Notes to Accounts of Magadh Sugar & Energy Ltd.

Mar 31, 2025

A. Measurement of fair values

The fair value of the sugarcane and other agriculture products at harvest is determined by the quantities harvested, it is valued at the rate fixed by the Bihar Government (Level 1). For biological assets, where little biological transformation has taken place since the initial cost was incurred (for example seedlings planted immediately before the balance sheet date), such biological assets are measured at cost i.e. the total expenses incurred on such plantation upto the balance sheet date (Level 3).

B. Risk management strategy related to agricultural activities

The Company is exposed to a number of risks related to its sugarcane plantations.

i. Regulatory and environmental risks

The Company has established environmental policies and procedures, aimed for compliance, with local environmental and other laws.

ii. Supply and demand risk

The Company is exposed to risks arising from fluctuations in the sale price and quantity of sugarcane produced. When possible the Company manages this risk by aligning its harvest volume to market supply and demand.

iii. Climate and other risks

The Company''s sugar cane plantations are exposed to the risk of damage from climatic changes, diseases, forest fires and other natural forces. The Company has extensive processes in place aimed at monitoring and mitigating those risks.

(a) No debt is due by directors or other officers of the Company or any of them either severally or jointly with any other person or no debt due by firms including limited liability partnerships (LLPs) or private companies respectively in which any director is a partner or a director or a member.

(b) Information about the Company''s exposure to credit risks and loss allowances related to trade receivables are disclosed in Note 43(C).

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

The Company has only one class of equity shares with face value of H10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets on winding up. The equity shareholders are entitled to receive dividend as declared by the Company from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.

(ii) Nature of security

(a) Term loans (including rupee term loans) of H22,874.97 lakhs (31 March 2024: H12,298.66 lakhs) are secured by first mortgage / charge created / to be created on entire property, plant and equipment (other than related to farm assets) of the Company, both present and future, ranking pari-passu with banks.

(b) Term loan of J3,790.36 lakhs (31 March 2024: H6,302.15 lakhs) under the scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity (SEFASM 2018 - Central) is entitled for interest subvention from the Government of India upto 6% p.a. or 50% of rate of interest charged by banks as per terms of the scheme.

(c) Cash credit borrowing including Working capital demand loan (WCDL) of J33,844.54 lakhs (31 March 2024: H44,881.25 lakhs) from banks are secured by hypothecation of all current assets of the Company ranking pari-passu amongst the various lenders and also by 3^rd charge on all the property, plant and equipment of the Company, both present and future.

(d) Cash credit borrowing including WCDL of J2,500.00 lakhs (31 March 2024: H2,500.00 lakhs) from RBL Bank is secured by subservient charge by way of hypothecation of all current assets and movable property, plant and equipment of the Company, both present and future.

(iii) The Company is filing monthly stock statement to Banks (SBI, ICICI Bank, DCB, HDFC Bank, South Indian Bank, Yes Bank,

Axis Bank and RBL Bank) for working capital facilities. The below is summary of reconciliation of quarterly statement

filed to the banks and books of accounts :

20. Lease As Lessee

The Company has lease contracts for various items of buildings (including godowns), vehicles and other equipment used in its operations. The Company''s obligations under its lease are secured by lessor''s title to the leased assets.

The Company also has certain leases of godowns and vehicles with lease term of twelve months or less and leases of office equipment with low value. The Company applies the ''short-term lease'' and '' lease of low-value assets'' recognition exemptions for these leases.

The carrying amount of right-of-use assets (Buildings) (non-cash investing activity) recognised and its movements during the year are disclosed in Note 4.

These defined benefit plans expose the Company to actuarial risks, such as interest risk and market (investment) risk.

The Company expects to contribute H59.89 lakhs to Gratuity Fund in the next year.

Inherent risk

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular, this exposes the Company, to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.

The following tables analyse present value of defined benefit obligations, fair value of defined plan assets, actuarial gain / (loss) on plan assets, expense recognised in the Statement of Profit and Loss and Other Comprehensive Income, actuarial assumptions and other information:

a) The Company presented disaggregated revenue based on the type of goods sold to customers and type of customers. Further, the Company''s sales are made within India including export through third party and revenue is recognised for goods transferred at a point in time. The Company''s performance obligations are satisfied on delivery of goods to the customer. Delivery of goods completes when the goods have been dispatched or delivered to the specific location, of the customer, as the case may be.

The Company does not have any contracts where the period between the transfer of the promised goods to the customer and payments by the customer exceeds one year and hence, there are no significant financing component included in such contracts.

The Company believes that the above disaggregation depicts the nature, amount, timing and uncertainty of revenues and cash flows effected by industry, market and other economic factors.

b) For contract balances i.e. trade receivables [Note 10] and advance from customers [Note 23].

c) The amount of H155.88 lakhs included in contract liabilities [Note 23] at 31 March 2024 has been recognised as revenue during the year ended 31 March 2025 (31 March 2024: H202.54 lakhs).

d) The amount of revenue from contracts with customers recognised in the statement of profit and loss is the contracted price.

38. Contingent Liabilities (to the extent not provided for) (a) Claims against the Company not acknowledged as debt		(H in Lakhs)
Particulars	As at 31 March 2025		As at 31 March 2024
(i) Excise duty and service tax	534.66	592.75
(ii) Sales and entry tax	92.46	92.46
(iii) Goods and service tax	205.27	108.16
(iV) Duty under state acts	159.39	321.41
(V) Others	176.93	177.34
Total *	1,168.71	1,292.12

* Notes:

(1) Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments / decisions pending with various forums / authorities.

(2) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.

(b) The land ceiling matter under Bihar Land Reforms (Fixation of Ceiling, Area and Acquisition of Surplus Land) Act, 1961 for acquisition of agriculture land by the Government is pending before the appropriate adjudicating authorities.

40. Operating Segments

A. Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments and its operating results are reviewed regularly by the Company''s Whole-Time Director (WTD) as the Company''s Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance.

B. Information about reportable segments

Information related to each reportable segment is set-out below. The Company''s WTD reviews the results of each segment on a quarterly basis. The Company''s WTD uses Earning Before Interest and Tax (EBITA) to assess the performance of the operating segments. Segment is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within same industries. Inter-segment pricing is determined on an arm''s length basis.

The Company has common property, plant and equipment for producing goods for Indian and Overseas markets. Hence, no separate figures for property, plant and equipment / additions to property, plant and equipment / depreciation and amortisation on property, plant and equipment have been furnished.

D. Major customer

One (31 March 2024: One) customer contributed 10.55% (31 March 2024: 15.47%) of the total revenue of the Company.

41. Related Party Disclosures

In accordance with the requirements of Indian Accounting Standard (Ind-AS) 24 "Related Party Disclosures", names of the related parties, related party relationships, transactions and outstanding balances, where control exist and with whom transactions have been taken placed during the reported periods are:

(ii) Post employment benefits

Post employment benefits liabilities, based on actuarial valuation, to key management personnel aggregating to H70.92 lakhs (31 March 2024: H54.11 lakhs).

C. Details of loans, investments and guarantee covered under Section 186(4) of the Companies Act, 2013

The Company has neither given any loan nor has advanced any amount either during the year ended 31 March 2025 or year ended 31 March 2024.

D. Terms and conditions of transactions with related parties

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

(ii) The amounts outstanding are unsecured and will be settled in cash and cash equivalent. Neither guarantees have been given nor received.

(iii) For the year ended 31 March 2025, the Company has not recorded any impairment of receivables relating to amounts owed by a related parties. This assessment is undertaken in each financial year through examining the financial position of the related parties and the market in which the related party operates.

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

42. Government Grants

The Company is eligible to receive various government grants by way of goods and service tax reimbursement, reimbursement of stamp duty / registration fees, capital subsidy on property, plant and equipment and interest subvention / grant on certain term loans. Accordingly, the Company has recognised these government grants in the following manner:

(a) On 25 February 2025, the Government of Bihar notified a reduction in the rate of cane commission to Zonal Development Council from 1.80% to 0.20% of cane price for the sugar season 2022-23, 2023-24 and 2024-25. Based on this notification, the reduction in cane commission liabilities provided till 31 March 2024 is reversed and accounted for as "Cane Commission Remission" during the year. The reduction in cane commission applicable on cane purchased during the year has been netted with the Cost of Raw Material Consumed.

(b) The State Government of Bihar under Industrial Investment Promotion Policy, 2014 and 2016 had announced various subsidies / incentives on industrial capital investment in Bihar. During the year, the Company has received H235.39 lakhs (31 March 2024: H110.63 lakhs) and H Nil (31 March 2024: H477.92 lakhs) as Goods and Service Tax Reimbursement and Capital Subsidy on Property, plant and equipment respectively.

(c) The Company has obtained certain term loans from banks under financial assistance schemes (SEFASM 2018 - Central). The difference between the fair value of the loans based on prevailing market interest rates and interest paid on such loans has been recognised in the Statement of Profit and Loss by netting with the related finance cost.

The management assessed that fair values of trade receivables, cash and cash equivalent, other bank balances, trade payables, investment in Government securities, loans and other financial assets and liabilities approximate their carrying amounts.

B. Measurement of fair values

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

Valuation technique level 2 - Borrowings

Discounted cash flows: The valuation model considers the present value of expected payments, discounted using a risk-adjusted discount rate. The own non-performance risk was assessed to be insignificant.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

(i) Credit risk

(ii) Liquidity risk

(iii) Market risk

Risk management framework

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, other bank balances, investments, loans and other financial assets that derive directly from its operations.

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company''s Risk Management Committee monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

The Company''s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities.

This note presents information about the Company''s exposure to each of the above risks, the Company''s objectives, policies and processes for measuring and managing risk, and the Company''s management of capital.

(i) Credit risk

Credit risk is the risk of financial loss of the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company receivables from customers and loans. The Company has no significant concentration of credit risk with any counterparty. The carrying amount of financial assets represent the maximum credit risk exposure. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Trade receivables, Loans, Claims and Subsidies / Refunds and Other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry also has an influence on credit risk assessment. Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to the customer credit risk management. The Company uses financial information and past experience to evaluate credit quality of majority of its customers. Outstanding receivables and the credit worthiness of its counter parties are periodically monitored and taken up on case to case basis. There is no material expected credit loss based on the past experience. However, the Company assesses the impairment of trade receivable on case to case basis and has accordingly created loss allowance on trade receivables.

Exposure to credit risks

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry. The Company evaluates the concentration of risk with respect to trade receivables as low, as the Company sugar sales are mostly on cash. Power and Ethanol are sold to Government entities, thereby the credit default risk is significantly mitigated.

Trade receivables are primarily unsecured and are derived from revenue earned from customers. Credit risk is managed through credit approvals, establishing credit limits and by continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. As per simplified approach, the Company makes provision of expected credit loss on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provisions at each reporting date whenever is for longer period and involves higher risk. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain.

(ii) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows.

As disclosed in Note 19, the Company has secured bank loans that contains covenant. Any future breach of covenant may require the Company to repay the loan earlier than indicated in the above table. The covenant is monitored on a regular basis by the treasury department and regularly reported to management to ensure compliance with the agreement.

The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

Exposure to liquidity risks

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments:

(iii) Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, regulatory changes, equity prices and other market changes that effect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

Foreign currency risks

All transactions of the Company are in Indian currency, consequently Company is not exposed to foreign currency risk. The Company has no outstanding foreign currency exposure or related derivative contract.

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 exposure to the risk of changes in market interest rates relates primarily to the Company''s long term and short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Regulatory and Commodity price risk

Sugar industry, being cyclical in nature, is regulated by both Central Government as well as State Government policies. The Company is exposed to the risk of price fluctuations of its raw material (Sugarcane) as well as its finished goods (Sugar). To counter the raw material risk, the Company worked with development of various cane varieties with the objective to moderate the raw material cost and increase product functionality. The risk towards finished goods (Sugar) has been moderated through the various schemes of the Central Government including but not limited to introduction of Minimum Support Price (MSP), creation of buffer stock and export of excess inventory. The Company has further mitigated this risk by well integrated business model by diversifying into cogeneration and distillation, thereby utilising its by-products.

44. Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Company''s objective when managing capital are to:

(a) to maximise shareholders value and provide benefits to other stakeholders, and

(b) maintain an optimal capital structure to reduce the cost of capital.

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.

For the purpose of the Company''s capital management, capital includes issued equity share capital and other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is disclosed in Note 45.

(a) Change in Trade Receivable Turnover Ratio is 43.28% as compared to the preceding year due to decrease in average trade receivable.

(b) Change in Net Capital Turnover Ratio is 41.18% as compared to the preceding year due to increase in average working capital.

46. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

47. Recent accounting pronouncement

There are no standards that are notified and yet to be effective as on the date.

Mar 31, 2024

3.8 Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Expected future operating losses are not provided for.

3.9 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from a past event, with the resolution of the contingency dependent on uncertain future events, or a present obligation where no outflow is possible. Major contingent liabilities are disclosed in the financial statements unless the possibility of an outflow of economic resources is remote. Contingent assets are not recognised in the financial statements but disclosed, where an inflow of economic benefit is probable.

3.10 Revenue from contract with customer

Sale of goods (excluding power)

Revenue from sale of product is recognised at the point in time when control of the goods is transferred to the customer.

At contract inception, the Company assesses the goods promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue from contracts with customers is recognized when control of goods are transferred to customers and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold i.e. the Company''s performance obligations are satisfied on delivery of goods to the customer. The timing of the transfer of control varies depending on individual terms of the sales agreements.

Revenue is measured at transaction price, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the Government.

Sale of Power

The Company''s derives its power revenue from the production and sale of electricity based on long-term Power Purchase Agreements. Revenue is recognised at the point in time upon delivery of electricity produced to the electricity grid based on the agreed tariff rate (net of discounts for prompt payment of bills). Delivery is deemed complete when control associated with ownership have been transferred to the grid as contractually agreed, compensation has been contractually established and collection of the resulting receivable is probable.

3.11 Income from Renewable Energy Certificates (RECs)

Income from Renewable Energy Certificates (RECs) is recognised at estimated realisable value on confirmation of RECs by the concerned Authorities.

3.12 Recognition of Dividend Income, Interest income or expense, Insurance claim

Dividend income

Dividend income is recognised in profit or loss on the date on which the Company''s right to receive payment is established.

Interest income

Interest income or expense is recognised using the effective interest method.

The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

Interest is recognised on time proportion basis.

Interest income is included in "Other Income" in the Statement of Profit and Loss.

Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

3.13 Expenses

All expenses are accounted for on accrual basis.

3.14 Government grants

Grants from Government are recognised at their fair value where there is reasonable assurance that the grant will be received and the Company will comply with the conditions attached thereto.

Government grants related to revenue are recognised in the Statement of Profit and Loss on a systematic and rational basis in the periods in which the Company recognises the related costs for which the grants are intended to compensate and are netted off with the related expenditure. If not related to a specific expenditure, it is taken as income and presented under "Other Operating Revenue".

Government grants received relating to property, plant and equipment and other intangible assets are deducted from the gross value of the property, plant and equipment and other intangible assets concerned in arriving at the carrying amount of the related property, plant and equipment and other intangible assets. The grant is recognised in the statement of profit or loss over the life of the related depreciable asset as a reduced

depreciation expense.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates and is being recognised in the Statement of Profit and Loss by netting with the related finance cost. The loan is subsequently measured as per the accounting policy applicable to financial liabilities.

3.15 Income tax

Income tax expense comprises of current tax and deferred tax. Current tax and deferred tax is recognised in the Statement of profit and Loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the end of the reporting period.

Current tax assets and current tax liabilities are off set only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised.

Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised / reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to off set current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

3.16 Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance. Refer Note 40 for segment information presented.

Operating segments are reported in manner consistent with the internal reporting provided to the chief operating decision maker.

The Company''s Whole-Time Director (WTD) has been identified as being the chief operating decision maker by the management of the Company.

3.17 Borrowing costs

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

3.18 Cash and cash equivalents

Cash and cash equivalents include cash in hand and at bank, short-term deposits with an original maturity of three months or less and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

3.19 Cash flow statement

Cash flows are reported using the indirect method, whereby profit or loss for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

3.20 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

3.21 Determination of fair values

Fair values have been determined for measurement and disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

i) Financial assets

Financial assets are initially measured at fair value. If the financial asset is not subsequently accounted for at fair value through profit or loss, then the initial measurement includes directly attributable transaction costs. These are measured at amortised cost or at FVTPL or at FVOCI.

Investments in equity instruments are measured at FVOCI and combination of different methodologies i.e. discounted cash flow method, comparable companies method and net assets method with different weightage has been used for fair valuations of investment in unquoted securities.

ii) Trade and other receivables

The fair values of trade and other receivables are estimated at the present value of future cash flows, discounted at the market rate of interest at the measurement date. Short-term receivables with no stated interest rate are measured at the original invoice amount if the effect of discounting is immaterial. Fair value is determined at initial recognition and, for disclosure purposes, at each annual reporting date.

iii) Financial liabilities

Financial liabilities are measured at fair value, at initial recognition and for disclosure purposes, at each annual reporting date. Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the measurement date.

A. Measurement of fair values

B. Risk management strategy related to agricultural activities

The Company is exposed to a number of risks related to its sugarcane plantations.

i. Regulatory and environmental risks

The Company has established environmental policies and procedures, aimed for compliance, with local environmental and other laws.

ii. Supply and demand risk

iii. Climate and other risks

(ii) Nature of security

(a) Term loan / Rupee term loans of H 12,298.66 lakhs (31 March 2023: H 18,800.62 lakhs) are secured by first mortgage / charge created on entire property, plant and equipment of the Company, both present and future, ranking pari-passu with ICICI Bank.

(b) Term loan of H 6,302.15 lakhs (31 March 2023: H 8,801.75 lakhs) under the scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity (SEFASM 2018 -Central) is entitled for interest subvention from the Government of India upto 6% p.a. or 50% of rate of interest charged by banks as per terms of the scheme.

(c) Cash credit borrowing including Working capital demand loan (WCDL) of H 44,881.25 lakhs (31 March 2023: H 34,725.30 lakhs) from banks are secured by hypothecation of all current assets of the Company ranking pari-passu amongst the various lenders and also by 3^rd charge on all the property, plant and equipment of the Company, both present and future.

(d) Cash credit borrowing including WCDL of H 2,500.00 lakhs (31 March 2023: Nil) from RBL Bank is secured by subservient charge by way of hypothecation of all current assets and movable property, plant and equipment of the Company, both present and future.

(iii) The Company is filing monthly stock statement to Banks (SBI, ICICI Bank, DCB, HDFC Bank, South Indian Bank, Yes

Bank, Axis Bank and RBL Bank) for working capital facilities. The below is summary of reconciliation of quarterly

statement filed to the banks and books of accounts :

20. Lease

As Lessee

The Company has lease contracts for various items of buildings (including godowns), vehicles and other equipment in its operations. The Company''s obligations under its lease are secured by lessor''s title to the leased assets.

The Company also has certain leases of godowns and vehicles with lease term of twelve months or less and ieas< office equipment with low value. The Company applies the ''short-term lease'' and '' lease of low-value assets'' recogr exemptions for these leases.

The carrying amount of right-of-use assets (Buildings) (non-cash investing activity) recognised and its movements di the year are disclosed in Note 4.

Lease liabilities is being measured by discounting the lease payments using the incremental borrowing rate i.e. 8.50% Movement of the carrying amount of lease liabilities during the year are as under:

40. Operating Segments

A. Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. ALL operating segments and its operating results are reviewed regularly by the Company''s Whole-Time Director (WTD) as the Company''s Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance.

B. Measurement of fair values

Valuation technique level 2 - Borrowings

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

(i) Credit risk

(ii) Liquidity risk

(iii) Market risk

Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

(i) Credit risk

Trade receivables, Loans, Claims and Subsidies / Refunds and Other receivables

Exposure to credit risks

(in) Market risk

Foreign currency risks

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Regulatory and Commodity price risk

Sugar industry, being cyclical in nature, is regulated by both Central Government as well as State Government policies. The Company is exposed to the risk of price fluctuations of its raw material (Sugarcane) as well as its finished goods (Sugar). To counter the raw material risk, the Company worked with development of various cane varieties with the objective to moderate the raw material cost and increase product functionality. The risk towards finished goods (Sugar) has been moderated through the various schemes of the Central Government including but not limited to introduction of Minimum Support Price (MSP), creation of buffer stock and export of excess inventory. The Company has further mitigated this risk by well integrated business model by diversifying into co-generation and distillation, thereby utilising its by-products.

44. Capital management

The Company''s objective when managing capital are to:

(a) to maximise shareholders value and provide benefits to other stakeholders, and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purpose of the Company''s capital management, capital includes issued equity share capital and other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is disclosed in Note 45.

Notes:

(a) Change in Return on Equity Ratio is 106.98% as compared to the preceding year due to increase in net profit.

(b) Change in Trade Receivable Turnover Ratio is 37.44% as compared to the preceding year due to decrease in average trade receivables.

(c) Change in Trade Payable Turnover Ratio is 34.60% as compared to the preceding year due to increase in average trade payables.

(d) Change in Net Capital Turnover Ratio is 56.43% as compared to the preceding year due to increase in working capital.

(e) Change in Net Profit Ratio is 101.51% as compared to the preceding year due to increase in net profit.

(f) Change in Return on Capital Employed is 56.62% as compared to the preceding year due to increase in profit before interest and taxes (PBIT).

47. Recent accounting pronouncement

There are no standards that are notified and yet to be effective as on the date.

As per our report of even date attached.

For B S R & Co. LLP For and on behalf of the Board of Directors

Chartered Accountants

ICAI Firm''s Registration No.: 101248W/W-100022

Seema Mohnot Chandra Mohan Chandra Shekhar Nopany

(Partner) Whole-time Director Chairman

Membership No.: 060715 DIN: 07760264 DIN: 00014587

Place: Kolkata Subramanian Sathyamurthy Sudershan Bajaj

Date: 14 May 2024 Company Secretary Chief Financial Officer

FCS - 4974

Mar 31, 2023

a) The amount of borrowing costs H 365.07 lakhs was capitalised during the previous year. The annual rate i.e. the effective rate of interest used to determine the amount of borrowing costs eligible for capitalisation was in the range of 7.37% to 8.65% for the borrowings other than specific and 5.04% (post-subvention) for the specific borrowing.

b) Pre-operative and trial run expenses H 482.49 lakhs, includes salary and wages of H 103.32 lakhs, power and fuel of H 116.04 lakhs and other expenses of H 263.13 lakhs, was capitalised during the previous year.

A. Measurement of fair values

The fair value of the sugarcane and other agriculture products at harvest is determined by the quantities harvested, it is valued at the rate fixed through Association (Level 1). For biological assets, where little biological transformation has taken place since the initial cost was incurred (for example seedlings planted immediately before the balance sheet date), such biological assets are measured at cost i.e. the total expenses incurred on such plantation upto the balance sheet date (Level 3).

B. Risk management strategy related to agricultural activities

The Company is exposed to a number of risks related to its sugarcane plantations.

i. Regulatory and environmental risks

The Company has established environmental policies and procedures, aimed for compliance, with local environmental and other laws.

ii. Supply and demand risk

iii. Climate and other risks

(b) Information about the Company''s exposure to credit risks and loss allowances related to trade receivables are disclosed in Note 44(C).

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

(ii) Nature of security

(a) Term loan / Rupee term loans of H18,800.62 lakhs (31st March, 2022: H18,450.50 lakhs) are secured by first mortgage / charge created on entire property, plant and equipment of the Company, both present and future, ranking pari-passu amongst the various lenders.

(b) Term loan of H8,801.75 lakhs (31st March, 2022: H10,022.87 lakhs) under the scheme for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity (SEFASM 2018 - Central) is entitled for interest subvention from the Government of India upto 6% p.a. or 50% of rate of interest charged by banks as per terms of the scheme.

(c) Cash credit borrowing including Working capital demand loan (WCDL) from bank are secured by hypothecation of all current assets of the Company ranking pari-passu amongst the various lenders and also by 3rd charge created / to be created on all the property, plant and equipment of the Company, both present and future.

The above differences are on account of certain inventories which do not form part of stock statements submitted with banks as per the terms and conditions and difference in valuations due to different valuation method followed in stock statements and books of accounts.

21. Lease As Lessee

The carrying amount of right-of-use assets (Buildings) recognised and its movements during the year are disclosed in Note 4.

Defined benefits - Gratuity Plan

The Company has a defined benefit gratuity plan. Every employee who has completed continuously 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 approved gratuity fund of erstwhile companies in respect of transferred business undertakings has been transferred to the Company and which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liabilities.

These defined benefit plans expose the Company to actuarial risks, such as interest risk and market (investment) risk.

The Company expects to contribute H224.50 lakhs to Gratuity Fund in the next year.

Inherent risk

The Company believes that the above disaggregation depicts the nature, amount, timing and uncertainty of revenues and cash flows effected by industry, market and other economic factors.

b) For contract balances i.e. trade receivables [Note 11] and advance from customers [Note 24].

c) The amount of H170.11 lakhs included in contract liabilities [Note 24] at 31st March, 2022 has been recognised as revenue during the year ended 31st March, 2023 (31st March 2022: H2,052.63 lakhs).

d) The amount of revenue from contracts with customers recognised in the statement of profit and loss is the contracted price.

41. Operating Segments

A. Basis for segmentation

The Company has three reportable segments as described below, which are the Company''s strategic business:

B. Information about reportable segments

C. Geographical information

The Company primarily operates in India only and the analysis of geographical segments demarcated into its Indian and Overseas Operations are as under:

* including export through third parties.

D. Major customer

Two (31st March, 2022: One) customers contributed 27.30% (31st March, 2022: 13.68%) of the total revenue of the Company.

* excluding H15.17 lakhs (31st March, 2022: H7.96 lakhs) value of perquisites determined under the provisions of Income Tax Act, 1961.

(ii) Post employment benefits

Short term employee benefits as disclosed in point (i) above does not include the provisions made for gratuity and leave benefits H25.16 lakhs (31st March, 2022: H23.45 lakhs) and H23.93 lakhs (31st March, 2022: H21.23 lakhs) respectively, as they are determined on an actuarial basis for the Company as a whole.

C. Details of loans, investments and guarantee covered under Section 186(4) of the Companies Act, 2013

The Company has neither given any loan nor has advanced any amount either during the year ended 31st March, 2023 or year ended 31st March, 2022.

D. Terms and conditions of transactions with related parties

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

(ii) The amounts outstanding are unsecured and will be settled in cash and cash equivalent. Neither guarantees have been given nor received.

(iii) For the year ended 31st March, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by a related parties. This assessment is undertaken in each financial year through examining the financial position of the related parties and the market in which the related party operates.

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

(a) The Central Government, pursuant to notification dated 29th December, 2020 issued by Ministry of Consumer Affairs, Food and Public Distribution, had notified a Scheme for a lump sum financial assistance of H6,000 / H4,000 per MT for expenses on export of sugar limited to Maximum Admissible Export Quantity (MAEQ) of sugar mills for the sugar season 2020-21. Such financial assistance was subject to fulfilment of certain eligibility conditions as specified in the said notification. The Company had fulfilled the conditions as stipulated in the said scheme and accordingly, the subsidy of H569.96 lakhs had been received during the previous year and disclosed as "Subsidy towards Export Quota (net)" under the head Other Operating Revenue.

(b) The State Government of Bihar under Industrial Promotion Policy, 2014 had announced an incentive on higher recovery of sugar over the recovery in base years. The Company was entitled for Production Incentive of H172.00 lakhs for the sugar season 2021-22 during the previous year.

(d) The State Government of Bihar under Industrial Investment Promotion Policy, 2016 had announced incentives on industrial capital investment in Bihar. The Company has received H37.68 lakhs as reimbursement of stamp duty / registration fees on purchase of freehold land.

B. Measurement of fair values

Valuation technique level2 - Borrowings

Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

(i) Credit risk

Trade receivables and Loans

Exposure to credit risks

(ii) Liquidity risk

As disclosed in Note 20, the Company has secured bank loans that contains covenant. Any future breach of covenant may require the Company to repay the loan earlier than indicated in the above table. The covenant is monitored on a regular basis by the treasury department and regularly reported to management to ensure compliance with the agreement.

The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

(iii) Market risk

Foreign currency risks

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Cash flow sensitivity analysis

Fixed rate instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of sensitive analysis.

Regulatory and Commodity price risk

Sugar industry, being cyclical in nature, is regulated by both Central Government as well as State Government policies. The Company is exposed to the risk of price fluctuations of its raw material (Sugarcane) as well as its finished goods (Sugar). To counter the raw material risk, the Company worked with development of various cane varieties with the objective to moderate the raw material cost and increase product functionality. The risk towards finished goods (Sugar) has been moderated through the various schemes of the Central Government including but not limited to introduction of Minimum Support Price (MSP), creation of buffer stock and export of excess inventory. The Company has further mitigated this risk by well integrated business model by diversifying into co-generation and distillation, thereby utilising its by-products.

45. Capital management

The Company''s objective when managing capital are to:

(a) to maximise shareholders value and provide benefits to other stakeholders, and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purpose of the Company''s capital management, capital includes issued equity share capital and other equity reserves attributable to the equity holders.

(a) Change in Trade Receivable Turnover Ratio is 26.07% as compared to the preceding year due to increase in trade receivable towards sale of ethanol to oil companies under credit period.

(b) Change in Trade Payable Turnover Ratio is 94.07% as compared to the preceding year due to higher cane price outstanding as higher crushing season.

(c) Change in Net Capital Turnover Ratio is 245.85% as compared to the preceding year due to higher working capital on account of increase in inventory levels because of longer sugarcane crushing period.

47. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Mar 31, 2018

1. Reporting entity

Magadh Sugar & Energy Limited is a public company domiciled and headquartered in India, having its registered office situated at Hargaon, District Sitapur in the state of Uttar Pradesh. The Company was originally incorporated on 19 March 2015 under the provisions of Indian Companies Act, 2013, as a subsidiary of Upper Ganges Sugar and Industries Limited (UGSIL). Consequent to a Composite Scheme of Arrangement approved by the National Company Law Tribunal (NCLT) on 2 March 2017, and its filing with the Registrar of Companies, Kanpur on 23 March 2017, the business undertakings located at Sidhwalia, District Gopalganj and at Hasanpur, District Samastipur in the state of Bihar of UGSIL had been merged with the Company from the appointed date i.e. 1 April 2015. Also the business undertaking located at Narkatiaganj, District West Champaran in the State of Bihar of The Oudh Sugar Mills Limited (OSML) was first transferred to Vaishali Sugar & Energy Limited (VSEL) via slump sale and was subsequently merged with the Company from the appointed date i.e. 1 April 2015. Its shares are listed on National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Calcutta Stock Exchange (CSE) with effect from 28 July 2017.

The Company is primarily engaged in the manufacture and sale of sugar and its By-products (Molasses and Bagasse), Spirits including Ethanol and Power. The Company has operations in India.

2. Basis of preparation

(a) Statement of compliance

These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015, as amended, notified under Section 133 of the Companies Act, 2013 (''Act'') and other relevant provisions of the Act.

The financial statements upto and for the year ended 31 March 2017 were prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company had prepared the financial statements to comply in all material respects with the Accounting Standards notified under Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016 on an accrual basis under the historical cost convention after giving the impact of Scheme of Arrangement as detailed in Note 50(C).

As these are the Company''s first financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101 First-time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 50(C).

The financial statements are authorised for issue by the Board of Directors of the Company at their meeting held on 15 May 2018.

Details of the Company''s accounting policies are included in Note 3.

(b) Functional and presentation currency

These financial statements are presented in Indian Rupees (''), which is also the Company''s functional currency. All amounts have been rounded off to the nearest lakhs, unless otherwise indicated.

(c) Basis of measurement

The financial statements have been prepared on historical cost convention on the accrual basis, except for the following items:

Fair value is the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

(d) Use of estimates and judgments

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the financial statements for the every period ended is included in the following notes:

- Note 4 and 6 - Useful life and residual value of property, plant and equipment and other intangible assets;

- Note 9 - Determining the fair values of biological assets other than bearer plants on the basis of significant unobservable inputs;

- Notes 23 and 38 - Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources;

- Note 24 - Recognition of deferred tax assets: availability of future taxable profit against which carried forward tax losses can be used;

- Note 42 - Measurement of defined benefit obligations: key actuarial assumptions;

- Note 48 - Impairment of financial assets: key assumptions used in estimating recoverable cash flows.

(e) Measurement of fair values

A number of the Company''s accounting policies and disclosures require the measurement of fair values, for financial assets and financial liabilities.

The Company has an established control framework with respect to the measurement of fair values. The management has overall responsibility for overseeing all significant fair value measurements and it regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

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

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in Note 2(c).

(a) Title deeds of freehold are in the name of erstwhile OSML and UGSIL, which are yet to be transferred in the Company''s name.

(b) Includes Rs. 6.78 lakhs (31 March 2017: Rs. 3.93 lakhs) in relation to biological assets other than bearer plants.

(a) The write-down of inventories to net realisable value during the year amounted to Rs. 4,552.82 lakhs (31 March 2017: Rs. Nil; 1 April 2016: Rs. Nil). These are recognised as expenses during the respective period and included in changes in inventories of finished goods and work in progress.

(b) Inventories are hypothecated / pledged against borrowings [Note 20].

A. Measurement of fair values

The fair value of the sugarcane and other agriculture products at harvest is determined by the quantities harvested, it is valued at the rate fixed through Association (Level 1). The fair value of the harvested sugarcane is the cost of the raw material used in the production of sugar (including captive consumption). For biological assets, where little biological transformation has taken place since the initial cost was incurred (for example seedlings planted immediately before the balance sheet date), such biological assets are measured at cost i.e. the total expenses incurred on such plantation upto the balance sheet date (Level 3).

B. Risk management strategy related to agricultural activities

The Company is exposed to a number of risks related to its sugarcane plantations.

i. Regulatory and environmental risks

The Company has established environmental policies and procedures, aimed for compliance, with local environmental and other laws.

ii. Supply and demand risk

iii. Climate and other risks

(a) No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person. Further no trade or other receivables are due from firms or private companies respectively in which any director is a partner, a director or a member.

(b) Information about the Company''s exposure to credit risks and loss allowances related to trade receivables are disclosed in Note 48(C).

* includes Rs. 10.00 lakhs pertaining to VSEL transferred by virtue of the Scheme [Note 50(C)(I)].

** issued pursuant to the Scheme [Note 50(C)(I)].

*** after considering cancellation of 50,000 shares of Rs. 10 each pursuant to the Scheme [Note 50(C)(II)].

11,50,000 12% Non-convertible cumulative redeemable preference shares of Rs. 100 each issued are classified as financial liability. [Note 20]

(b) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares with par value of Rs. 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets on winding up. The equity shareholders are entitled to receive dividend as declared by the Company from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts, in proportion to the number of equity shares held.

Note: As the Company was incorporated on 19 March 2015, disclosure of number of shares issued for consideration other than cash for the year ended 31 March 2014 is not applicable and hence not disclosed.

The description, nature and purpose of each reserve within equity are as follows:

(a) Capital Reserve

The difference between the net fair / book value of assets and liabilities of the sugar business undertakings acquired and shares issued to the shareholders of VSEL and UGSIL under the Scheme had been credited to Capital Reserve [Note 50(C)(IV)].

(b) Capital Redemption Reserve

The Company had created Capital Redemption Reserve aggregating to Rs. 1,150 lakhs on Non-convertible cumulative redeemable preference shares in accordance with the Companies Act, 2013.

The Storage fund for molasses which had been earmarked in the earlier years as per the relevant provisions of the State laws.

After the reporting date, the following dividends (excluding dividend distribution tax) were proposed by the board of directors subject to the approval at the annual general meeting; the dividends have not been recognised as liabilities. Dividends would attract dividend distribution tax when declared or paid.

A. Nature of Security and Terms of repayment

(i) Term Loans

(a) Term loan from a bank under corporate loan scheme, carry interest in the range of 11.35 % to 11.60 % p.a. and is repayable in 20 quarterly instalments by June 2020. This loan is secured by first mortgage / charge created / to be created on all the fixed assets, present and future, of the Company, ranking pari-passu amongst the various lenders.

(b) Rupee Term Loans from a bank, carry interest @ 10.20% p.a. and are repayable in 14 / 28 quarterly installments starting from September, 2018 and ending by June, 2025. These loans are secured by first mortgage / charge created / to be created on entire fixed assets, present and future, of the Company, ranking pari-passu amongst the various lenders.

The same is further secured by pledge of 30 lakhs shares of Sutlej Textiles & Industries Ltd. and 12.63 lakhs shares of Chambal Fertilisers & Chemicals Ltd. held by a promoter company.

(c) Term loans from banks under Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU 2014) carry interest @ 12 % p.a. and are repayable in monthly / quarterly installments by June, 2019. The Company is entitled to interest subvention from the Government of India upto 12% as per terms of the Scheme and the same will be directly reimbursed to banks by the Department of Food & Public

Distribution and hence, no liability towards interest has been provided for in these financial statements. The above loans are secured by first pari-passu charge created / to be created on all the fixed assets, both present and future, of the Company, ranking pari-passu amongst the various lenders.

(d) Term loans from a bank under Financial Assistance Scheme of the State Government of Bihar (SOFT Loan 2015), carry interest in the range of 12.35 % to 12.80% p.a. and repayable in 20 equal quarterly instalments by 31st March, 2021. The Company is entitled to interest subvention from the State Government of Bihar upto 10% p.a. 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 for in these financial statements. The above loans are secured by first mortgage /charge created / to be created on all the fixed assets, both present and future, of the Company, ranking pari-passu amongst the various lenders.

(e) Term loan from the Sugar Development Fund (SDF), carry interest @ 4 % p.a. and is secured by 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). The SDF loan is repayable in 5 equal yearly instalments ending on September 2019.

(f) Medium Term Loan (Unsecured) from a bank, carry interest at the rate of 9.10% p.a. and is repayable in 3 (three) quarterly instalments from October, 2018 to April, 2019.

(ii) Cash credit including working capital demand loan

(a) Cash Credit from Banks, other than from DCB Bank Ltd., is secured by hypothecation of all current assets of Sugar units of the Company ranking pari-passu amongst the various lenders and also by 2nd / 3rd charge created/ to be created on all the fixed assets of the Company.

(b) Cash Credit Rs. 2,000 lakhs and Commodity Finance Rs. 4,500 lakhs from DCB Bank Ltd, are secured by hypothecation of current assets of Sugar unit at Narkatiaganj and pledge of the stock of sugar pertaining to Sugar unit at Sidhwalia, respectively.

(c) Cash Credit borrowings including Working Capital Demand Loan (WCDL) carry interest in the range of 8.65% to 11.65% p.a. However, Working Capital Demand Loans are repayable within a period of 3 (three) months.

(d) Short term loan (unsecured) from a bank carrying interest @ 8.90% p.a. and is repayable within a period of 3 (three) months by April, 2018.

B. Non-convertible Cumulative Redeemable Preference Shares

(i) Rights, preferences and restrictions attached to 12% Non-convertible cumulative redeemable preference shares of Rs. 100 each

The Non-convertible Cumulative Redeemable Preference Shares (NCCRPS) of Rs. 100 each carries dividend @ 12% per annum. NCCRPS were redeemable at par on 24 September 2019 being five years from the date of the original allotment i.e. 25 September 2014 with a right vested to the Board of Directors to redeem it earlier. The same has been redeemed during the year.

(a) 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.

3. Capital and Other Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 245.00 lakhs (31 March 2017: Rs.77.75 lakhs, 1 April 2016: Rs.340.92 lakhs).

* Notes:

a. Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments / decisions pending with various forums / authorities.

b. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position. Also, the Company does not expect any reimbursements in respect of the above contingent liabilities.

(c) The land ceiling matter under 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.

4. The Company has lodged / in the process of filing claims, for the losses incurred due to flood during the year at one of the units. Pending finalisation / acceptance of the claim by the Insurance Company, no accounting adjustment for such claims amounting to Rs.477.00 lakhs net of salvage value recovered, has been made in the books of account as a matter of prudence.

5. The Central Government, pursuant to notification dated May 9, 2018 issued by Ministry of Consumer Affairs, Food and Public Distribution, has notified a Scheme for financial assistance of Rs.5.50 per quintal of actual sugarcane crushed during sugar season 2017-18 or the proportionate inter-se allocation of 28,000 lakhs quintals of sugarcane to be crushed (for sugar season 2017-18) on the basis of their average sugar production of last two sugar seasons and current season (upto February, 2018), whichever is lower. Such financial assistance is subject to fulfillment of certain eligibility conditions as specified therein. Pending compliance of such conditions, no accounting adjustment in this regard has been made in the books of account.

6. 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 are no escalation clause in the lease agreement. There are no restrictions imposed in lease agreements. There are no subleases. The leases are cancellable.

7. Assets and Liabilities relating to employee defined benefits

Defined benefits - Gratuity Plan

The Company has a defined benefit gratuity plan. Every employee who has completed continuously 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 approved gratuity fund of erstwhile companies (UGSIL & OSML) in respect of transferred business undertakings has been transferred to the Company, which has taken an insurance policy with Life Insurance Corporation of India (LIC) to cover the gratuity liabilities.

These defined benefit plans expose the Company to actuarial risks, such as currency risk, interest risk and market (investment) risk.

The Company expects to contribute Rs.242.67 lakhs to Gratuity Fund in the next year.

Inherent risk

8. Operating Segments

A. Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments and its operating results are reviewed regularly by Whole-time Director (WTD) of the Company as the Company''s Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segments and assess their performance.

The Company has three reportable segments as described below, which are the Company''s strategic business:

Reportable segments Operations

Sugar Manufacture and sale of sugar, molasses and bagasse

Distillery Manufacture and sale of industrial spirits (including ethanol), fusel

oil and bio-compost

Co-generation Generation and transmission of power

B. Information about reportable segments

C. Geographical information

The Company at present, operates in India only and therefore the analysis of geographical segments is not applicable to the Company.

D. Major customer

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

C. Details of loans, investments and guarantee covered under Section 186(4) of the Companies Act, 2013

The Company has neither given any loan nor has advanced any amount either during the year ended 31 March 2018 or year ended 31 March 2017.

D. Terms and conditions of transactions with related parties

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

b. The amounts outstanding are unsecured and will be settled in cash and cash equivalent. No guarantees have been given or received.

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

9. Government Grant

The Company is eligible to receive various government grants by way of Remissions of Sugarcane Commission to Zonal Development Council and Sugarcane Purchase tax, Capital Subsidies on acquisition of Property, plant and equipment, Production Subsidy and Interest subvention on certain term loans. Accordingly, the Company has recognised these government grants in the following manner:

Notes :

(a) The State Government of Bihar has granted Remission of Sugarcane Commission by reducing from 1.80% to 0.2.% of Sugarcane Purchase Price for the sugar season 2017-18 and 2016-17. In accordance with the accounting policy, the above reduction in sugarcane commission to Zonal Development Council applicable on sugarcane purchased during the year has been netted with the Cost of Material Consumed.

(b) The State Government of Bihar has exempted Purchase Tax @ '' 1.75 per quintal of Sugarcane Purchased for the sugar season 2017-18 and 2016-17. In accordance with the accounting policy, the above exemption in purchase tax applicable on sugarcane purchased during the year has been netted with the Cost of Material Consumed.

(c) It consists of Capital Subsidies received during the year 2015-16 and 2017-18 from the State Government of Bihar on acquisition of property, plant and equipment. It is being recognised proportionately in the Statement of Profit and Loss on the basis of useful life of related property, plant and equipment. Deferred Income on this Government Grant is being shown as per accounting policy as other liabilities.

(d) The State Government of Bihar under Industrial Promotion Policy, 2006 has allowed reimbursement of Excise duty on Sale of excess production of sugar over the average production in the base year. Accordingly, the Company has received / accounted for the excise duty reimbursement for the sugar season 2014-15, 2015-16 and 2016-17.

(e) The Company has obtained certain term loans from banks under financial assistance schemes (SEFASU 2014, SOFT 2015 - Central and SOFT 2015 - Bihar) and Sugar Development Fund at below market rate of interest. The difference between the fair value of the loans based on prevailing market interest rates and interest paid on such loans has been recognised in the Statement of Profit and Loss by netting with the related finance cost.

10. Exceptional items represents excise duty re-imbursement as Production Subsidy pertaining to earlier years under Industrial Promotion Policy, 2006 of the State Government of Bihar.

11. Financial instruments - fair values and risk management

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities:

The management assessed that trade receivables, cash and cash equivalent, other bank balances, trade payable, cash credits including working capital loan, inter corporate deposits and other financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.

B. Measurement of fair values

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

(i) Credit risk

(ii) Liquidity risk

(iii) Market risk

Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal auditor undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

(i) Credit risk

Credit risk is the risk of financial loss of the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally form the Company receivables from customers and loans. The Company has no significant concentration of credit risk with any counterparty. The carrying amount of financial assets represent the maximum credit risk exposure. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.

Trade receivables

Exposure to credit risks

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions representing large number of minor receivables operating in independent markets.

Trade receivables are primarily unsecured and are derived from revenue earned from customers. Credit risk is managed through credit approvals, establishing credit limits and by continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provisions at each reporting date whenever is for longer period and involves higher risk. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the credit loss allowance for trade receivables.

(ii) Liquidity risk

The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

(iii) Market risk

Foreign exchange risks

Interest rate risk

The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Currently the Company''s borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.

Cash flow sensitivity analysis

Fixed rate instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of sensitive analysis.

Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date, have been outstanding for the entire reporting period and all other variables.

Equity risk

The Company''s quoted equity instruments are susceptible to market price risk arising from uncertainties about future values of the investment securities. The reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The senior management reviews and approves all equity investment decisions.

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. Spirit 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.

Commodity price risk

The Company is exposed to the risk of price fluctuations of raw material as well as finished goods. Sugar industry being cyclical in nature, realisations get adversely affected during downturn. Higher cane price or higher production than the demand ultimately affect profitability. The Company has mitigated this risk by well integrated business model by diversifying into co-generation and distillation, thereby utilizing the by-products. The Company manages its commodity price risk by maintaining adequate inventory of raw materials and finished goods considering future price movement.

Inventory sensitivity analysis (raw material, work-in-progress and finished goods)

A reasonably possible change of 10% in prices of inventory at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

12. Capital management

The Company''s objective when managing capital are to:

(a) to maximise shareholders value and provide benefits to other stakeholders, and

(b) maintain an optimal capital structure to reduce the cost of capital.

For the purpose of the Company''s capital management, capital includes issued equity share capital and other equity reserves attributable to the equity holders.

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

13. Explanation of transition to Ind AS

As stated in Note 2(a), the Company has prepared its first financial statements in accordance with Ind AS. For the year ended 31 March 2017, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2014 read with the Companies (Accounting Standards) Amendment Rules, 2016 notified under Section 133 of the Act and other relevant provisions of the Act (''previous GAAP'').

The accounting policies set out in note 3 have been applied in preparing the financial statements for the year ended 31 March 2018 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transition i.e. 1 April 2016.

In preparing its Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions

In preparing the financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

A. Optional exemptions availed

(a) Property, plant and equipment and intangible assets

As per Ind AS 101 an entity may elect to:

(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date

(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of revaluation, provided the revaluation was, at the date of revaluation, broadly comparable to:

- fair value;

- or cost or depreciated cost under Ind AS adjusted to reflect.

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an active market).

(iii) use carrying values of property, plant and equipment and intangible assets as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets also. There is no decommissioning liabilities to be incurred by the Company relating to property, plant and equipment.

(b) Determining whether an arrangement contains a lease

Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement).

The Company has elected to avail of above exemption.

(d) Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated, accordingly Company has elected not to apply Ind-AS 103 on the scheme of arrangement, the effective date of which was 1 April 2015 [Note 1].

(e) Fair value measurement of financial assets or liabilities at initial recognition

The Company has applied the requirements of Ind AS 109, âFinancial Instruments: Recognition and Measurement''; wherever applicable.

B. Mandatory exceptions

(a) Estimates

As per Ind AS 101, an entity''s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity''s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error.

However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company''s estimates under Ind AS are consistent with the above requirement.

(b) Derecognition of financial assets and liabilities

As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS. However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the derecognition principles of Ind AS 109 retrospectively as reliable information was available at the time of initially accounting for these transactions.

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

*Represents effect of composite scheme of arrangement approved by National Company Law Tribunal from the appointed date i.e. 1st April 2015 (Refer Note 1) including impact of operation for the year 2015-16 and the relevant impacts are as under: (Contd.)

I. Equity Share Capital Suspense

The Company has issued the following shares to the shareholders of VSEL and UGSIL:

i) 10,61,539 equity shares of Rs.10 each to the shareholders of VSEL (i.e. OSML) aggregating Rs.106.16 lakhs, in the ratio of 276 equity shares of face value of Rs.10 each of the Company for every 13 equity shares of face value of Rs.10 each held in VSEL, and,

ii) 90,03,911 equity shares of Rs.10 each to the shareholders of UGSIL aggregating Rs.900.39 lakhs, in the ratio of 88 equity shares of face value of Rs.10 each of the Company for every 113 equity shares of face value of Rs.10 each held in UGSIL, and,

iii) 11,50,000 fully paid up 12% Non-Convertible Cumulative Redeemable Preference Shares (NCCRPS) of Rs.100 each to the shareholders of UGSIL aggregating Rs.1,150 lakhs in lieu of each original shares earlier issued by UGSIL.

Note: Rs.10.00 lakhs has been added to the authorised share capital from VSEL by virtue of the scheme.

* Pending allotment, these have been shown as share capital suspense in the Balance sheet as at 1 April 2016 and the same have been subsequently allotted on 30 March 2017.

II. Equity Share Capital

50,000 equity shares of Rs.10 each of the Company held by UGSIL stand cancelled and has been consequently credited to Capital Reserve.

IV. Capital Reserve (included in other equity above)

i) Rs.5.00 lakhs has been credited to Capital Reserve towards cancellation of 50,000 equity shares of Rs.10 each of the Company held by UGSIL pursuant to the scheme of arrangement.

ii) The difference of Rs.36,892.75 lakhs between the Net fair / book value of assets and liabilities of the sugar business undertakings and shares issued to the shareholders of VSEL and UGSIL has been credited to Capital Reserve.

Note :

The Previous GAAP figures as on 1 April 2016 and effect of scheme of arrangement have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.

* The Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.

E. There were no significant reconciliation items between cash flows prepared under previous GAAP and those prepared under Ind AS.

F. Notes to the reconciliations of equity as at 1 April 2016 and 31 March 2017 and total comprehensive income for the year ended 31 March 2017

(a) Property, Plant and Equipment

Under the previous GAAP, the Company has deducted the amount of grant from the cost of the fixed assets. As a consequence to recognise the amount of unamortised deferred income as at the date of transition in accordance with paragraph 10 of Ind AS 101 relating to the period subsequent to the transition date, the corresponding amount should be made to the carrying amount of Property, Plant & Equipment (PPE) (net of cumulative depreciation impact) and retained earnings, respectively, as the grant is directly linked to PPE. Accordingly, adjustment to PPE is consequential and hence the same needs to be adjusted to the value of PPE.

(b) 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 the Statement of Profit and Loss.

Based on Ind AS 109, financial liabilities in the form of borrowings have been accounted at amortised cost using the effective interest rate method.

(d) Excise duty

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense. This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017. The total comprehensive income for the year ended and equity as at 31 March 2017 has remained unchanged.

(e) Actuarial gain and loss

Under Ind AS, all actuarial gains and losses are recognised in other comprehensive income. Under previous GAAP the Company recognised actuarial gains and losses including income tax effect thereon in profit or loss. However, this has no impact on the total comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.

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

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