RS.54.75 lacs with respect to profit or loss and decreased by RS.10.23 lacs on account of OCI for the year ended 31st March, 2016.

J) Deferred tax

Previous GAAP required deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the year. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which were not required under the previous GAAP. Moreover, carry forward of unused tax credits are to be treated as deferred tax assets which was earlier considered as Other non-current non-financial assets.

In addition, the various transitional adjustments lead to temporary differences and consequently deferred tax adjustments have been recognized in correlation to the underlying transaction in retained earnings.

The net impact on deferred tax liabilities has increased by RS.170.80 lacs and RS.124.10 lacs as at the date of transition and for the year ended on 31st March 2016 respectively.

K) Defined benefit liabilities

As under the previous GAAP, under Ind AS also, the Company continues to recognize costs related to its post-employment defined benefit plan on an actuarial basis. The entire cost, including actuarial gains and losses, was charged to the Statement of Profit and Loss.

Under Ind AS, re-measurements of defined benefit plan are recognized in the Balance Sheet with a corresponding debit or credit to equity through Other Comprehensive Income (OCI). Thus, the employee benefit cost is reduced by RS.47.92 lacs and re-measurement losses on defined benefit plans has been recognized in the OCI, net of tax as at the transition date.

Under Ind AS, an entity is permitted to transfer amounts recognized in Other Comprehensive Income within equity. The Company has taken recourse of the said provision and has transferred as at the date of transition to Ind AS, all re-measurement costs relating to prior period to the transition date to Retained earnings.

L) Revenue from sale of goods

(i) Excise duty

Under the previous GAAP, revenue from sale of goods was presented as net of excise duty on sales. However, under Ind AS, revenue from sale of goods includes excise duty and such excise duty is separately presented as an expense on the face of the Statement of Profit and Loss. Thus, under Ind AS, sale of goods for the year ended 31st March, 2016 has increased by RS.11740.75 lacs with a corresponding increase in “Total expense”

(ii) Cash


Mar 31, 2016

Notes:

i) General reserve is primarily created to comply with the requirements of section 123(1) of the Companies Act, 2013. This is a

free reserve and can be utilized for any general purpose like issue of bonus shares, payment of dividend, buy back of shares etc.

ii) The storage fund for molasses has been created to meet the cost of construction and repair 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 Rs,136.93 lacs (Previous year Rs,114.28 lacs).

a) Nature of securities:

i) Rupee Term Loan from SBI amounting to Rs,17500.00 lacs under Scheme for Extending Financial Assistance to Sugar Undertakings,

2014, is secured by pari passu first charge, by way of hypothecation of all the movable fixed assets and pari passu first charge

on immovable properties, both present and future, pertaining to all the sugar units of the Company except Khalilabad sugar unit.

ii) Rupee Term Loan from SBI amounting to Rs,13638.00 lacs under the Soft Loan Scheme extended by Central Government, is secured by

pari passu first charge on all the movable and immovable fixed assets of ten sugar units of the Company viz; Balrampur, Babhnan,

Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur.

iii) Rupee/FCNR-B Term Loan from SBI amounting to Rs,12636.95 lacs is secured by first charge, by way of hypothecation of movable

fixed assets, both present and future, pertaining to Company’s sugar and cogeneration units at Balrampur, Akbarpur and Mankapur

and is further secured by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and

other current assets including book debts, both present and future, of all the sugar units of the Company. The hypothecation

charge on the stocks as mentioned above ranks pari passu with PNB and HDFC for their Working capital loans.

iv) Rupee Term Loan from PNB amounting to Rs,4921.38 lacs, under Scheme for Extending Financial Assistance to Sugar Undertakings,

2014, is secured by residual charge, by way of hypothecation of all the movable fixed assets, both present and future, pertaining

to all the sugar units of the Company.

v) Rupee Term Loan from PNB amounting to Rs,3250.00 lacs is secured by pari passu first charge, by way of hypothecation on the

fixed assets of Mankapur distillery unit of the Company.

vi) Rupee Term Loan from PNB amounting to Rs,3116.00 lacs under the Soft Loan Scheme extended by Central Government, is secured by

pari passu first charge on all the movable and immovable fixed assets of ten sugar units of the Company viz; Balrampur, Babhnan,

Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur.

vii) Rupee Term Loan from HDFC amounting to Rs,2900.00 lacs is secured by pari passu first charge, by way of hypothecation of the

movable fixed assets of Balrampur distillery unit of the Company.

viii) Rupee Term Loan from HDFC amounting to Rs,3600.00 lacs is secured by first charge, by way of hypothecation of movable fixed

assets, both present and future, pertaining to Company’s distillery unit at Babhnan and by pari passu first charge, by way of

movable fixed assets, both present and future, pertaning to Company’s distillery unit at Mankapur.

ix) Rupee Term Loan from HDFC amounting to Rs,3150.00 lacs under the Soft Loan Scheme extended by Central Government, is secured by

pari passu first charge on all the movable and immovable fixed assets of ten sugar units of the Company viz; Balrampur, Babhnan,

Tulsipur, Haidergarh, Akbarpur, Mankapur, Rauzagaon, Kumbhi, Gularia and Maizapur.

x) Rupee Term Loans from SDF are secured by an exclusive second charge by way of equitable mortgage on immovable properties and

hypothecation of movable properties (excluding current assets and book debts), both present and future, of the respective sugar

and cogeneration units viz Kumbhi, Gularia and Rauzagaon. Rupee Term Loan from SDF amounting to Rs,1800.00 lacs was secured by

first charge by way of equitable mortgage on immovable properties and hypothecation of movable properties (excluding current

assets and book debts), both present and future. The said amount has been fully repaid during the year.

xi) ECB from International Finance Corporation, Washington (IFC) was secured by way of first equitable mortgage on immovable

properties and hypothecation of movable properties and residual charge on current assets, both present and future, pertaining to

Company’s sugar and cogeneration units at Haidergarh and Rauzagaon. As the amount outstanding as at 31st March, 2015 was payable

entirely within one year, the same was included in the line item “Current maturities of long-term debt” under the head “Other

current liabilities” as at 31st March, 2015.

xii) Release of securities in respect of certain term loans fully repaid by the Company is in progress.

Figures in brackets pertain to previous year.

* Bank rate as prevailing on the date of disbursement.

# Bank rate as applicable from time to time.

*/ Entitled for interest subvention from Sugar Development Fund up to 12.00% p.a.

## Interest subvention from Government for the 1st year limited to 10.00%.

** For the 1st year, applicable interest rate is 10.10% p.a. fixed.

During the year, part of the Rupee Term Loan from SBI was converted into FCNR-B (Term Loan) carrying interest rate of USD 6M

Libor

3.00%. The repayment terms as applicable to Rupee Term Loan are applicable to said FCNR-B (Term Loan).

Rs,1458.40 lacs each.

~ Except last two installments of Rs,852.90 lacs.

^ Except first installment of Rs,2636.95 lacs

Nature of securities:

a) Working capital loans from SBI are secured / to be secured : i) by way of hypothecation of entire stock of sugar, sugar in

process, mill stores, bagasse, molasses and other current assets including book debts, both present and future, of all the sugar

units of the Company on pari passu basis with PNB and HDFC.

ii) by way of exclusive hypothecation of entire current assets of all the Cogeneration units of the Company.

iii) by way of second charge on immovable and movable properties (excluding current assets and book debts), both present and

future, of Maizapur Sugar Unit of the Company on pari passu basis with PNB and HDFC.

iv) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and

future, of all the sugar units of the Company, except Maizapur Sugar Unit. The said charge ranks pari passu with PNB and HDFC

except for Khalilabad Sugar Unit on which SBI has exclusive charge.

b) Working capital loans from PNB are secured / to be secured :

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets

including book debts, both present and future, of all the sugar units of the Company on pari passu basis with SBI and HDFC.

ii) by way of second charge on immovable and movable properties (excluding current assets and book debts), both present and

future, of Maizapur Sugar Unit of the Company on pari passu basis with SBI and HDFC.

iii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and

future, of all the sugar units of the Company, except Maizapur Sugar Unit. The said charge ranks pari passu with SBI and HDFC

except for Khalilabad Sugar Unit on which SBI has exclusive charge.

c) Working capital loans from HDFC are secured / to be secured:

i) by way of hypothecation of entire stock of sugar, sugar in process, mill stores, bagasse, molasses and other current assets

including book debts, both present and future, of all the sugar units of the Company on pari passu basis with SBI and PNB.

ii) by way of second charge on immovable and movable properties (excluding current assets and book debts), both present and

future, of Maizapur sugar unit of the Company on pari passu basis with SBI and PNB.

iii) by way of third charge on immovable and movable properties (excluding current assets and book debts), both present and

future, of all the sugar units of the Company, except Maizapur Sugar Unit. The said charge ranks pari passu with SBI and PNB

except for Khalilabad Sugar Unit on which SBI has exclusive charge.

Notes : 1) Land, Building, Plant & Machinery, Tubewell and Water supply machinery of Balrampur unit were revalued as at 30th

June, 1988 on net replacement value as per the report of S. R. Batliboi Consultants Pvt. Ltd. and the cost of respective asset

aggregating to Rs,1200.77 lacs was substituted by the revalued amount of Rs,1920.52 lacs and the resultant increase was credited to

Revaluation reserve.

2) Land, Building and Plant & Machinery of Tulsipur unit were revalued as at 31st March, 1999 on net replacement value as per the

report of Lodha & Co. and the cost of the respective asset aggregating to Rs,1023.85 lacs was substituted by the revalued amount of

Rs,2944.93 lacs and the resultant increase was credited to Revaluation reserve in the books of erstwhile Tulsipur Sugar Company

Ltd.

^ Unsecured non-convertible debentures carrying overall simple yield to maturity of 9.50% p.a. The coupon amount is payable

annually

@ 5% p.a. for the first six years and 14% p.a. for the next six years. The debentures are redeemable at par at the end of twelve

years from the date of allotment.

* Shares are suspended for Trading by the Stock Exchange.

@ Rs,1/- shown as Nil due to rounding off.

The amounts shown in (i) above represent the best possible estimates arrived at on the basis of available information. The

uncertainties and timing of the cash flows are dependent on the outcome of the 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 grounds that there

are fair chances of successful outcome of appeals

1. The Employee Stock Option Scheme (Scheme 2005) of the Company was formulated in the year 2005 and under the said Scheme,

Options granted have vesting period of one year and exercise period of maximum eight years. The maximum number of options

granted till date stand at 5245500 and each option is equivalent to one equity share of par value of Rs,1/- each of the Company.

In the year ended 30th September, 2009, Options covered by 1st, 2nd, 3rd and 4th Series which remained outstanding were re-priced

and the revised Exercise Price of Rs,45/- was approved by the Shareholders of the Company in the Extra-Ordinary General Meeting

held on 25th May, 2009.

The Company uses intrinsic value method to account for the employee stock options granted to employees.

Provisions for contingencies as referred to above represent provision towards various claims made/anticipated against the Company

based on the Management’s assessment.

It is not possible to estimate the timing/uncertainties relating to utilization /reversal from the provision for contingencies.

Future cash outflow in respect of the above is determinable only upon Court decision/out of Court settlement/disposal of appeals.

The Company does not expect any reimbursement in respect of above provisions.

2. Sugarcane Price Accounting

State Government of Uttar Pradesh vide its Press Release dated 18th January, 2016 announced certain financial assistances

including Rs,23.30 per quintal of cane for the sugar season 2015-16 linked to average selling price and recovery percentage of

sugar and its byproducts during the specified period which is to be recommended by the Committee constituted by the Government of

Uttar Pradesh.

However, in view of the prevalent sugar prices, the Company has not accounted for the said sugarcane subsidy of Rs,23.30 per

quintal of cane for the sugar season 2015-16.

The Cane Subsidy of Rs,28.60 per quintal of cane paid by the Government of Uttar Pradesh for the sugar season 2014-15 aggregating

to Rs,1238.75 lacs (Previous year Rs,20875.45 lacs ) has been accounted for by the Company and has been included under line item

“Sugar cane” under Note No. 23 - “Cost of material consumed”.

3. Export and Production Subsidy:

The Central Government vide its Notification No. 1(10)/2015-SP-I dated 18th September, 2015 announced Minimum Indicative Export

Quota (MIEQ) under traceable export scrip scheme in order to export surplus sugar inventory out of the country. Under the said

scheme, the Company was allocated quota of 115642.40 MT for export of sugar in respect of its ten sugar units. Further, the

Central Government vide its Notification No. 20(43)/2015-SP - I dated 2nd December, 2015 has 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

the average sugar production of the Company’s each unit in last three sugar seasons, whichever is lower.

As the Company has substantially complied with the eligibility criteria, the aforesaid subsidy @ Rs,4.50 per quintal of cane

crushed amounting to Rs,3113.15 lacs has been accounted for during the year and adjusted with line item “Sugar cane” under Note No.

23 - “Cost of material consumed”.

Further, the expenses incurred by the Company till 31st March, 2016 towards fulfillment of export obligation amounting to Rs,2620.41

lacs has been included under line item “Professional expenses” under Note No. 28 - “Other expenses”.

In addition to the above, the Company has received financial assistance of Rs,150.00 lacs (Previous year: Nil) from the Hon’ble

Ministry of New and Renewable Energy during the year. The said amount has been received under Scheme to Support “Promotion of

Grid Interactive Biomass Power and Bagasse Cogeneration in Sugar Mills” notified through circular no. F. No. 13/10/2013 – BM. The

entire proceeds would be utilized for prepayment of term loan taken from bank. The said financial assistance has been credited to

Capital Reserve.

During the year, society commission on cane for sugar season 2012-13 was reduced to Rs,2.00 per quintal of cane by the State

Government. Accordingly, the Company has written back a sum of Rs,2752.55 lacs which was accounted for in the books of account in

the relevant years.

The said write back of liability has been disclosed under Note No. 22 - “Other Income”.

4. Depreciation for the previous year was aligned to meet the requirements of Schedule -II to the Companies Act, 2013 and

accordingly an amount of Rs,3180.01 lacs (net of deferred tax benefit of Rs,1682.99 lacs) in relation to the assets whose useful life

has already exhausted was adjusted with Retained Earnings

5. Employee Benefits :

As per Accounting Standard - 15 “ Employee Benefits”, the disclosures of Employee Benefits as defined in the Accounting Standard

are as follows:

Defined Contribution Plan : Employee benefits in the form of Provident Fund, Employee State Insurance and Labour Welfare Fund are

considered as defined contribution plan. However, up to 31st March, 2015, Provident fund in respect of certain employees was

contributed to a fund set up by the Company which was treated as a defined benefit plan since the Company had to meet the

interest shortfall.

Defined Benefit Plan:

On Company’s request, in exercise of the powers conferred under section 17(4) of the Employees’ Provident Fund & Miscellaneous

Provisions Act, 1952, the Hon’ble Ministry of Labour and Employment, Government of India, has cancelled the exemption granted to

the Company with effect from 1st April, 2014 vide its order dated 29th April, 2015. Accordingly, Employees Provident Fund set up

by the Company ceases to exist. After cancellation, contribution to the provident fund of the related employees is being

deposited with Government Provident Fund w.e.f 1st April, 2015.

Long-term employee benefits in the form of gratuity and leave encashment are considered as defined benefit obligation. The

present value of the obligation is determined based on actuarial valuation using projected unit credit method as at the Balance

Sheet date. The amount of defined benefits recognized in the Balance Sheet represent the present value of the obligation as

adjusted for unrecognized past service

VIII. Basis used to determine the expected Rate of return on Plan Assets : The basis used to determine overall expected Rate of

return on Plan Assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect

the Capital and optimize returns within acceptable risk parameters, the Plan Assets are well diversified

c) Other disclosures :

i) Basis of estimates of Rate of escalation in salary :

The estimates of rate of escalation in salary, considered in actuarial valuation, take into account inflation, seniority,

promotion and other relevant factors including supply and demand in the employment market. The above information is certified by

the actuary.

ii) The Gratuity and Provident Fund Expenses have been recognized under “Contribution to Provident and Other Funds” and Leave

Encashment under “Salaries and Wages” under Note No.25 - “Employee benefits expense”.

6. Segment information as per Accounting Standard - 17 on ‘Segment Reporting’ :

The Company has identified three primary business segments viz. Sugar, Distillery and Co-generation. Segments have been

identified and reported taking into account the nature of the products, the differing risks and returns, the organizational

structure and internal business reporting system.

a) 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 “Unallowable”.

i) Transactions between segments are primarily for materials which are transferred at cost/market determined prices. Common costs

are apportioned on a reasonable basis.

ii) Unallowable expenses are net of unallowable income Rs,912.09 lacs (Previous year Rs,509.31 lacs).

iii) Inter segment sale is net of excise duty Rs,1146.24 lacs (Previous year Rs,1129.13 lacs).

iv) Figures in brackets pertain to previous year.

d) Information about Secondary Geographical Segments : There is no secondary segment.

7. Related party disclosures as per Accounting Standard - 18 are given below :

a) Name of the related parties and description of relationship :

i) Subsidiary (Control exists): Indo Gulf Industries Ltd.

ii) Key Managerial Personnel (KMP): 1. Shri Vivek Saraogi - Managing Director

2. Smt. Meenakshi Saraogi - Joint Managing Director (up to 31.05.2015)

3. Shri Kishor Shah - Director cum Chief Financial Officer (up to 30.11.2015)

4. Dr. Arvind Krishna Saxena - Whole-time Director

iii) Relatives of Key Managerial Personnel :

Shri Vivek Saraogi Smt. Meenakshi Saraogi (Mother)

Smt. Meenakshi Saraogi Shri Vivek Saraogi (Son)

iv) Enterprises over which KMP and their

1. Balrampur Institute of Vocational Aid relatives have substantial interest /

2. Balrampur Foundation significant influence:

3. Balrampur Trust Notes forming part of the financial statements Other information

@ Excluding gratuity payment amounting to Rs,245.19 lacs pursuant to settlement during the year which has been reimbursed by The

Balrampur Sugar Co. Ltd. Employees Gratuity Fund.

* Excluding gratuity payment amounting to Rs,50.77 lacs pursuant to settlement during the year which has been reimbursed by The

Balrampur Sugar Co. Ltd. Employees Gratuity Fund.

# Excluding monetary value of perquisites.

c) The transactions with related parties have been entered at an amount which are not materially different from those on normal

commercial terms.

d) No amount has been written back/written off in respect of due to/ from related parties other than stated above under Note No.

14(b)

(v) and (vi). e) Figures in brackets pertain to previous year.

a) Loan to Subsidiary fall under the category of “Loans and Advances in the nature of Loans where there is no repayment schedule”

and was re-payable on demand.

b) The above loan was interest bearing. However, interest was not accounted for in the previous year as the loan (including

interest accrued thereon) was considered doubtful of realization and was written off during the previous year.

c) No investment is/was made by the loaned company in the shares of the Company.

8. Based on the review made at the Balance Sheet date, MAT credit of Rs,5642.00 lacs (previous year: Rs,5642.00 lacs) recognized in

earlier years is carried forward as the Management is confident that there will be sufficient taxable profit during the specified

period to utilize the same.

18. Under the New Sugar Industry Promotion Policy, 2004 of the Government of Uttar Pradesh, the Company had accounted for

recoverable incentives aggregating to Rs,16900.57 lacs and had availed remissions in respect of Entry Tax on Sugar, Administrative

Charges on Molasses, Trade Tax on Molasses and Cane Purchase Tax. The above policy was terminated by the Government of Uttar

Pradesh vide order dated 4th June, 2007.

The Company’s Writ Petition against withdrawal of the aforesaid policy which has been admitted by the Luck now Bench of the

Hon’ble Allahabad High Court vide its order dated 9th May, 2008 is still pending. As an interim measure, the Order permits

limited protection from remission of taxes. Therefore, the Company continues to account for only remission of taxes, and

accordingly, during the year, the Company has accounted for remission of taxes of Rs,61.43 lacs (Previous year Rs,56.58 lacs).

However, in view of the long pendency of the said writ petition, it might take years for the Hon’ble High Court to decide the

case and the aggrieved party would certainly approach the Hon’ble Supreme Court and due to high pendency in the Hon’ble Supreme

Court, it may take considerable time for the final decision in these cases. Even thereafter, the actual realization of the claims

from the State may not be possible without repetitive intervention of the Apex Court.

Hence, the Company has written off the recoverable incentives aggregating to Rs,16900.57 lacs (Previous year nil) during the year.

The same has been shown as “Claims receivable written off” under

Note No. 9 - “Exceptional Items”.

In the assessment of Entry Tax on Sugar and Trade Tax on Molasses for the years 2008-09 to 2012-13, a sum of Rs,3659.50 lacs and

Rs,883.59 lacs respectively aggregating to Rs,4543.09 lacs has been determined by the assessing officer as the Company’s liability

for four of its units namely Akbarpur, Mankapur, Kumbhi and Gularia though these units are also eligible under the aforesaid

incentive scheme.

However, no demand has been raised on the Company by the assessing officer in view of limited protection from remission of taxes

granted by Hon’ble High Court as aforesaid. Based on the same, the Company neither considers the aforesaid amount of Rs,4543.09

lacs as a liability nor a contingent liability.

10. In view of inadequacy of profits, the Remuneration paid during the year and during the previous year to the Managing Director

and Joint Managing Director is/was the minimum remuneration in accordance with terms and conditions approved by the shareholders.

Necessary approval has been obtained from the Central Government in this regard.

11. Khalilabad Sugar unit, a unit of Company was incurring losses for the last several years and getting low recovery. Further,

the Sugar Mill was old and expenses on wear and tear were abnormally high.

Since, even the most efficient and integrated plants were incurring losses, it was impossible for the said Sugar unit to survive

in long term. Therefore, the Board of Directors of the Company in its meeting held on 27th May, 2015 discussed and decided to

close the said sugar unit of the Company.

As a result of closure of the said unit, the Company announced voluntary retirement scheme (VRS scheme) for the employees of the

said unit pursuant to which, the Company has paid compensation of Rs,409.84 lacs (Previous year: nil) to those who availed the said

VRS scheme.

12. The Hon’ble Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 7th January, 2014 had permitted

transfer of 20% equity shares of Indo Gulf Industries Ltd. (IGIL) held by the Company as well as induction of co-promoter

/strategic investor in IGIL, under a Modified Draft Rehabilitation Scheme (MDRS) to be approved by the Hon’ble BIFR. However, the

Hon’ble BIFR vide its order dated 4th August, 2014, reviewed its directions and directed the Operating Agency to submit its

report after conducting due-diligence of co-promoter/strategic investor and reserved its order for pronouncement.

The order in the subject matter was pronounced on 23rd January, 2015, whereby the concerned Bench observed that induction of

co-promoter/strategic investor was not in transparent manner and was not in accordance with the Law. Aggrieved by the said order

IGIL preferred an Appeal before the Hon’ble AAIFR which was disposed of by the Hon’ble AAIFR on 14th September, 2015 by setting

aside the observation of the Hon’ble BIFR and remanding the matter back to the Hon’ble BIFR with a direction to consider the MDRS

in accordance with law.

In the meantime, net-worth of IGIL turned positive to Rs,12.15 lacs as per its Audited Balance Sheet as at 31st March, 2016.

Accordingly, IGIL has filed an application with the Hon’ble BIFR on 29th April, 2016 for deregistration from the purview of the

Sick Industrial Companies (Special Provisions) Act, 1985.

The Hon’ble BIFR passed an order on 6th May, 2016 wherein it directed the Operating Agency to file status reports (1) on the

business of the strategic investor after evaluating the induction of strategic investor and conducting due diligence, (2) whether

the induction of the strategic investor results in change of management of IGIL and (3) on the operation /function of IGIL after

visiting the unit of IGIL.

13. Call Option Agreement

A Call Option Agreement dated 30th March, 2015 has been entered by the Company with Talma Chemical Industries Private Limited

(Talma), a company having 100% interest in the Equity Share Capital of Visual Percept Solar Projects Private Limited (VPSPPL) to

acquire at a future date, 8914500 Equity Shares of Rs,10/- each fully paid at a mutually agreed price of Rs,25/- per Equity Share of

Rs,10/- each. 23. The Company has not incurred any cost in respect of RECs. The value of RECs remaining unsold and lying in

inventory as at the balance sheet date has been considered as Nil in the accounts.

14. The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other

disclosures for the preceding year 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, 2013

1. Based on the review made at the Balance Sheet date, MAT credit of Rs. 5642.00 lacs recognised in earlier years is carried forward as the Management is confident that there will be sufficient taxable profit during the specified period to utilise the same.

2. The Company was granted eligibility certificate dated 23rd February, 2007 under the "New Sugar Industry Promotion Policy, 2004" of the Government of Uttar Pradesh. Till March 2012, the Company had accounted for recoverable incentives aggregating to Rs. 16900.57 lacs and had availed remission of Rs. 8267.19 lacs.

The above policy was terminated by the Government of Uttar Pradesh vide order dated 4th June, 2007 wherein the Government expressed its intention to introduce another policy. Though in the "Sugar Industry, Co-generation & Distillery Promotion Policy, 2013" announced in the month of January, 2013 the benefits available under erstwhile policy are not covered, the Company is legally advised that it continues to be eligible to receive the incentives under the erstwhile policy. Furthermore, the Company has filed Writ Petition against withdrawal of the earlier policy which has been admitted by the Lucknow Bench of the Hon''ble Allahabad High Court vide its Order dated 9th May, 2008, the final hearing in respect of which is yet to be completed. As an interim measure, the Order dated 9th May, 2008 permitted limited protection in respect of remissions of taxes.

Accordingly, during the year, the Company has accounted for only remissions of Rs. 2373.70 lacs (Previous year Rs. 2539.95 lacs). Eligible reimbursements of Rs. 4505.98 lacs have, however, not been accounted for during the year which shall be accounted for in accordance with the final order of the High Court.

3. Employee Benefits :

As per Accounting Standard - 15 " Employee Benefits", the disclosure of Employee Benefits as defined in the Accounting Standard are as follows:

Defined Contribution Plan :

Employee benefits in the form of Provident Fund and Labour Welfare Fund are considered as defined contribution plan except that

4. Segment information as per Accounting Standard - 17 on ''Segment Reporting'' :

The Company has identified three primary business segments viz. Sugar, Distillery, Co-generation. Segments have been identified and reported taking into account the nature of the products, the differing risks and returns, the organisational structure and internal business reporting system.

a) 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 "Unallocable".

b) Segment assets and segment liabilities represent assets and liabilities of respective segment. Investments, tax related assets/ liabilities and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

5. Related party disclosures as per Accounting Standard - 18 are given below : a) Name of the related parties and description of relationship :

i) Subsidiaries : Indo Gulf Industries Ltd.

(Control exists) Balrampur Overseas Pvt. Ltd. (Upto 04.01.2013)

ii) Associate : VA Friendship Solar Park Pvt. Ltd.

iii) Key Managerial Personnel (KMP): Shri Vivek Saraogi - Managing Director

Smt. Meenakshi Saraogi - Joint Managing Director Shri Kishor Shah - Director-cum-Chief Financial Officer Dr. Arvind Krishna Saxena - Whole-time Director

iv) Relatives of Key Managerial Personnel : Shri Vivek Saraogi

1. Shri K.N.Saraogi (Father) - Chairman Emeritus

2. Smt. Meenakshi Saraogi (Mother)

3. Smt. Sumedha Saraogi (Wife)

4. Shri Karan Saraogi (Son)

5. Miss Avantika Saraogi (Daughter)

6. Smt. Stuti Dhanuka (Sister)

Smt. Meenakshi Saraogi

1. Shri K.N.Saraogi (Husband)

2. Shri Vivek Saraogi (Son)

3. Smt. Stuti Dhanuka (Daughter)

4. Smt. Sumedha Saraogi (Daughter-in-law)

5. Shri Karan Saraogi (Grand-Son)

6. Miss Avantika Saraogi (Grand-Daughter)

v) Enterprises over which KMP and their relatives have substantial interest / significant influence:

1. Meenakshi Mercantiles Ltd.

2. Udaipur Cotton Mills Co. Ltd.

3. Balrampur Institute of Vocational Aid

4. Balrampur Foundation

5. Kamal Nayan Saraogi (HUF)

6. Vivek Saraogi (HUF)

7. Kishor Shah (HUF)

6. The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 4th April, 2013 approved the dismantling of regulated release mechanism of sugar with immediate effect and also removed the obligation on the sugar mills to supply 10% of their sugar production as levy sugar for sugar produced on or after 1st October, 2012 i.e. for sugar season 2012-13 onwards. Necessary notifications in this regard have been issued on 2nd May, 2013. Therefore, the Company has given necessary effect of the announcement of CCEA in its books of account for the year ended 31st March, 2013.

7. The Board of Directors of the Company in their meeting held on 7th November, 2012 has approved the merger of Khalilabad Sugar Mills Pvt. Ltd. (KSMPL), a sick company registered with Board for Industrial and Financial Reconstruction (BIFR), with the Company subject to the approval of the Hon''ble BIFR and the Shareholders of the Company. The draft scheme of merger is under consideration of Hon''ble BIFR, the final hearing in respect of which is expected shortly. KSMPL has an installed capacity of 2500 TCD and is situated in the cane rich area near one of the Company''s existing facility at Babhnan. The proposed merger of KSMPL with the Company would add value to the Company''s integrated business model.

8. The previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year 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, 2011

1. (Note no. 3 of Schedule - 23)

The Company has accounted for Cane Price for the Sugar Season 2006-07 at State Advised Price of Rs.125/- per quintal. Subsequently, the Honble Supreme Court vide its interim order dated 27.02.2008 announced the price of Rs.118/- per quintal. Accordingly, subsequent payment of Cane dues remaining outstanding on the date of the Order were made by the Company @ Rs.118/- per quintal. Pending final decision of the Supreme Court, the impact of differential Cane Price has not been given in the Accounts.

2. (Note no. 4 of Schedule - 23)

There is a pari passu charge by way of hypothecation and equitable mortgage on the fixed assets of Kumbhi and Gularia units of the Company for an amount of Euro 4.50 million equivalent to Rs.2456.61 lacs (Previous year Rs.2456.61 lacs) in favour of BNP Paribas, India for securing various Swap Contracts entered into in connection with hedging in respect of various External Commercial Borrowings availed by the Company.

3. (Note no. 6 of Schedule - 23)

a) Land, Building, Plant & Machinery, Railway Siding, Tubewell and Water Supply Machinery of Balrampur unit were revalued as at 30th June, 1988 on net replacement value as per the report of S.R. Batliboi Consultants Pvt. Ltd. and the cost of respective assets aggregating to Rs.1200.77 lacs was substituted by the revalued amount of Rs.1920.52 lacs and the resultant increase was credited to Revaluation Reserve.

b) Land, Building and Plant & Machinery of Tulsipur unit were revalued as at 31st March, 1999 on net replacement value as per the report of Lodha & Co. and the cost of the respective assets aggregating to Rs.1023.85 lacs was substituted by the revalued amount of Rs.2944.93 lacs and the resultant increase was credited to Revaluation Reserve in the books of erstwhile Tulsipur Sugar Company Limited.

c) Land, Building and Plant & Machinery of Maizapur unit were revalued as at 30th September, 2008 on net replacement value as per the report of S.K. Ahuja & Associates and the cost of the respective assets aggregating to Rs.7645.46 lacs was substituted by the revalued amount of Rs.10546.40 lacs and the resultant increase was credited to Revaluation Reserve in the books of Indo Gulf Industries Limited.

Note :

Carried forward losses have been recognised as Deferred Tax Assets as per latest Income Tax assessment order / Return of Income filed by the Company as there is virtual certainty that such Deferred Tax Asset can be realised against future taxable profits in the forthcoming financial years.

4. (Note no. 8 of Schedule - 23) Details of Issued, Subscribed and Paid up Equity Share Capital of the Company:

i) 15,55,39,650 Equity Shares have been issued and allotted as fully paid up Bonus Shares by utilisation of Securities Premium, Capital Redemption Reserve and capitalisation of General Reserve.

ii) 2,37,55,600 Equity Shares have been issued to the members of erstwhile Babhnan Sugar Mills Limited pursuant to the Scheme of Amalgamation as fully paid up without payment received in cash.

iii) 21,15,400 Equity Shares have been issued to the members of erstwhile Tulsipur Sugar Company Limited pursuant to the Scheme of Amalgamation as fully paid up without payment received in cash.

iv) 44,048 Equity Shares have been issued to the members of Indo Gulf Industries Limited pursuant to the Rehabilitation Scheme containing the Scheme of Arrangement between the Company and Indo Gulf Industries Limited sanctioned by the Honble Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 24.06.2010 as fully paid up without payment received in cash.

v) Out of 2,27,66,780 Equity Shares of Rs.1/- each offered to the shareholders on right basis, issue of 17,270 (Previous year 17,270) Equity Shares has been kept in abeyance as per the direction of court.

vi) 1,63,52,000 fully paid up Equity Shares of Rs.1/- each were allotted against Global Depository Receipts (GDRs) which have since been converted.

vii) 42,25,350 fully paid Equity Shares have been allotted under Employees Stock Option Scheme.

viii) 34,49,147 Equity Shares were bought back and extinguished during the period.

ix) The Company has reserved issuance of 3,33,650 (Previous year 33,51,600) Equity Shares of Rs.1/- each for offering to eligible employees of the company under Employee Stock Option Scheme.

5. (Note no. 9 of Schedule - 23)

Pursuant to the resolution passed by the Board of Directors of the Company and in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, the Company made a Public Announcement on February 22, 2011, to buy-back the Equity Shares of face value of Rs.1/- each of the Company from open market through stock exchange route at a price not exceeding Rs.85/-per share, aggregating to Rs.11000.00 lacs.

The Company has bought back 46,78,678 Equity Shares as at 31st March, 2011 at an average price of Rs.69.80 per share, utilizing a sum of Rs.3265.96 lacs. The amount paid towards buy-back of shares, in excess of the face value, has been utilised out of General Reserve. In terms of the provisions of Section 77A of the Companies Act, 1956 and SEBI (Buy Back of Securities) Regulations 1998, as at 31st March, 2011 the Company has extinguished 34,49,147 Equity Shares and the remaining 12,29,531 Equity Shares have been extinguished on 13.04.2011. Consequently, the paid-up Equity Share capital of the Company has been reduced and the Company has created Capital Redemption Reserve of Rs.34.49 lacs towards the face value of 34,49,147 Equity Shares of Rs.1/- each by utilising General Reserve. The balance amount paid on buy- back of Equity Shares which are yet to be extinguished as on 31st March, 2011 has been shown by way of deduction from the Shareholders Fund.

6. (Note no. 10 of Schedule - 23)

The Employee Stock Option Scheme (Scheme 2005) of the Company was formulated in the year 2005. Under the said Scheme, Options granted have vesting period of one year and exercise period of maximum eight years. During the previous year, Options covered by 1st, 2nd, 3rd and 4th Series which remained outstanding were re-priced. The revised Exercise Price of Rs.45/- was approved by the Shareholders of the Company in the Extra-Ordinary General Meeting held on 25th May, 2009.

Note : Refer Directors Report for other disclosures.

7. (Note no. 11 of Schedule - 23)

a) The Storage Fund for Molasses has been created to meet the cost of construction 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 bank fixed deposits of Rs.175.05 lacs (Previous year Rs.84.55 lacs).

b) Fixed Deposits pledged with Excise authorities etc. Rs.60.01 lacs (Previous year Rs.45.01 lacs).

c) Fixed Deposits with Scheduled Banks include Rs.76.50 lacs (Previous year Nil) deposited with UPPCL towards security deposit.

Note : None of the Directors or their relatives have any interest in any of the Non-Scheduled Banks.

8. (Note no. 14 of Schedule - 23)

Based on the review made as at the Balance Sheet date, MAT Credit Entitlement to the extent of Rs.4016.18 lacs recognised in earlier years has been written down during the current period in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India.

However, based on future profitability projections, the Management is confident that there will be sufficient taxable profit during the specified periods which will enable the company to utilise the balance MAT Credit Entitlement of Rs.5642.00 lacs including Rs.3754.00 lacs recognised during the current period.

* Included in the line item "Total outstanding dues of Micro and Small Enterprises" under Schedule-12.

9. (Note no. 16 of Schedule - 23)

Excess amount of Levy Sugar Price received to date for various Sugar Seasons as per Orders of the Honble High Court Rs.34.96 lacs (Previous year Rs.43.15 lacs) has not been credited to the Profit & Loss Account as the matter is subjudice.

10. (Note no. 17 of Schedule - 23) Disclosures in terms of Accounting Standard -29 on Provisions, Contingent Liabilities and Contingent Assets:

a) Movement for Provision for Liabilities: (Rs. in Lacs)

Particulars Duties & taxes Others Amount

Balance as at 1st October, 2009 6.31 1.03 7.34

Provided during the period – – –

Amount used during the period – – –

Reversed during the period – 0.45 0.45

Balance as at 31st March, 2011 6.31 0.58 6.89

Timing of outflow/uncertainties Outflow on settlement/ crystallization

b) The Contingent Liabilities & Liabilities mentioned at Sl. No. 2 & 17 (a) respectively are dependent upon Court decision / out of Court settlement/disposal of appeals etc.

c) No reimbursement is expected in the case of Contingent Liabilities & Liabilities shown respectively under Sl.No. 2 & 17 (a) above and in view of this, no asset has been recognised in this respect.

11. (Note no. 20 of Schedule - 23) Excise Duty & Cess on Stock :

The amount of Excise Duty & Cess on Stock shown in Schedule - 16 represents differential Excise Duty & Cess on Opening & Closing Stock of finished goods/by products.

* The Company depreciates some of the fixed assets based on estimated useful life that are lower than those implicit in Schedule XIV to the Companies Act, 1956. Accordingly, the rate of depreciation used by the Company in respect of these fixed assets are higher than the rate prescribed under Schedule XIV.

Note: Re-appointment of the Managing Director, Joint Managing Director and Director cum CFO and their revised remuneration is subject to approval of the members in the ensuing Annual General Meeting.

Note :

i) During the period under review, the lenders have waived the requirement of providing personal guarantees.

ii) No Guarantee Commission has been paid to the guarantors.

12. (Note no. 24 of Schedule - 23)

The Company has been granted eligibility certificate dated 23rd February, 2007 under New Sugar Industry Promotion Policy, 2004 of the Government of Uttar Pradesh. Accordingly, incentives aggregating to Rs.8288.68 lacs (Previous year Rs.3722.93 lacs) allowable under the above policy have been accounted for during the period under review.

The above policy has been terminated by the Government of Uttar Pradesh vide order dated 4th June, 2007 wherein the Government expressed its intention to introduce another policy. The Company has been legally advised that it continues to be eligible to receive the incentives under the above policy. Furthermore, the Company has filed Writ Petition against withdrawal of the aforesaid policy which has been admitted by the Lucknow Bench of the Honble Allahabad High Court vide its Order dated 9th May, 2008, the hearing in respect of which is in progress.

13. (Note no. 25 of Schedule - 23) Intangible Assets

The unamortised amount of Computer Software (Acquired) Rs.4.23 lacs and Rs.0.13 lacs are to be amortised equally in the next 1 year & nine months and 2 years & one month respectively.

14. (Note no. 26 of Schedule - 23)

Employee Benefits :

As per Accounting Standard - 15 "Employee Benefits", the disclosure of Employee Benefits as defined in the Accounting Standard are as follows:

Defined Contribution Plan :

Employee benefits in the form of Provident Fund and Labour Welfare Fund are considered as defined contribution plan except that Provident fund in respect of certain employees is contributed to a fund set up by the Company which is treated as defined benefit plan since the Company has to meet the interest shortfall.

Defined Benefit Plan:

Long-term employee benefits in the forms of gratuity and leave encashment are considered as defined benefit obligation. The present value of obligation is determined based on actuarial valuation using projected unit credit method as at the Balance Sheet date. The amount of defined benefits recognised in the Balance Sheet represent the present value of the obligation as adjusted for unrecognised past service cost and as reduced by the fair value of plan assets.

Provident fund in respect of certain employees is contributed to a fund set up by the Company which is treated as a defined benefit plan since the Company has to meet the interest shortfall. The interest shortfall of Rs.23.93 lacs (Previous year Rs.6.54 lacs) at the period end is recognised as expense for the period.

VIII. Basis used to determine the expected Rate of return on Plan Assets :

The basis used to determine overall expected Rate of return on Plan Assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect the Capital and optimise returns within acceptable risk parameters, the Plan Assets are well diversified.

c) Other disclosures :

i) Basis of estimates of Rate of escalation in salary :

The estimates of rate of escalation in salary, considered in Actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

ii) The Gratuity and Provident Fund Expenses have been recognised under "Contribution to Provident Fund, Gratuity and Other Funds" and Leave Encashment under "Salaries, Wages, Bonus etc." under Schedule - 18.

iii) The amount of the Present value of Obligations, fair value of Plan Assets, Surplus/Deficit in the plan and experience adjustment arising on Plan Liabilities and Plan Assets for the previous two annual periods are not available and therefore, not disclosed.

15. (Note no. 27 of Schedule - 23)

Segment information as per Accounting Standard - 17 on Segment Reporting :

The Company has identified four primary business segments viz. Sugar, Distillery, Co-generation and Others. Segments have been identified and reported taking into account the nature of the products, the differing risks and returns, the organisational structure and internal business reporting system.

a) 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 "Unallocable".

b) Segment Assets and Segment Liabilities represent assets and liabilities of respective segment. Investments, tax related assets/ liabilities and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

Notes :

1) Transactions between segments are primarily for materials which are transferred at market determined prices. Common costs are apportioned on a reasonable basis.

2) Unallocable expenses are net of unallocable income Rs.1089.65 lacs (Previous year Rs.130.19 lacs).

3) Inter Segment Sales include Excise Duty & Cess Rs.976.32 lacs (Previous year Rs.586.72 lacs).

4) Figures in brackets pertain to previous year.

d) Information about Secondary Geographical Segments :

i) The information about secondary segments has not been furnished as the export revenue is less than 10% of the total revenue of the Company.

ii) The Company has common fixed assets located in India for producing goods for domestic and overseas markets. Therefore, the value of fixed assets and additions thereto can not be allocated to the geographical segments. Hence, the total carrying amount of segment assets and cost incurred during the period to acquire segment assets has not been given in respect of secondary segments.

16. (Note no. 28 of Schedule - 23)

Related party disclosures as per Accounting Standard - 18 are given below: a) Name of the related parties and description of relationship :

i) Subsidiaries : Indo Gulf Industries Ltd.

(Control exists) Balrampur Overseas Pvt. Ltd.

ii) Associates : VA Friendship Solar Park Private Limited

(Where the Company exercises significant influence)

iii) Key Managerial Personnel (KMP) : Mr. Vivek Saraogi - Managing Director

Mrs. Meenakshi Saraogi - Joint Managing Director

Mr. K.N. Ranasaria - Whole-time Director (upto 11.05.2009)

Mr. Kishor Shah - Director-cum-Chief Financial Officer

Dr. Arvind Krishna Saxena - Whole-time Director (from 01.08.2008)

iv) Relatives of Key Managerial Personnel :

Mr. Vivek Saraogi 1. Mr. K.N.Saraogi (Father) - Chairman Emeritus

2. Mrs. Meenakshi Saraogi (Mother)

3. Mrs. Sumedha Saraogi (Wife)

4. Mr. Karan Saraogi (Son)

5. Miss Avantika Saraogi (Daughter)

6. Mrs. Stuti Dhanuka (Sister)

Mrs. Meenakshi Saraogi 1. Mr. K.N. Saraogi (Husband)

2. Mr. Vivek Saraogi (Son)

3. Mrs. Stuti Dhanuka (Daughter)

4. Mrs. Sumedha Saraogi (Daughter-in-Law)

5. Mr. Karan Saraogi (Grand-Son)

6. Miss Avantika Saraogi (Grand-Daughter)

v) Enterprises in which KMP and their 1. Meenakshi Mercantiles Ltd. relatives have substantial interest : 2. Udaipur Cotton Mills Co. Ltd.

3. Kamal Nayan Saraogi (HUF)

4. Vivek Saraogi (HUF)

5. Kishor Shah (HUF)

# Excluding monetary value of perquisites

@ Maximum amount outstanding during the period Rs. 7500.00 lacs (Previous year Rs.9950.00 lacs). During the period under review, an amount of Rs.7275.00 lacs lying as loan to Subsidiary as on the appointment date was adjusted towards the value of consideration in connection with the merger of sugar unit of Indo Gulf Industries Ltd. (IGIL) with the Company. The Company also paid Rs.7.50 lacs to make the partly paid shares as fully paid shares in terms of the Scheme sanctioned by BIFR.

c) The transactions with related parties have been entered at an amount which are not materially different from those on normal commercial terms.

d) No amount has been written back / written off during the year in respect of due to / from related parties except reduction in face value of Equity Shares of IGIL from Rs.10/- to Rs.1/- as mentioned in Schedule - 6 of Investments.

e) The amount due from related parties are good and hence no provision for doubtful debts in respect of dues from such related parties is required except provision of Rs.283.27 lacs towards diminution in value of investments in shares of IGIL.

f) The value of companys holding of Rs.45.95 lacs in its subsidiary company IGIL was adjusted with the consideration amount on merger of sugar unit of IGIL with the Company as mentioned in Note No.32 (c).

g) Figures in brackets pertain to previous year.

17. (Note no. 29 of Schedule - 23)

Disclosure under clause 32 of the Listing Agreement :

There are no transactions (other than loan transactions with subsidiaries as given in para 28 (b) (xix) (b) above) which are required to be disclosed under Clause 32 of the Listing Agreement with the Stock Exchanges where the Equity Shares of the Company are listed.

18. (Note no. 32 of Schedule - 23)

a) Pursuant to sanction of the Rehabilitation Scheme containing the Scheme of Arrangement between the Company and Indo Gulf Industries Limited (IGIL, a Subsidiary of the Company) by the Honble Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 24.06.2010, the Sugar Unit of IGIL, hereinafter referred to as the "Demerged Undertaking", as defined in the Scheme, has been transferred to the Company with effect from the Appointed Date, 1st October, 2008.

b) The aforesaid Scheme of Arrangement has become effective on filing the certified copy of the order dated 24.06.2010 passed by Honble BIFR with the Registrar of Companies, Delhi and also with the Registrar of Companies, West Bengal both on 21.07.2010. Therefore, not withstanding a subsequent appeal filed by one of the stake holder against the aforesaid order of BIFR, the Company has recorded in its books all the assets and liabilities pertaining to the Demerged Undertaking at values as appearing in the books of IGIL as on the appointed date after giving effect of the Scheme save and except fixed assets having gross book value of Rs.7645.46 lacs which have been revalued prior to the demerger and accordingly the fixed assets have been recorded in the books of the Company at the revalued amount.

c) In consideration for the transfer and vesting of the Demerged Undertaking, the scheme provides for payment of Rs.75.00 lacs in cash and issue of Equity Shares worth Rs.85.15 lacs (including share premium) of the Company in the ratio of 1 Equity Share of Rs.1/- each fully paid up for every 100 Equity Shares of Rs.1/- in IGIL. However, Equity Shares worth Rs.45.95 lacs have not been issued in view of Companys holding of 53.96% in IGIL and thus Equity Shares amounting to Rs.39.20 lacs (including premium) have been issued to the share holders of IGIL.

d) The loss of Maizapur sugar unit of IGIL pertaining to period 1st October, 2008 to 30th September, 2009 i.e. from the appointed date till the end of the companys previous year ended 30th September, 2009 amounting to Rs.1248.17 lacs has also been recognised in the current period.

19. a) With effect from the Current accounting period, the Company has changed its financial year ending from 30th September to 31st March pursuant to the approval of Registrar of Companies, Kolkata. Accordingly, the current financial period is for eighteen months i.e. from 1st October, 2009 to 31st March 2011.

b) Figures for the current period include all the assets and liabilities and the revenues and expenses pertaining to the Demerged Undertaking as mentioned herein above. The previous year figure does not include the figures in respect of said Demerged Undertaking.

c) In view of above, the figures of the current financial period are not comparable with those of the previous year.

20. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current period financial statements and are to be read in relation to the amounts and other disclosures relating to the current period.


Sep 30, 2009

(Rupees in Lacs)

As at 30th As at 30th September, 2009 September, 2008

1. (Note no. 1 of Schedule - 23)

a) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for 234.58 256.97

b) Advances paid against above 95.57 115.57

2. (Note no. 2 of Schedule - 23)

Contingent Liabilities not provided for in respect of:

a) Calls in arrear of a Subsidiary Company in respect of partly paid up Equity Shares 181.90 181.90

b) Differential Cane Price for the Sugar Seasons 1978-79 and 1979-80 pending disposal of the Writs filed by the Company in Honble Calcutta High Court 32.93 32.93

c) Differential Cane Price for the Sugar Season 2007-08 pending disposal of the Writ filed by the U.P. Sugar Mills Association of which the Company is a member, in Honble Supreme Court of India 9076.97 9076.97

d) Claims for acquisition of 1.99 acres of land for the Chemical unit at Balrampur and Amount not Amount not compensation there against is under dispute as the matter is subjudice ascertainable ascertainable

e) Claims against the Company not acknowledged as debts :

i) Excise Duty Demand - under appeal 262.90 228.94

ii) Sales Tax Demand - under appeal 5.12 18.79

iii) Others - under appeal/litigation 861.87 203.46

f) Bank Guarantees furnished (Bank Guarantees are provided under Contractual/Legal obligation) 2884.66 2096.53

g) Corporate Guarantee given to a Bank on behalf of a Subsidiary 3550.00 3550.00

3. (Note no.3 of Schedule - 23)

The Company has accounted for Cane Price for the Sugar Season 2006-07 at State Advised Price of Rs.125/- per quintal. Subsequently, the Honble Supreme Court vide its interim order dated 27th February, 2008 announced the price of Rs.118/- per quintal. Accordingly, subsequent payment of Cane dues remaining outstanding on the date of the Order were made by the Company @ Rs.118/- per quintal. Pending final decision of the Supreme Court, the impact of differential Cane Price has not been given in the Accounts.

4. (Note no. 4 of Schedule - 23)

There is a pari passu charge by way of hypothecation and equitable mortgage on the fixed assets of Kumbhi and Gularia units of the Company for an amount of Euro 4.50 million equivalent to Rs.2456.61 lacs (Previous year Rs.2456.6l lacs) in favour of BNP Paribas, India for securing various Swap Contracts entered into in connection with hedging in respect of External Commercial Borrowings availed by the Company.

5. (Note no. 5 of Schedule - 23)

During the year, the Company sold its Investment in Equity Shares of following Associate Companies -. Name of the Associate No. of Shares sold

Avantika Ganna Private Limited 196600

Asia Sugar Industries Private Limited 750000

As a consequence of above, both ceased to be Associate of the Company.

6. (Note no. 6 of Schedule - 23)

a) Land, Building, Plant & Machinery, Railway Siding, Tubewell and Water Supply Machinery of Balrampur unit were revalued as at 30th June, 1988 on net replacement value as per the report of S.R. Batliboi Consultants Pvt. Ltd. and the cost of respective assets aggregating to Rs. 1200.77 lacs was substituted by the revalued amount of Rs. 1920.52 lacs and the resultant increase was credited to Revaluation Reserve.

b) Land, Building and Plant & Machinery of Tulsipur unit were revalued as at 31st March, 1999 on net replacement value as per the report of Lodha & Co. and the cost of the respective assets aggregating to Rs. 1023.85 lacs was substituted by the revalued amount of Rs.2944.93 lacs and the resultant increase was credited to Revaluation Reserve in the books of erstwhile Tulsipur Sugar Company Limited.

7. (Note no. 7 of Schedule - 23)

The Board of Directors of the Company in its meeting held on 27th July, 2009, has approved, subject to the approval of its Shareholders and the Board for Industrial & Financial Reconstruction (BIFR), revival proposal of its Subsidiary, Indo Gulf Industries Limited (IGIL) which is based on demerger of Sugar Unit of IGIL and merger of the said Sugar Unit with the Company. The draft Rehabilitation Scheme submitted by State Bank of India (Operating Agency) is under consideration of BIFR.

8. (Note no. 9 of Schedule - 23)

Details of Issued, Subscribed and Paid up Equity Share Capital of the Company:

a) 15,55,39,650 Equity Shares have been issued and allotted as fully paid up Bonus Shares by utilisation of Securities Premium, Capital Redemption Reserve and capitalisation of General Reserve.

b) 2,37,55,600 Equity Shares have been issued to the members of erstwhile Babhnan Sugar Mills Limited pursuant to the Scheme of Amalgamation as fully paid up without payment received in cash.

c) 21,15,400 Equity Shares have been issued to the members of erstwhile Tulsipur Sugar Company Limited pursuant to the Scheme of Amalgamation as fully paid up without payment received in cash.

d) Out of 2,27,66,780 Equity Shares of Re.l/- each offered to the shareholders on Rights basis, issue of 17.270 (Previous year 17,270) Equity Shares has been kept in abeyance as per the direction of Court.

e) 1,63,52,000 fully paid up Equity Shares of Re.l/- each were allotted in January, 2006 at a price of Rs.135/- per Share, ranking pari passu with the existing Equity Shares, each of which is represented by one Global Depository Receipt (GDR) issued @ LJS$ 3.0577 each for an aggregate amount of US$ 50 million.

9. (Note no. 10 of Schedule - 23)

The Company had issued 1,00,00,000 warrants convertible into equal number of Equity Shares of Re.l/- each at a premium of Rs.91A per Share to the Promoter Group and received Rs.920.00 lacs being 10% of the value of the warrants during the year 2007-08. As per the terms of issue and allotment of warrants, Promoters/allottees had the option to get the warrants converted into Equity Shares within a period of 18 months from the date of allotment by payment of balance 90% of the issue price. The said period of 18 months expired and the Company did not receive the balance 90% of the issue price. Therefore, 10% of the issue price received initially was forfeited and transferred to Capital Reserve.

10. (Note no. 12 of Schedule - 23)

a) Fixed Deposits with Scheduled Banks include an amount of Rs.84.55 lacs (Previous year Rs.6l.05 lacs) specifically earmarked for construction of Molasses Storage Tank.

b) Fixed Deposits pledged with Excise authorities etc. Rs.45.01 lacs (Previous year Rs.45.01 lacs).

11. (Note no. 15 of Schedule - 23)

The Company has recognised Rs.5904.18 lacs as Minimum Alternate Tax (MAT) Credit Entitlement, the credit of which would be available based on the provisions of Section 115 JAA of the Income Tax, 1961. The Management, based on the future profitability projections and also profit earned during the year, is confident that there would be sufficient taxable profit in future which will enable the Company to utilise the above MAT Credit Entitlement.

12. (Note no. 17 of Schedule - 23)

Excess amount of Levy Sugar Price received to date for various Sugar Seasons as per Orders of the Honble High Court Rs.43.15 lacs (Previous year Rs.43.15 lacs) has not been credited to the Profit & Loss Account as the matter is subjudice.

13. (Note no. 18 of Schedule - 23)

b) The Contingent Liabilities & Liabilities mentioned at SI. No. 2 & 18 (a) respectively are dependent upon Court decision / out of Court settlement/disposal of appeals etc.

c) No reimbursement is expected in the case of Contingent Liabilities & Liabilities shown respectively under Sl.No. 2 & 18(a) above and in view of this no asset has been recognised in this respect.

14. (Note no. 21 of Schedule - 23) Excise Duty & Cess on Stock :

The amount of Excise Duty & Cess on Stock shown in Schedule - 16 represents differential Excise Duty & Cess on Opening & Closing Stock of finished goods/by products.

15. (Note no. 25 of Schedule - 23)

The Company has been granted eligibility certificate dated 23rd February, 2007 under New Sugar Industry Promotion Policy, 2004 of the Government of Uttar Pradesh. Accordingly, incentives aggregating to Rs.3722.93 lacs (Previous year Rs.4281.53 lacs) allowable under the above policy have been accounted for.

The above policy has been terminated by the Government of Uttar Pradesh vide order dated 4th June, 2007 wherein the Government expressed its intention to introduce another policy. The Company has been legally advised that it continues to be eligible to receive the incentives under the above policy. Furthermore, the Company has filed Writ Petition against withdrawal of the aforesaid policy which has been admitted by the Lucknow Bench of the Honble Allahabad High Court vide its Order dated 9th May, 2008, the hearing in respect of which is in progress.

16. (Note no. 26 of Schedule - 23) Intangible Assets

a) The unamortised amount of Share Issue Expenses Rs.53-27 lacs is to be amortised in the next 6 months.

b) The unamortised amount of Computer Software (Acquired) Rs.1.79 lacs and Rs.0.21 lac are to be amortised equally in the next 3 years & three months and 3 years & seven months respectively.

17. (Note no. 27 of Schedule - 23) Employee Benefits :

As per Accounting Standard - 15, the disclosure of Employee Benefits as defined in the Accounting Standard are as follows:

Defined Contribution Plan :

Employee benefits in the form of Provident Fund and Labour Welfare Fund are considered as defined contribution plan except that Provident fund in respect of certain employees is contributed to a fund set up by the Company which is treated as defined benefit plan since the Company has to meet the interest shortfall.

Defined Benefit Plan:

Post employment and other long-term employee benefits in the forms of gratuity and leave encashment are considered as defined benefit obligation. The present value of obligation is determined based on actuarial valuation using projected unit credit method as at the Balance Sheet date. The amount of defined benefits recognised in the Balance Sheet represent the present value of the obligation as adjusted for unrecognised past service cost and as reduced by the fair value of plan assets.

Provident fund in respect of certain employees is contributed to a fund set up by the Company which is treated as a defined benefit plan since the Company has to meet the interest shortfall. The interest shortfall of Rs.6.54 lacs (Previous year Rs.24.6l lacs) at the year end is recognised as expense for the year.

IX. Basis used to determine the expected Rate of return on Plan Assets :

The basis used to determine overall expected Rate of return on Plan Assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect the Capital and optimise returns within acceptable risk parameters, the Plan Assets are well diversified

18. (Note no. 28 of Schedule - 23)

Segment information as per Accounting Standard - 17 on Segment Reporting :

The Company has identified four primary business segments viz. Sugar, Distillery, Co-generation and Organic Manure. Segments have been identified and reported taking into account the nature of the products, the differing risks and returns, the organisational structure and internal business reporting system.

a) 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 "Unallocable".

b) Segment Assets and Segment Liabilities represent assets and liabilities of respective segment. Investments, tax related assets/ liabilities and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

d) Information about Secondary Geographical Segments :

i) The information about secondary segments has not been furnished as the export revenue is less than 10% of the total revenue of the Company.

ii) The Company has common fixed assets located in India for producing goods for domestic and overseas markets. Therefore, the value of fixed assets and additions thereto can not be allocated to the geographical segments. Hence, the total carrying amount of segment assets and cost incurred during the year to acquire segment assets has not been given in respect of secondary segments.

19. (Note no.29 of Schedule - 23)

Related party disclosures as per Accounting Standard - 18 are given below: a) Name of the related parties and description of relationship :

i) Subsidiaries : Indo Gulf Industries Ltd.

(Control exists) Balrampur Overseas Pvt. Ltd.

ii) Associates : Avantika Ganna Pvt. Ltd. (Till 20.12.2008)

(Where the Company exercises significant influence) Asia Sugar Industries Pvt. Ltd. (Till 02.07.2009)

iii) Key Managerial Personnel (KMP): Mr. Vivek Saraogi - Managing Director

Mrs. Meenakshi Saraogi - Joint Managing Director

Mr. K.N. Ranasaria - Whole-time Director (upto 11.05.2009)

Mr. Kishor Shah - Director-cum-Chief Financial Officer

Mr. R.N. Mishra - Whole-time Director (upto 31.07.2008)

Dr. Arvind Krishna Saxena - Whole-time Director (from 01.08.2008)

iv) Relatives of Key Managerial Personnel:

Mr. Vivek Saraogi 1. Mr. K.N.Saraogi (Father) - Chairman Emeritus

2. Mrs. Meenakshi Saraogi (Mother)

3. Mrs. Sumedha Saraogi (Wife)

4. Mr. Karan Saraogi (Son)

5. Miss Avantika Saraogi (Daughter)

6. Mrs. Satyawati Saraogi (Grand-Mother)

7. Mrs. Stuti Dhanuka (Sister)

Mrs. Meenakshi Saraogi 1. Mr. K.N. Saraogi (Husband)

2. Mr. Vivek Saraogi (Son)

3. Mrs. Stuti Dhanuka (Daughter)

4. Mrs. Sumedha Saraogi (Daughter-in-Law)

5. Mr. Karan Saraogi (Grand-Son)

6. Mrs. Satyawati Saraogi (Mother-in-Law)

7. Miss Avantika Saraogi (Grand-Daughter)

v) Enterprises in which KMP and their 1. Kamal Nay an & Co.

relatives have substantial interest : 2. Meenakshi Mercantiles Ltd.

3. Udaipur Cotton Mills Co. Ltd.

4. Kamal Nayan Saraogi (HUF)

5. Vivek Saraogi (HUF)

20. (Note no.30 of Schedule-23)

Disclosure under clause 32 of the Listing Agreement:

There are no transactions (other than loan transactions with subsidiaries as given in para 29 (b) (xix) (b) above) which are required to be disclosed under Clause 32 of the Listing Agreement with the Stock Exchanges where the Equity Shares of the Company are listed.

21. Previous years figures have been re-grouped / re-arranged wherever found necessary to make them comparable with those of the current year.

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