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Notes to Accounts of Upper Ganges Sugar & Industries Ltd.

Mar 31, 2016

1. SHARE CAPITAL

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year Equity shares

(b) Terms / rights attached to Equity Shares

The Company has only one class of equity shares having a par value of ''10 per share. Each holder of equity shares is 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 amounts. The distribution to equity shareholders will be in proportion to the amount paid on the shares held by them.

(c) Terms of redemption of Preference Shares

The Non-Convertible Cumulative Redeemable Preference Shares (NCCRPS) carries dividend @12% per annum.

NCCRPS shall be redeemable at par on 24th September, 2019 being 5 years from the date of allotment i.e. 25th September, 2014 with a right vested to the Board of Directors to redeem it earlier, but not before 12 months from the date of issue.

The Dividend is payable annually, subject to the availability of the profit. However, the unpaid cumulative dividend, if any, is payable along with the redemption of NCCRPS.

(d) Details of shareholders holding more than 5% shares in the company

(a) Term Loans from Banks under project finance / corporate loan scheme, carry interest in the range of 11.85% to 12.75% and are secured by first mortgage / charge on all the immovable and movable assets (save and except book debts), present and future, of the Companies Sugar Units at Sahara (including Co-generation plant), Sidhwalia & Hasanpur and Distillery unit at Sahara , ranking pari passu amongst the various lenders, subject to prior charges created on movables for working capital borrowings from the Companies bankers. Further, the term loan of Rs, 3,300 lacs (''Rs, 4,400 lacs) is also secured by pledge of certain shares held as investments by the Company and its subsidiary Company (Refer note 13a).

The above loans are repayable as under.

(b) Term Loans from Punjab National Bank (PNB) & State Bank of India (SBI) under Financial Assistance Scheme (SEFASU 2014) carry interest of 12% and 12.50% p.a. respectively and is repayable in monthly / quarterly installments ending on March 2019. The Company is entitled to Interest subvention from Government of India up to 12% as per the terms of schedule and the same will be directly reimbursed to Banks by Department of Food & Public Distribution and hence no liability towards interest of 12% p.a. has been provided in these accounts. The above loan is secured by the first pari-passu charge on all the fixed assets, both present and future of the Companies Sugar unit at Seohara, Sidhwalia and Hasanpur. The term loan from PNB is further secured by 3rd pari-passu charge on all current assets of the above sugar units.

(c) Term loan from a bank under Financial Assistance Scheme of the Government of India (SOFT Loan 2015), carry interest rate in the range of 10.60% to 11% p.a. and repayable in 20 equal quarterly installments by 30th September, 2022. The Company is entitled to interest subvention from the Government of India up to 10% for first year as per terms of the Scheme and the same will be reimbursed directly to banks by the Department of Food & Public Distribution and hence, no liability towards interest under subvention has been provided in these accounts. The above loans are secured/ to be secured by the first parri-passu charge on all the fixed asets,both present and future, of all sugar units of the Company at Seohara,Sidhwalia and Hasanpur.

(d) Term loan from a bank under Financial Assistance Scheme of the State Government of Bihar (SOFT Loan 2015), carry interest rate of 13% p.a. and repayable in 20 equal installments by 31st March, 2021. The Company is entitled to interest subvention from the Government of Bihar up to 12% for first year and 10% thereafter as per terms of the Scheme and the same will be reimbursed directly to banks by the State Government of Bihar and hence, no liability towards interest under subvention has been provided in these accounts. The above loans are secured/ to be secured by the first parri-passu charge on all the fixed assets, both present and future, of all sugar units of the Company at Seohara,Sidhwalia and Hasanpur.

(e) Term loans from the Sugar Development Fund, carry interest @ 4% p.a. and are secured by a second charge on all the immovable and movable assets (save and except book debts), present and future of the Company''s Sugar unit at Sidhwalia (including Co-generation Plant).

Provision for litigation, claims and contingencies

The Company has estimated the provision for pending litigation, claims and demands based on the assessment of probability for these demands being crystallizing against the Company in due course. The table below gives information about movement in litigation, claims and contingencies provisions.

(a) Cash credit borrowings from Banks, other than from District Co-operative Bank Ltd. and DCB Bank Ltd. (Commodity Finance) are secured by hypothecation of the current assets of the Company ranking pari passu amongst the various lenders. In addition, cash credit borrowings from State Bank of India, Punjab National Bank and DCB Bank Ltd. is further secured by a charge on the immovable assets as follows:

i. Cinnatolliah Tea Unit - First Charge;

ii. Hasanpur Sugar Mills - Second Charge;

iii. Seohara Sugar Unit - Third Charge (ranking pari-passu between the lenders);

iv. Bharat Sugar Mills - Third Charge.

(b) Cash credit of '' 15,126.28 lacs ('' 11,549.24 lacs) from District Co-operative Bank Ltd. and DCB Bank Ltd. (Commodity Finance) are secured by pledge of the stock of sugar pertaining to Sugar units at Seohara and Sidhwalia.

(c) Cash Credit borrowings carry interest ranging between 11.25% to 12.90% p.a.

2. OTHER CURRENT LIABILITIES

(a) Title deeds tor Rs, 25.42 lacs (Rs, 25.42 lacs) are yet to be executed in favor of the Company.

(b) IncludesRs, 585.34 lacs which has been recapitalized on account of Capital Subsidy received during the year and depreciation of Rs, 174.40 lacs thereon provided in earlier years has been reversed during the year.

(c) Includes assets held in joint ownership with others, Gross BlockRs, 264.74 lacs (Rs, 264.81 lacs) and Net BlockRs, 151.16 lacs (Rs, 157.33 lacs), details of which is as under:

a) Includes 6,37,365 shares pledged against term loan of Rs, 3,300 lacs (Rs, 4,400 lacs) taken from a bank (refer Note 5).

b) The figures, being less than Rs, 500, have been shown above as blank.

c) Deposited / pledged with various Government authorities.

d) The cost of following unquoted investments in equity shares (fully paid up) has been written off in the past, though quantity thereof appears in the books.

e) There is a diminution of Rs, 216.75 lacs (Rs, 216.75 lacs) in the value of certain long term quoted investments based on the last quoted price. The above diminution in the opinion of the management is temporary in nature since the breakup value of the said shares supplemented by the market value as on 31st March 2016, of the quoted investments held by the investee Company, is much higher than the corresponding Book Value and hence no provision is considered necessary.

3. GRATUITY - DEFINED BENEFIT PLAN

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms as per the provisions of The Payment of Gratuity Act, 1972. The Company has got an approved gratuity fund which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liabilities.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

Statement of profit and loss

Net employee benefit expense recognized in employee costs

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Defined Contribution Plan:

The Company has recognized the following amount as an expense and included under "Contribution to Provident & Other Funds".

4. LEASES Operating lease:

Certain office premises, go downs, cane purchasing centre etc. are held on operating lease. The lease term is ranging up to 3 years and is renewable for further year either mutually or at the option of the Company. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease agreements. There are no subleases. The leases are cancellable.

5. SEGMENT INFORMATION

The primary segment reporting format is determined to be business segments as the company''s risks and rates of return are affected predominantly by differences in the products produced. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. Accordingly, the Company has identified "Sugar", "Spirits", "Co-generation" and "Tea" as the operating segments:

Sugar - Consists of manufacture, trading and sale of Sugar, Molasses and Biogases

Spirits - Consists of manufacture and sale of Industrial Spirits (including Ethanol), Fusel Oil and Bio-Compost Co-generation - Consists of generation and transmission of Power Tea - Consist of cultivation, manufacture and sale of tea Others - Consist of Miscellaneous business comprising of less than 10% revenues.

The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

6. SEGMENT INFORMATION (CONTD.)

Business segments

Year ended 31st March 2016

7. RELATED PARTY TRANSACTIONS

The following table provides the total amount of transactions that have been entered into with related parties for the reporting year:

The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the company as a whole.

8. CAPITAL AND OTHER COMMITMENTS

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) ''Rs, 263.25 lacs ('' Rs, 263.25 lacs).

9. CONTINGENT LIABILITIES

* Based on discussions with the solicitors / favorable decisions in similar cases / legal opinions taken by the Company, the management believes that it is possible but not probable the action will succeed and accordingly no provision there against is considered necessary.

10. The Company''s Board of Directors has approved a Composite Scheme of arrangement amongst the Company, The Oudh Sugar Mills Limited, Palash Securities Limited, Allahabad Canning Limited, Ganges Securities Limited, Cinnatolliah Tea Limited, Vaishali Sugar & Energy Limited, Magadh Sugar & Energy Limited, Avadh Sugar & Energy Limited in terms of the provisions of Section 391 to 394 and other applicable provisions of the Companies Act, 1956 & Companies Act 2013 to the extent applicable, to restructure and de-link its multiple business in separate new entities w.e.f 1 April 2015 subject to necessary approvals. The Company is in the process of obtaining necessary approvals from various concerned authorities and pending such approvals, no accounting adjustment has been made in these financial statements.

11. The land ceiling matter under the U.P. Imposition of Ceiling on Land Holdings Act, 1960 / Bihar Land Reforms (Fixation of Ceiling, Area and Acquisition of Surplus Land) Act, 1961 for acquisition of agricultural land by the Government is pending before the appropriate adjudicating authorities.


Mar 31, 2015

(A) Terms / rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is 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 amounts. The distribution to equity shareholders will be in proportion to the amount paid on the shares held by them.

(B) Terms of redemption of Preference Shares

The Non-Convertible Cumulative Redeemable Preference Shares (NCCRPS) carries dividend @12% per annum.

NCCRPS shall be redeemable at par on 24th September, 2019 being 5 years from the date of allotment i.e. 25th September, 2014 with a right vested to the Board of Directors to redeem it earlier, but not before 12 months from the date of issue.

The Dividend is payable annually, subject to the availability of the profit. However, the unpaid cumulative dividend, if any, is payable along with the redemption of NCCRPS.

2. LONG-TERM BORROWiNGS

(a) Term Loans from Banks under project finance / corporate loan scheme, carry interest in the range of 12.25% to 12.75% and are secured by first mortgage / charge on all the immovable and movable assets (save and except book debts), present and future, of the Company's Sugar Units at Seohara (including Co-generation plant) , Sidhwalia & Hasanpur and Distillery unit at Seohara, ranking pari passu amongst the various lenders, subject to prior charges created on movables for working capital borrowings from the Company's bankers. Further, the term loan of Rs. 4,400 lacs (Rs. 5,500 lacs) is also secured by pledge of certain shares held as investments by the Company and its subsidiary Company.

(c) Term loans from the Sugar Development Fund, carry interest @ 4% p.a. and are secured by a second charge on all the immovable and movable assets (save and except book debts), present and future of the Company's Sugar units at Seohara (including Co-generation Plant) and Sidhwalia (including Co-generation Plant).

(d) Fixed Deposits from related parties / others carry interest @ 11.75% to 12.50% and are repayable after two years from the respective date of deposits, depending upon their tenure.

Provision for iitigation, ciaims and contingencies

The Company has estimated the provision for pending litigation, claims and demands based on the assessment of probability for these demands being crystallising against the Company in due course. The table below gives information about movement in litigation, claims and contingencies provisions.

3. SHORT-TERM BORROWINGS

(a) Cash credit borrowings from Banks, other than from District Co-operative Bank Ltd. and DCB Bank Ltd. (Commodity Finance) are secured by hypothecation of the current assets of the Company ranking pari passu amongst the various lenders. In addition, cash credit borrowings from State Bank of India, Punjab National Bank and DCB Bank Ltd. is further secured by a charge on the immovable assets as follows :

i. Cinnatolliah Tea Unit - First Charge;

ii. Hasanpur Sugar Mills - Second Charge;

iii. Seohara Sugar Unit - Third Charge (ranking pari-passu between the lenders);

iv. Bharat Sugar Mills - Third Charge.

(b) Cash credit of Rs. 11,549.24 lacs (Rs. 8,764.72 lacs) from District Co-operative Bank Ltd. and DCB Bank Ltd. (Commodity Finance) are secured by pledge of the stock of sugar pertaining to Sugar units at Seohara and Sidhwalia.

(c) Cash Credit borrowings carry interest ranging between 11.75% to 12.90% p.a.

(e) There is a diminution of Rs. 216.75 lacs (Rs. 216.75 lacs) in the value of certain long term quoted investments based on the last quoted price. The above diminution in the opinion of the management is temporary in nature since the break up value of the said shares supplemented by the market value as on 31st March 2015, of the quoted investments held by the investee Company, is much higher than the corresponding Book Value and hence no provision is considered necessary.

4. GRATUITY - DEFINED BENEFIT PLAN

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms as per the provisions of The Payment of Gratuity Act, 1972. The Company has got an approved gratuity fund which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liabilities.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the plan.

The Company expects to contribute Rs. 100.00 lacs (Rs. 100.00 lacs) to Gratuity Fund in the next year.

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

5. LEASES

Operating [ease :

Certain office premises, godowns, cane purchasing centre etc. are held on operating lease. The lease term is ranging up to 3 years and are renewable for further year either mutually or at the option of the Company. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease agreements. There are no subleases. The leases are cancellable.

6. SEGMENT INFORMATION

The primary segment reporting format is determined to be business segments as the company's risks and rates of return are affected predominantly by differences in the products produced. Secondary information is reported geographically. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. Accordingly, the Company has identified "Sugar", "Spirits", "Co-generation" and "Tea" as the operating segments :

Sugar - Consists of manufacture, trading and sale of Sugar, Molasses and Bagasse

Spirits - Consists of manufacture and sale of Industrial Spirits (including Ethanol), Fusel Oil and Bio-Compost Co-generation - Consists of generation and transmission of Power Tea - Consist of cultivation, manufacture and sale of tea

Others - Consist of Miscellaneous business comprising of less than 10% revenues.

The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

7. CONTINGENT LIABILITIES

Rs. in lacs

Year Ended Year Ended 31st March 2015 31st March 2014

(a) Demands / Claims by various Government Authorities and others not acknowledged as debt and contested by the Company :

(i) Excise Duty & Service Tax 5,292.11 3,549.67

(ii) Others 224.98 28.82

Total 5,517.09 * 3,578.49

(b) Bank Guarantees outstanding 550.72 691.09

(c) Corporate Guarantees given to a bank 3,600.00 -

(d) Arrear Dividend (including tax) on Non-Convertible Cumulative Redeemable Preference Shares (NCCRPS) 222.50 -

* Based on discussions with the solicitors / favorable decisions in similar cases / legal opinions taken by the Company, the management believes that it is possible but not probable the action will succeed and accordingly no provision there against is considered necessary.

8. The Government of Uttar Pradesh has announced Subsidy for Sugar Industry for the Sugar Season 2014-2015 linked to average selling price of sugar and its by-products during the period 1st October 2014 to 31st May 2015. The average selling prices of Sugar and the by-products have been significantly lower than the thresholds specified in the subsidy scheme considering the actual and future realisation. In view of this, the Company has estimated and recognised subsidy amounting to Rs. 3,526.54 lacs during the year based on such prevalent prices. The Company is confident of realizing the subsidy in view of the current prices of Sugar and the by-products.

9. The Company's Board of Directors at its meeting held on 13th March 2015 has approved a Composite Scheme of arrangement amongst the Company, The Oudh Sugar Mills Limited, Palash Securities Limited, Allahabad Canning Limited, Ganges Securities Limited, Cinnatolliah Tea Limited, Vaishali Sugar & Energy Limited, Magadh Sugar & Energy Limited, Avadh Sugar & Energy Limited in terms of the provisions of Section 391 to 394 and other applicable provisions of the Companies Act, 1956 & Companies Act 2013 to the extent applicable, to restructure and de-link its multiple business in separate new entities w.e.f 1st April 2015 subject to necessary approvals. Accordingly, the Company has incorporated new subsidiaries namely Ganges Securities Limited, Cinnatolliah Tea Limited and Magadh Sugar & Energy Limited and the joint venture entity namely Avadh Sugar & Energy Limited. The Company is in the process of filing the scheme for approval with the concerned authorities.

10. The land ceiling matter under the U.P. Imposition of Ceiling on Land Holdings Act, 1960 / Bihar Land Reforms (Fixation of Ceiling, Area and Acquisition of Surplus Land) Act, 1961 for acquisition of agricultural land by the Government is pending before the appropriate adjudicating authorities.

It is not possible to identify consumption of spare parts separately and hence consumption of stores and spares is shown above.

11. Previous year's figures including those given in brackets have been regrouped / rearranged wherever necessary.


Mar 31, 2014

1. Corporate Information

Upper Ganges Sugar & Industries Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on National and Bombay Stock exchanges in India. The Company is primarily engaged in manufacture and sale of Sugar and its By-products (Molasses and Bagasse), Spirits including Ethanol, Power and Tea. The Company presently has manufacturing facilities at Seohara, District Bijnor in the State of Uttar Pradesh, at Sidhwalia, District Gopalganj and at Hasanpur, District Samastipur in the State of Bihar and Tea Garden at North Lakhimpur in the state of Assam.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated 4 April 2014, issued by the Ministry of Corporate Affairs. The financia statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

3. Gratuity - Defined Benifit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms as per the provisions of The Payment of Gratuity Act, 1972. The Company has got an approved gratuity fund which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liabilities.

* Experience adjustments on plan liabilities and assets are not readily available for the year 2009-10 and hence not disclosed.

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

4. Leases operating lease :

Certain office premises, godowns, cane purchasing centre etc. are held on operating lease. The lease term is ranging up to 3 years and are renewable for further year either mutually or at the option of the Company. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease agreements. There are no subleases. The leases are cancellable.

5. contingent liabilities (Rs. in lacs) 31st March, 2014 31st march, 2013

(a) Demands / Claims by various Government Authorities and others not acknowledged as debt and contested by the Company :

(i) Excise Duty & Service Tax 3,549.67 1,921.88

(ii) Sales & Entry Tax - 113.05

(iii) Collection charges against Cane Dues - 431.42

(iv) Others 28.82 33.37

Total 3,578.49 * 2,499.72

(b) Outstanding towards crop loan disbursed to growers for which - 62.62 corporate guarantee is given to the banks

(c) Bank Guarantees outstanding 691.09 24.00

* Based on discussions with the solicitors/favourable decisions in similar cases/legal opinions taken by the Company, the management believes that it is possible but not probable the action will succeed and accordingly no provision there against is considered necessary.

6. The land ceiling matter under the U.P. Imposition of Ceiling on Land Holdings Act, 1960 / Bihar Land Reforms (Fixation of Ceiling, Area and Acquisition of Surplus Land) Act, 1961 for acquisition of agricultural land by the Government is pending before the appropriate adjudicating authorities.

7. Previous year''s figures including those given in brackets have been regrouped/ rearranged wherever necessary. Fur- ther, the previous period figures being for nine months period from 1st July 2012 to 31st March, 2013 (except in case of Cinnatolliah Tea garden, a unit of the Company , where figures for twelve months were included due to change in accounting year of said unit in 2012-13), are not comparable with current year figures.


Mar 31, 2013

1. CORPORATE INFORMATION

Upper Ganges Sugar & Industries Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on National and Bombay Stock exchanges in India. The Company is primarily engaged in manufacture and sale of Sugar and its By-products (Molasses and Bagasse), Spirits including Ethanol, Power and Tea. The Company presently has manufacturing facilities at Seohara, District Bijnor in the State of Uttar Pradesh, at Sidhwalia, District Gopalganj and at Hasanpur, District Samastipur in the State of Bihar and Tea Garden at North Lakhimpur in the State of Assam.

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

3. LEASES

Operating lease:

Certain office premises, godowns, cane purchasing centre etc. are held on operating lease. The lease term is ranging up to 3 years and are renewable for further year either mutually or at the option of the Company. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease agreements. There are no subleases. The leases are cancellable.

4. During the current period, the Company except for its Tea unit, has implemented SAP system under ERP platform. Accordingly, the Company has changed its method of valuation of inventory of raw materials and stores and spares from weighted average method to moving average method. However, this change has no material impact on profit for the current period.

5. SEGMENT INFORMATION

The primary segment reporting format is determined to be business segments as the company''s risks and rates of return are affected predominantly by differences in the products produced. Secondary information is reported geographically. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. Accordingly, the Company has identified "Sugar", "Spirits", "Co-generation" and "Tea" as the operating segments:

Sugar - Consists of manufacture, trading and sale of Sugar, Molasses and Bagasse

Spirits - Consists of manufacture and sale of Industrial Spirits (including Ethanol), Fusel Oil and Bio- Compost

Co-generation - Consists of generation and transmission of Power

Tea - Consist of cultivation, manufacture and sale of tea

Others - Consist of Miscellaneous business comprising of less than 10% revenues.

6. CAPITAL AND OTHER COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. 1,762.93 lacs (Rs. 1,115.21 lacs).

(b) For commitments relating to lease arrangements, please refer note 31.

* Based on discussions with the solicitors/favourable decisions in similar cases/legal opinions taken by the Company, the management believes that the Company has a good chance of success in the above mentioned cases and hence, no provision against these are considered necessary.

7. There is a diminution of Rs. 216.75 lacs (Rs. 216.75 lacs) in the value of certain long term quoted investments based on the last quoted price. The above diminution in the opinion of the management is temporary in nature since the break-up value of the said shares supplemented by the market value as on 31 st March 2013, of the quoted investments held by the investee Company, is much higher than the corresponding Book Value and hence no provision is considered necessary.

8. The land ceiling matter under the U.P. Imposition of Ceiling on Land Holdings Act, 1960/Bihar Land Reforms (Fixation of Ceiling, Area and Acquisition of Surplus Land) Act, 1961 for acquisition of agricultural land by the Government is pending before the appropriate adjudicating authorities.

9. The Ministry of Consumer Affairs, Food and Public Distribution, Government of India vide its Notification 281 (E) dated May 2,2013 has dispensed away the levy obligation from sugar season 2012-13 onwards. Accordingly, all Sugar Stocks for the current sugar season have been valued as Free Sugar.

10. The accounting year of Cinnatolliah Tea Garden, a unit of the Company, used to close on 31st March, as against the Company accounts which used to close on 30th June which has now been changed to 31st March from current year. In view of above, the accounts of the said unit for twelve months period ended 31 st March, 2013 have been considered in these accounts as against the Company''s accounts for the nine months period ended 31st March, 2013.

11. The Company has changed its accounting year ending on 30th June to 31 st March and hence the current period figures being for nine Months period from 1 st July, 2012 to 31 st March,2013 are not comparable with those of the previous year.

12. Previous year''s figures including those given in brackets have been re-grouped/rearranged wherever necessary.


Jun 30, 2012

1. CORPORATE INFORMATION

Upper Ganges Sugar & Industries Limited (the Company) is a public Company domiciled in India and an existing Company under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India. The Company is primarily engaged in manufacture and sale of Sugar and its By-products (Molasses and Bagasse), Spirits including Denaturants and Ethanol, Power and Tea. The Company presently has manufacturing facilities at Seohara, District Bijnor in the State of Uttar Pradesh, at Sidhwalia, District Gopalganj and at Hasanpur, District Samastipur in the State of Bihar and Tea Garden at North Lakhimpur in the state of Assam.

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year, except for the change in accounting policy explained in 2.1 (a) below.

(a) Terms/rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is 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 amounts. The distribution to equity shareholders will be in proportion to the amount paid.

3. GRATUITY - DEFINED BENEFIT PLAN

The Company has a defined benefit gratuity plan. Every employee who has completed at least five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The Company has got an approved gratuity fund which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liabilities.

The following tables summarize the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the plan.

4. Assets, Liabilities and Income and Expenditure of Cinnatolliah Tea Garden have been incorporated as at and for the year ended 31st March 2012 as the financial year of the Tea Garden closes on 31st March of every year. The net balance of payments and realisations on account of the said Tea Garden during the period from 1 April 2012 to 30 June 2012 has been shown separately under the head "Tea Department Balance" in the Balance Sheet, pending adjustments in the next year's accounts.

5. The land ceiling matter under the U.P. Imposition of Ceiling on Land Holdings Act, 1960 / Bihar Land Reforms (Fixation of Ceiling, Area and Acquisition of Surplus Land) Act, 1961 for acquisition of agricultural land by the Government is pending before the appropriate adjudicating authorities.

6. DERIVATIVE INSTRUMENTS OUTSTANDING AS ON THE BALANCE SHEET DATE:

Currency / Interest rate swap for foreign currency loan of US$ 1.33 millions (30 June 2011 : US$ 4.00 millions) equivalent to Rs. 614.57 lacs (30 June 2011 : Rs. 1,843.70 lacs) @ 6 months Libor 1.30% p.a vis a vis fixed rate of 8.75% p.a.


Jun 30, 2010

(Rs. in lakhs)

2009-10 2008-09

1. Contingent Liabilities not provided for in respect of :

(a) Demands / Claims by various Government Authorities and others not acknowledged as debts:

(i) Excise Duty 488.26 396.69

(ii) Sales & Entry Tax 28.24 28.24

(iii) Others 154.77 116.69

Total 671.27 541.62

(b) (i) Guarantees given to banks against loans to cane growers 1400.00 1000.00

(ii) Against the above, the loan facilities actually availed as on the Balance Sheet date 906.75 1000.00

(c) Additional liability, if any, under clause 5A of the Sugarcane (Control) Order, 1966 for sugarcane purchases for the sugar season 2004-2005 in respect of Companys Hasanpur Sugar Unit (amount unascertainable)

2. Diminution of Rs. 216.75 lacs in the value of certain quoted investments based on the last quoted price has not been provided, as the break up value of the said shares supplemented by the market value as on 30th June 2010, of the quoted investments held by the investee Company, is much higher than the corresponding Book Value.

3. Excise Duty & Cess on sales has been reduced from sales in Profit & Loss Account and Excise Duty & Cess on increase/decrease in stock has been considered as Income/Expenses in Profit & Loss Account.

4. Pending disposal of writs/appeals by the court with regard to levy sugar prices for some years, Rs. 72.87 lacs (Rs. 72.87 lacs) (net) received as excess levy sugar price, against which bank guarantees furnished by the Company for Rs. 50.44 lacs (Rs.50.44 lacs), are in force in terms of the Court Orders, is included under the head Current Liabilities. Necessary adjustment for the above amount together with interest, if any, in this regard will be made in the accounts as and when the matter will be finally settled.

5. Pending decisions of various courts on writ petitions filed by / against the Company, no credit has been taken in the Profit and Loss Account in respect of certain realisations aggregating to Rs. 45.31 lacs in earlier years, which continue to be shown under the head "Liabilities for other Finance" in Schedule - 12. Against the above, fixed deposit receipts / bank guarantees for Rs. 44.47 lacs have been furnished by the Company.

6. In view of the interim order dated 8th September, 2008 of the Honble Supreme Court, the Company for its Seohara Sugar Unit in Uttar Pradesh has continued the provision towards Sugarcane purchases made during the year 2007-08 @ Rs. 110 per quintal as against the State Advised Price (SAP) of Rs. 125 per quintal. Pending final decision by the Honble Supreme Court in this matter, the differential price of Rs. 1891.18 lacs between SAP and the amount already provided, as stated above, has not been accounted for.

7. (a) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms as per provisions of The Payment of Gratuity Act, 1972. The Company has got an approved Gratuity Fund which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liability.

8. Assets, Liabilities and Income & Expenditure of Cinnatolliah Tea Garden have been incorporated as at and for the year ended March 31, 2010 as the financial year of the Tea Garden closes on 31st March. The net balance of payments and realizations on account of the said Tea Garden during the period from April 1, 2010 to June 30, 2010 has been shown separately under the head "Tea Department Balance" in the Balance Sheet, pending adjustments in the next years accounts.

9. The land ceiling matter under the U.P. Imposition of Land Ceiling Act, 1960 / Bihar Land Reforms (Fixation of Ceiling, Area and Acquisition of Surplus Land) Act, 1961 for acquisition of agricultural land by the Government is pending before the Honble High Courts at Allahabad and Patna and the proceedings have been stayed by the Honble Courts.

10. (a) Salaries and Wages relating to various repairs have not been charged separately to the repairs, as the amount thereof has not been demarcated.

(b) Consumption of raw materials, stores, spare parts and packing materials includes profit/loss on sale thereof.

11. Derivative instruments outstanding as on the Balance Sheet date : Currency / Interest rate swap for foreign currency loan of USD 6.66 millions (USD 9.33 millions) equivalent to Rs. 3072.84 lacs (Rs. 4301.97 lacs) @ 6 months Libor + 1.30% p.a vis a vis fixed rate of 8.75% p.a.

12. Salary & Wages include Rs. 74.41 lacs in respect of earlier years on account of increase in wages with retrospective effect from 1st October, 2008 in terms of Wage Board award/order received during the year.

13. Related Party Disclosures:

(a) Names of the related parties:

Subsidiary Company Uttar Pradesh Trading Company Ltd.

Key Management Personnel Mrs. Nandini Nopany - Chairperson cum Managing Director

Mr C.B.Patodia - Advisor Mr Sukhvir Singh - Executive President, Seohara Unit

Mr S.K.Poddar - Company Secretary

Mr B.K. Sureka - Executive President, Sidhwalia Unit

Mr R.K. Gupta - Executive President, Hasanpur Unit

Mr S.S. Binani - Executive Vice President,

Cinnatolliah Tea Garden



Relatives of Key Management Personnel Mr Chandra Shekhar Nopany - Son of Smt. Nandini Nopany Mrs. Jyotsna Poddar - Sister of Smt. Nandini Nopany

Mrs. Shobhana Bhartia - Sister of Smt. Nandini Nopany

Mr Prateek Sureka - Son of Shri B.K. Sureka

Mr Pragati Sureka - Son of Shri B.K. Sureka

Mrs. Anita Sureka - Wife of Shri B.K. Sureka

Enterprises owned or significantly The Oudh Sugar Mills Ltd. influenced by Key Management Personne Gobind Sugar Mills Ltd.

and their relatives H.T. Media Ltd.

Hargaon Investment & Trading Co. Ltd.

OSM Investment & Trading Co. Ltd.

Uttam Commercial Ltd.

Champaran Marketing Co. Ltd.

Moon Corporation Ltd..

14. Previous years figures including those given in brackets, have been regrouped and/or rearranged, wherever necessary.