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Notes to Accounts of Shree Renuka Sugars Ltd.

Mar 31, 2023

A. Assets under construction :

Capital work in progress as at 31^st March 2023 comprises of expenditure incurred for construction of building and plant and machinery pertaining to ethanol expansion project at one plant of the Company of INR 970.34 million and this project is expected to be completed by 30^th September 2023.

The other costs comprises expenditure incurred for construction of plant and machinery and building including material procured for multiple projects at other plants.

B. Capitalisation of borrowing cost :

During the current year, the Company has capitalized borrowing costs related to ethanol expansion projects being undertaken at two manufacturing units of the Company, i.e., Athani and Munoli.

The above-mentioned capital expansion is financed by Bank. The amount of borrowing cost capitalised during the year is INR 187.30 million (31^st March 2022: INR 41.17 million). The rate used to determine amount of borrowing costs eligible for capitalisation is 4.44% (31^st March 2022: 4.33%), which is the EIR of those specific borrowings.

C. Revaluation of land, buildings and plant, machinery and equipment :

During the previous year ended 31^st March 2022, the Company had appointed a registered independent valuer who has relevant experience for valuation of property, plant and equipment and is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The valuer was appointed to determine the fair value of freehold land, building, plant and machineries and leasehold land (forming part of right of use assets). As an outcome of this process, the Company had recognised decrease in the gross block of freehold land of INR 47.35 million and leasehold land included under right of use assets of INR 58.71 million and increase in building of INR 2,036.10 million and plant and machineries of INR 1,743.72 million. The Company recognised this increase within the revaluation reserve and statement of other comprehensive income during the previous year.

The fair values were determined after considering physical condition of the asset, technical usability / capacity, salvage value, quotes from independent vendors. The fair value of land was determined using market approach and building, plant, machinery and equipment using Depreciated Replacement Cost (DRC). The DRC was derived from the Gross Current Reproduction / Replacement Cost (GCRC) which is reduced by considering depreciation. The fair value measurement was classified under level 3 of the fair value hierarchy.

D. Impairment assessment of CGU :

As per the requirements of Ind AS 36, the Company tests at the end of every reporting period, whether there is any indication that the property, plant and equipment may be impaired. If any such indication exists, the Company estimates the recoverable amount of the property, plant and equipment. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. There were no indicators during the year ended 31^st March 2023.

Note 5 (a): Based on the request received from KBK Chem-Engineering Private Limited (âKBK''), a wholly owned subsidiary of the Company and approval of the Board of Directors of SRSL, loan given to KBK was partially converted into equity shares of the subsidiary. KBK issued 230,628 shares of INR 3,252/share (at a premium of INR 3,152/share), on conversion loan of INR 750 million into equity. The loan was converted into equity share capital based on the valuation report of KBK received by the Company from a registered valuer for the year ended 31^st March 2022. Since the value of investment after conversion of loan exceeded the fair value of investment of KBK, as certified by the valuer, management recorded an impairment provision of INR 750 million on the value of investment. Also, the impairment recognized in earlier years on loan balance converted into equity of INR 750 million was reversed on conversion of the loan. Thus, the provision for impairment of investment of INR 750 million and reversal of provision for doubtful loan receivable of INR 750 million, recorded in the current period had a net impact of INR Nil on the Statement of Profit and Loss and thus, were presented as net off each other in the Statement of Profit and Loss.

Note 5 (b): Investment in Gokak Sugars Limited is carried at cost in financial statements. Wherever indicators of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. There were no indicators of impairment identified during the year ended 31^st March 2023 and 31^st March 2022, pertaining to the Company''s investment in Gokak Sugars Limited.

Note 5 (c): In respect of investments made in Monica Trading Private Limited (MTPL), the Company had not identified any indicators of impairment in the current year. In the previous year ended 31^st March 2022, the Company had recognised an impairment of INR 2.90 million in the statement of profit and loss pertaining to this investment on identification of indicators of impairment.

Note 5 (d): The Board of Directors, at its meeting held on 24^th May 2022, approved the Scheme of Amalgamation of three wholly owned subsidiaries of the Company, namely, Monica Trading Private Limited (âMTPL''), Shree Renuka Agri Ventures Limited (âSRAVL'') and Shree Renuka Tunaport Private Limited (âSRTPL'') (referred to as âscheme of merger"), with the Company. The scheme for merger was filed with the Stock Exchanges on 01^st August 2022. The Company then filed an application with National Company Law Tribunal, Mumbai Bench for merger of MTPL and National Company Law Tribunal, Bengaluru Bench for merger of SRAVL and SRTPL with the Company.

The Official Liquidator has completed its audit of the records of MTPL and final reports of the Registrar of Companies and the Regional Director are awaited. In respect of applications made to NCLT, Bengaluru Bench, the Company is in the process of sending notices to creditors of SRAVL & SRTPL as per directions received from the NCLT.

Post regulatory and other necessary approvals, the merger would be accounted by applying the principles of Appendix C of Ind AS 103 - âBusiness combinations of entities under common control'' using pooling of interest method.

Deferred tax assets are recognised for unused tax Losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits.

The Company has unabsorbed depreciation of INR 16,122.20 million (31^st March 2022: INR 15,592.72 million), unabsorbed tax losses of INR 5,555.59 million (31^st March 2022: INR 5,555.59 million) on which deferred tax asset has been created. The unabsorbed depreciation can be carried forward for indefinite period, whereas the unabsorbed business losses can be carried forward for 8 years. Accordingly, the deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

During the year, the Company has recognised impairment allowance on 12-month expected credit loss model amounting to INR 3.47 million (31^st March 2022: INR Nil). Also during the year, the Company has recognised impairment allowance on lifetime expected credit loss model amounting to INR Nil (31^st March 2022: INR 43.63 million).

No trade or other receivables are due from directors or other officers of the company either severally or jointly with any other person. Trade or other receivables due from firms or private companies in which any director is a partner or a director or a member is mentioned in note 41(C).

Trade receivables are non-interest bearing and are generally on terms of 7 to 60 days.

Terms/rights attached to equity shares

The Company has only one class of equity shares having face value of INR 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend if any in Indian rupees.

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

The Company has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and debentures) Rules, 2014 (as amended), require the Company to create DRR out of profits of the Company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures issued over the life of debentures.

Equity Contribution from Parents :

During the year, Company had received waiver in respect of interest accrued on trade payables for purchase of raw sugar and advances for sale of white sugar received from its affiliate company Wilmar Sugar Pte. Ltd. amounting to INR 111.14 million. The Company accounted for these waivers as equity contribution from the parent and has presented the same as a separate component of equity under other equity as per Ind AS 109 - Financial instruments.

Changes in equity instruments :

Changes in equity instrument, represents reserves created in respect of investment in unquoted equity shares carried at Fair Value Through Other Comprehensive Income.

Revaluation reserve :

Revaluation reserve is credited when property, plant and equipment are revalued at fair value. The reserve is utilised in accordance with the requirements of Ind AS 16. During the year, the Company recognised impairment of property, plant and equipment through revaluation reserve amounting to INR Nil (31^st March 2022: INR 7.57 million) (net of deferred tax) and recognised amount of INR 0.23 million (31^st March 2022: INR 17.07 million) (net of deferred tax) as reversal of revaluation reserve on disposal of assets. During the year, the Company recognised revaluation reserve (net of deferred tax) of INR Nil (31^st March 2022: 2,512.77 million) on revaluation of property, plant and equipment as per Company''s accounting policies.

Retained earnings :

Retained earnings represents surplus/(deficit) earned from the operations of the Company.

Cost of hedging reserve :

The Company designates the forward element of foreign currency forward contracts as cost of hedging and accumulates this cost in the statement of other comprehensive income over the term of the contract. Such amount is amortised to the statement of profit and loss on a systematic basis over the life of the contract.

Prior to the restructuring agreement, the Company was accruing interest expenses on these NCD''s as per the original agreement with the debenture holder for the period from 01^st July 2018 to 30^th September 2022. However, as a part of the restructuring agreement, the Company and the debenture holder agreed on interest payment for the period from 01^st July 2018 to 30^th September 2022 of INR 262.50 million. Pursuant to this, the excess amount of accrual amounting to INR 311.42 million has been written back and accounted as other income during the year ended 31^st March 2023.

a) The External Commercial Borrowings (ECB) was received from its holding Company (Wilmar Sugar Holdings Pte. Ltd.) in the financial year 2020-21. The loan is repayable on maturity i.e. after 60 months from the date of last receipt of ECB. The maturity date of ECB is 27^th August 2025.

c) Term loans availed from First Abu Dhabi Bank, having maturity date of 12^th May 2026, are repayable in 20 structured quarterly instalments commencing from 12^th August 2021.

d) Term loans availed from DBS, having maturity date of 04^th May 2027, are repayable in 16 structured quarterly instalments commencing from 04^th August 2023.

e) Term loans availed from Standard Chartered Bank, having maturity date of 06^th June 2026, are repayable in 16 structured quarterly instalments commencing from 07^th September 2022.

Note B: Nature of Security/guarantees

Secured Non-convertible debentures

1. Exclusive charge by way of mortgage/hypothecation on all the immovable/movable assets at Haldia & Panchaganga.

ECB Loans

1. First pari-passu charge by way of mortgage/hypothecation on all immovable/movable properties of the Company both present & future except assets at Panchaganga and Haldia which are exclusively charged against non convertible debentures.

2. First pari-passu charge for ECB Lender on all the current assets of the company both present and future.

Note C: Corporate guarantee

Wilmar International Limited has extended corporate guarantee towards term loans extended by First Abu Dhabi Bank,

Standard Chartered Bank, DBS Bank and working capital loans (refer note 22) extended by Bank of America, Standard

Chartered Bank, Ratnakar Bank Limited and DBS Bank India Limited aggregating to INR 20,700 million (31^st March 2022:

INR 17,200 million).

Note 37: Earnings Per Share [EPS]

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

Note 38: Commitment and contingencies a. Capital commitments
	Outstanding commitments of the Company are as follows: Outstanding commitments	As at 31^st March 2023	31st	As at March 2022
	Estimated value of contract pending for execution	625.45		3,197.91
	Capital advances of INR 58.67 million (31^st March 2022: INR 514.07 million) is paid against the pending contracts (refer note 8).
b.	Guarantees
	Outstanding guarantees of the Company are as follows: Outstanding Guarantees	As at 31^st March 2023	31st	As at March 2022
	Bank Guarantee	138.31		160.62
	Corporate Guarantee	580.00		130.00
	Letter of Credit	-		77.99
c.	Contingent liabilities Liabilities classified and considered contingent due to contested claims and legal disputes	As at 31^st March 2023	31st	As at March 2022
	Excise and Service Tax Demands (refer note ( i ) below)	2,250.85		938.96
	Sales Tax/VAT Demands (refer note ( ii ) below)	19.22		20.06
	GST (refer note ( iii ) below)	48.92		48.92
	Customs Demands (refer note ( iv) below)	2,102.68		1,461.33
	Litigations related to erstwhile Brazilian subsidiaries (refer note ( v ) below)	53.96		53.21
	Civil Cases (refer note ( vi ) below)	237.84		212.10
	Total	4,713.47		2,734.58

i. Disputes pertaining to denial of cenvat credit on sugar cess, denial of cenvat credit on certain items used for fabrication of machinery, or for laying of machinery foundation or making of capital goods, 6% demand under Rule 6(3) of the CENVAT Credit Rules, cenvat credit disallowed due to invoices being in the name of the head office and credit availed at plants and other matters.

ii. Disputes related to disallowance of input tax credit due to mismatch in forms filed and retention of input tax credit by assuming dealers holding license to generate, distribute or transmit electricity and other matters.

iii. Disputes related to disallowance of common credit as per rule 42 of CGST Rules, 2017.

During the previous year, the Company received a show cause notice (SCN) from GST Department on completion of departmental audit for financial year 2017-18 for non-levy of GST on supply of Extra Neutral Alcohol to liquor manufacturing companies. The Company has obtained a stay order from Karnataka High Court against said SCN, the matter is pending before court as department has not yet filed any objections against said writ petitions in spite of specific directions from the court.

Litigation pertaining to short sanction of GST refund claim have not been considered as contingent liability, since the Company would get credit in electronic ledger for the amount of refund that is rejected and thus, there would be no loss of asset for the Company on the outcome of this litigation, i.e., the Company would either get the refund or the Company would retain the credit in the electronic ledger.

iv. Disputes related to penalty levied for non-payment of Special Additional Duty (SAD) at the time of import of goods (which was subsequently paid by the Company along with interest) and duty levied on the imported goods on the context of wrong classification / availing incorrect exemption.

v. These litigations related to erstwhile Brazilian subsidiaries pertains to labour litigations of these erstwhile subsidiaries in which the Company or the Wilmar Group has been made a party, on account of economic group concept considered in the Lower Court of Brazil. The Company has paid deposits of INR 154.30 million as at 31^stMarch 2023 (31^st March 2022: INR 104.26 million) for contesting the order in Higher Courts in Brazil and this deposit paid has been grouped under âAmount paid under protests to government authorities" in the balance sheet. This balance is fully impaired in the books of accounts as at 31^st March 2023.

vi. Other matters mainly consist of litigations related to claims filed against customers / vendors for recovery of receivable / advance balances and other legal suites.

vii. During the year ended 31^st March 2023, Cane Commissioner of Karnataka issued orders directing all sugar mills in the state of Karnataka to make payments to sugarcane farmers at additional rates over and above the Fair Remunerative Price (FRP) announced by the Central Government as follows:

a. INR 100/MT for sugarcane supplied to mills without distillery

b. INR 150/MT for sugarcane supplied to mills with distillery

The Company along with others has filed a writ petition in Karnataka High Court against the order of the Cane Commissioner. Based on legal opinion obtained by the Company, management believes that the Company has merits and accordingly, no impact has been considered in the standalone financial results in respect of this matter.

Note 39: Defined Benefit plans

The Company has a defined benefit gratuity plan. The companies defined benefit gratuity plan is a final salary plan for employees, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of

Risk to the plan

Following risks are associated with the plan:

A. Actuarial Risk

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption, then the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption, then the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B. Investment Risk

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

C. Liquidity Risk

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the company, there can be strain on the cash flows.

D. Market Risk

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

E. Legislative Risk

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

Actuarial Assumptions

Key actuarial assumptions are given below:

Discount Rate:

The rate used to discount long term employee benefit obligation (both funded and unfunded) will be determined by reference to market yield at the balance sheet date on high quality government bonds.

Salary Growth Rate:

This is Management''s estimate of the increases in the salaries of the employees over the long term. Estimated future salary increases should take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Rate of Return on Plan Assets:

This assumption is required only in case of funded plans. Interest income on plan assets is calculated using the rate used to discount the defined benefit obligation.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash.

Corporate guarantees

a. The Company has obtained corporate guarantees from Wilmar International Limited INR 20,700 million (31^st March 2022: INR 17,200 million) towards term loan and working capital limits extended by banks.

b. The Company has also provided guarantees on behalf of subsidiaries amounting to INR 580 million (31^st March 2022: INR 130 million) for loan availed by the subsidiaries. Details of which are as follows:

As at 31^st March 2023, the company has accumulated impairment of INR 13,560.74 million (31^st March 2022: INR 14,301.34 million) against total gross amount owed by related parties of INR 16,554.62 million (31^st March 2022: INR 17,955.83 million).

This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Note 42: Hedging activities and derivatives

The Company has obtained External Commercial Borrowings (ECB) during the financial year ended 31^st March 2021 from its Holding Company, Wilmar Sugar Holdings Pte. Ltd. amounting to USD 300 million. The Company is also exposed to certain foreign currency risks relating to its on-going business operations. The primary risks managed using derivative instruments are foreign currency risk.

The risk management strategy and how it is applied to manage risk are explained in note 44.

Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. The foreign exchange forward contracts are not designated as cash flow hedges and are entered into for periods consistent with foreign currency exposure of the underlying transactions, generally from 2 to 4 months .

Derivatives designated as hedging instruments

Cash flow hedges

Foreign currency risk:

Foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of outstanding ECB loan which has been denominated in USD.

There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreign exchange forward contracts match the terms of the hedged item. The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange are identical to the hedged risk components. To test the hedge effectiveness, the Company uses the hypothetical derivative method and compares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks.

The hedge ineffectiveness can arise from:

a. The counterparties'' credit risk differently impacting the fair value movements of the hedging instruments and hedged

items

Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts. The fair value are classified under Level 3 Fair value hierarchy.

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

Fair value of the unquoted equity shares of National Commodity Derivative Exchange Limited(NCDEX) at FVTOCI has been estimated on the basis of price to book value multiple of comparable quoted investments, adjusted for significant certain unobservable inputs like business risk discount and liquidity discount.

The fair values of the Company''s interest-bearing borrowings and loans are determined by using discounted cash flow method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own nonperformance risk as at 31^st March 2023 was assessed to be insignificant.

The Company enters into derivative financial instruments with various counterparties, principally financial institutions. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing, using present value calculations. The models incorporate various inputs including the credit quality of counterparties and foreign exchange spot and forward rates. There was no change observed in counterparty credit risk to have any material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognised at fair value.

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31^st March 2023 and 31^st March 2022 are as shown below :

There have been transfers of Investment in equity shares in NCDEX from Level 2 to level 3 as offer received by the Company to sell its shareholding has been withdrawn and calculation of fair value is based on price to book value multiple of comparable quoted investments, adjusted for certain significant unobservable inputs like business risk discount and liquidity risk discount used in calculation of fair value.

Note 44: Financial risk management objectives and policies

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

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

Market risk

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

Foreign exchange exposure and risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the ECB loan of USD 300 million availed from its holding company Wilmar Sugar Holdings Pte. Ltd. and other foreign currency receivables and payables.

The Company manages its foreign currency risk by hedging for period of 6 months. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable against operating activities.

At 31^st March 2023, the Company has fully hedged the foreign currency exposure related to principal portion of External Commercial Borrowing (ECB) loan for 4 to 6 months using foreign currency forward contracts and expects to roll-forward these hedges in the future periods to hedge the foreign currency risks. The Company has also obtained foreign currency forward contracts to cover the foreign currency risks related to receivable in foreign currency and these contracts have a tenure of 3 months.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The Company manages its interest risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Commodity price risk

Commodity price in sugar industry is impacted by multiple factors such as international sugar price, government regulations, quantity of sugar production in the relevant period, etc. The Company has mitigated this risk by well integrated business model by diversifying into co-generation and distillation, thereby utilizing the by-products. The following table shows effect of changes in various commodities on the profit of the Company.

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, thereby leading to a financial loss. The Company conduct thorough credit assessments before granting credit terms and limits to customers, who are then monitored closely for adherence. Company''s export sales are executed against advance or receipt against submission of documents. The Company''s domestic sugar sales are primarily made to corporate customers, who are provided credit terms after thorough credit assessments and thereby, credit default risk is not significant for these customers. Other domestic sugar sales are primarily made on receipt of advance amount before goods are dispatched. Further, ethanol is sold to public sector undertakings and power is supplied to corporations run by state government, thereby the credit default risk is significantly mitigated.

Trade receivables

Trade receivables are non-interest bearing and are generally on credit terms of 7 to 60 days. An impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on historical data of expected credit loss, actual credit loss and party-wise review of credit risk. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

The ageing analysis of the receivables (net of expected credit loss) has been considered from the date the invoice falls due.

Liquidity risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, financial support from parents etc. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

Note 45: Capital management

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial and non-financial covenants (if any) and maximise shareholder''s wealth. There have been no significant breaches in the financial and non financial covenants of any interest-bearing loans and borrowing in the current period.

The Company manages its capital structure and makes adjustments in light of changes in the financial condition.

Note 47: Leases

Company as a lessee

The Company has lease contracts for various land, building and plant. Leases of land have a lease term of 30 years and 90 years, building generally 3 years and 5 years and plant 17 years and 30 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.

The Company also has certain leases of building and leases of office with lease terms of 12 months or less. The Company applies the âshort-term lease'' and âlease of low-value assets'' recognition exemptions for these leases.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:

During the previous year ended 31^st March 2022, the Company had appointed a registered independent valuer who had relevant valuation experience for valuation of property, plant and equipment in India is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017.

Set out below are the carrying amounts of lease liabilities (included under the head non-current and current financial liabilities) and the movements during the period:

Note 49: Other Statutory Information

(i) There are no proceedings initiated or are pending against the Company for holding any benami property under the prohibition of Benami Property Transaction Act, 1988 and rules made thereunder.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period. The Company is in the process of finalising the documents for creation of charge on external commercial borrowings from Wilmar Sugar Holdings Pte. Ltd.

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

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

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

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

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

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

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

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

(viii) There were no Scheme of Arrangements which has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013, during the year.

(ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

Note 50:

As per Ind AS 108 âOperating Segments'' if a financial statement contains both consolidated and standalone financial statements, segment information is required to be disclosed only in the consolidated financial statements. Hence, the same is not given in standalone financial statement.

Note 51:

Previous year''s figures have been regrouped /reclassified wherever necessary to confirm to the current year presentation.

Mar 31, 2022

A. Assets under construction

Capital work in progress as at 31st March 2022 comprises of expenditure incurred for construction of building and plant and machinery pertaining to ethanol expansion poject at two plants of the Company of INR 2,012.54 million and this project is expected to be completed by 31st December 2022.

The other costs comprises expenditure incurred for contruction of plant and machinery and building including material procured for miscellaneous projects at other plants.

B. Capitalisation of borrowing cost.

During the current year, the Company has capitalized borrowing costs related to ethanol expansion projects being undertaken at two manufacturing units of the Company, i.e., Athani and Munoli. During the previous year, the Company had capitalized borrowing costs related to ethanol expansion projects at Athani and Havalga which were commenced in May 2019 and all the assets were put to use in November 2020. The above-mentioned capital expansion is financed by Bank. The amount of borrowing cost capitalised during the year is INR 41.17 million (31st March 2021: INR 41.38 million). The rate used to determine amount of borrowing costs eligible for capitalisation is 4.33% (31st March 2021: 8.75%), which is the EIR of those specific borrowings.

C. Revaluation of land, buildings and plant, machinery and equipment

During the year ended 31st March 2022, the Company had appointed a registered independent valuer who has relevant valuation experience for valuation of property, plant and equipment in India for more than 10 years and is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, to determine the fair value of freehold land, building, plant and machineries and leasehold land (forming part of right of use assets). As an outcome of this process, the Company has recognised decrease in the gross block of freehold land of INR 47.35 and leasehold land included under right of use assets of INR 58.71 million and increase in building of INR 2,036.10 million and plant and machineries of INR 1,743.72 million. The Company recognised this increase within the revaluation reserve and statement of other comprehensive income.

The Company determined these fair values after considering physical condition of the asset, technical usability / capacity, salvage value, quotes from independent vendors. The fair value of land is determined using market approach and building, plant, machinery and equipment using Depreciated Replacement Cost (DRC). The DRC is derived from the Gross Current Reproduction / Replacement Cost (GCRC) which is reduced by considering depreciation. The fair value measurement will be classified under level 3 of the fair value hierarchy.

D. Loss due to cyclone

During the previous year, one of the refineries of the Company was affected by super cyclone Amphan and few assets were damaged. The Company had lodged a claim with Insurance company to recover the losses incurred. However, on prudent basis and in compliance with Ind AS 16, company had accounted for loss of INR 148.70 million in the previous year for damaged assets and the same was charged to the statement of profit and loss and grouped under other expenses.

E. Impairment assessment of CGU

During the previous year, as indicators existed, the Company performed impairment assessment with respect to certain specific Cash Generating Unit (CGU). The recoverable amount was determined using value in use approach based on cashflow projections which were discounted to their present value using a pre-tax discount rate of 11.17%. As a result of this analysis, management had identified and recognized an impairment allowance of INR 1,152.00 million during the year ended 31st March 2021. An impairment loss of INR 24.05 million adjusted against previously recognized revaluation reserve for this CGU has been disclosed in the Other Comprehensive Income (OCI) and balance amount of impairment loss of INR 1,127.95 million grouped under exceptional items in the statement of profit and loss (refer note 36).

The Company has determined the fair value of these assets under revaluation model during the year ended 31st March 2022.

Note 5 (a):The Board of Directors of the Company approved the Scheme of Merger of Gokak Sugars Limited with the Company, at its meeting held on 09th November 2020. SRSL, being a Listed Company, needed the approval of Stock Exchanges and Securities and Exchange Board of India (SEBI) for submission of the scheme to National Company Law Tribunal (NCLT). Accordingly, the Company had made an application to BSE Ltd. (BSE) and National Stock Exchanges of India (NSE) on 21st January 2021 seeking their approval for the scheme of merger. BSE and NSE forwarded the scheme to SEBI with their recommendations. SEBI had sought certain amendments to the scheme from the Company. The Board of Directors, in its meeting held on 28th October 2021, approved the amended scheme of merger which included the amendments suggested by SEBI. The Company then filed the amended scheme along with necessary information with the exchanges on 15th November 2021 and received the approval from the exchanges on 11th March 2022 to file the scheme with NCLT. The Company is now in the process of filing the scheme with NCLT.

Note 5 (b): Investment in subsidiaries are carried at cost in financial statements. Wherever indicators of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. There were no indicators of impairment identifed during the year ended 31st March 2022. During the previous year ended 31st March 2021, the recoverable amount calculation was based on DCF (Discounted Cash Flow) model. Value in use was calculated using cash flow projections covering a five-year forecast considering growth rate of 2%, applying a discount rate of 9.30% - 11.08% to the cash flow projections. The Company had recognised an impairment allowance of INR 70.99 million in respect of its investment in GSL during the previous year.

Note 5 (c): In respect of Monica Trading Private Limited (MTPL), the company has determined the recoverable amount of the investment based on the market value of the underlying asset of MTPL. Accordingly, an impairment allowance of INR 2.90 million (31st March 2021: INR 12.80 million) has been recognised in the statement of profit and loss.

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.

The Company has unabsorbed depreciation of INR 15,592.72 million (31st March 2021: INR 14,818.48 million), unabsorbed business losses of INR 5,555.59 million (31st March 2021: INR 6,896.68 million) on which deferred tax asset has been created. In addition, the Company has MAT credit entitlement of Nil (31st March 2021: INR 196.78 million), included in the balance of deferred tax assets. The unabsorbed depreciation can be carried forward for indefinite period, whereas the unabsorbed business losses and the MAT credit entitlement can be carried forward for 8 years and 15 years respectively.

The Company has unabsorbed depreciation of Nil (31st March 2021: Nil), unabsorbed tax losses of INR 2,635.11 million (31st March 2021: INR 2,190.43 million) on which deferred tax asset has not been created. The unabsorbed depreciation can be carried forward for indefinite period, whereas the unabsorbed losses can be carried forward for 8 years and will expire between financial year 2025-26 to 2029-30.

During the year, the Company has recognised impairment allowance on lifetime expected credit loss model amounting to INR 43.63 million (31st March 2021: INR 216.27 million).

Trade receivables are non-interest bearing and are generally on terms of 7 to 60 days.

Terms/rights attached to equity shares

Equity Contribution from Parents :

During the previous year, Company had received waiver in respect of interest accrued on trade payables for purchase of raw sugar and advances for sale of white sugar received from its parent Company Wilmar Sugar Holding Pte. Ltd. and its fellow subsidiary Wilmar Sugar Pte. Ltd. amounting to INR 463.32 million. The Company accounted for these waivers as equity contribution from the parent and had presented the same as a separate component of equity under other equity as per Ind AS 109 - Financial instruments.

Changes in equity instruments :

Changes in equity instrument, represents reserves created in respect of investment in unquoted equity shares carried at Fair Value Through Other Comprehensive Income.

Revaluation reserve :

Revaluation reserve is credited when property, plant and equipment are revalued at fair value. The reserve is utilised in accordance with the requirements of Ind AS 16. During the year, the Company recognised impairment of property, plant and equipment through revaluation reserve amounting to INR 7.57 million (31st March 2021: INR 16.55 million) (net of deferred tax) and recognised amount of INR 17.07 million (31st March 2021: INR 17.01 million) (net of deferred tax) as reversal of revaluation reserve on disposal of assets. During the year the Company recognised revaluation reserve (net of deferred tax) of INR 2,512.77 million (31st March 2021: Nil) on revaluation of property, plant and equipment as per Company''s accounting policies.

Retained earnings :

Retained eranings represents surplus/(deficit) earned from the operations of the Company.

Cost of hedging reserve :

*The Company is in the process of restructuring its 11.70% non-convertible debentures (NCD) amounting to INR 1,268.98 million (original amount INR 1,500 million) and 11.30% non-convertible debentures (NCD) amounting to INR 845.98 million (original amount INR 1,000 million), for which the Company has received a letter of intent from Life Insurance Corporation of India (debenture holders) on 11th October 2018. This letter was accepted by the Company on 16th October 2018. The Company has obtained approval from the shareholders for the aforesaid transaction in the Annual General Meeting held on 02nd September 2021. The Company has applied to BSE Ltd., for its approval for the aforesaid transaction and is awaiting approval.

Note A: Repayment schedule of external commercial borrowings, term loans and non-convertible debentures is as follows:

a) The Company received INR 22,413.57 million (USD 300 million) during the previous year ended 31st March 2021 through External Commercial Borrowings (ECB) from Wilmar Sugar Holdings Pte Ltd. (Promoter Company). The proceeds have been utilized for repayment of Non- Convertible debentures (NCDs) issued to the banks amounting to INR 2,064 million, repayment of term loans amounting to INR 9,298 million and balance to meet the working capital requirements and for general corporate purposes. The loan is repayable on maturity after 60 months from the date of last utilisation. The maturity date of ECB is 27th August 2025.

b) Term loans availed from First Abu Dhabi Bank, having maturity date of 12th May 2026, are repayable in 20 structured quarterly instalments commencing from 12th August 2021.

c) The repayment of NCDs issued to LIC is being made as per the letter of intent dated 11th October 2018, received from LIC. As per the letter of intent, 11.70% Non-Convertable Debentures and 11.30% Non-Convertable Debentures having a face value of INR 750 million and INR 500 million respectively, having maturity date of 31st March 2029, are repayable in 39 structured quarterly instalments starting from 30th September 2018. The balance amount of 11.70% Non-Convertable Debentures and 11.30% Non-Convertable Debentures having face value of INR 750 million and INR 500 million respectively, having maturity date of 31st March 2032, are repayable in 12 quarterly instalments starting from 30th June 2029.

d) Term loans availed from Standard Chartered Bank, having maturity date of 06th June 2026, are repayable in 16 structured quarterly instalments commencing from 07th September 2022.

Note B: Nature of Security/guarantees

Secured term loans and non-convertible debentures

1. First pari-passu charge by way of mortgage / hypothecation on all immovable / movable properties of the Company both present & future except assets at Panchaganga and Ajinkyatara which are exclusively charged to IREDA.

2. Second pari-passu charge for SDF on all the current assets of the company both present and future. ECB Loans

2. First pari-passu charge for ECB Lender on all the current assets of the company both present and future. IREDA Loan

Exclusive charge on property, plant and equipment at Panchaganga and Ajinkyatara (co-generation plants). Note C: Corporate guarantee

Corporate Guarantee of Wilmar International Ltd. towards term loan extended by First Abu Dhabi Bank, Standard Chartered Bank and working capital loans (refer note 22) extended by Bank of America, Standard Chartered Bank, Ratnakar Bank Limited and DBS Bank India Limited aggregating to INR 17,200 million (31st March 2021:INR 14,400 million) .

Note D: The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

Note E: There are no borrowings availed from banks or financial institutions on the basis of security of current assets.

Note 37: Earnings Per Share [EPS]

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

c) Contingent liabilities
Liabilities classified and considered contingent due to contested claims and legal disputes	As at 31st March 2022	As at 31st March 2021
Income Tax Demands	-	90.12
Excise and Service Tax Demands (refer note ( i ) below)	938.96	938.96
Sales Tax/VAT Demands (refer note ( ii ) below)	20.06	19.86
GST (refer note ( iii ) below)	48.92	124.47
Customs Demands (refer note ( iv) below)	1,461.33	1,883.26
Litigations related to erstwhile Brazilian subsidiaries (refer	53.21	-
note ( v ) below)
Civil Cases (refer note ( vi ) below)	212.10	15.20
Total	2,734.58	3,071.87

for support of capital goods, 6% demand under Rule 6(3) of the CENVAT Credit Rules, cenvat credit disallowed due to invoices being in the name of the head office and credit availed at plants and other matters.

iii. Disputes related to disallowance of common credit as per rule 42 of CGST Rules, 2017.

During the year, the Company received a show cause notice (SCN) from GST Department on completion of departmental audit for financial year 2017-18 for non-levy of GST on supply of Extra Neutral Alcohol to liquor manufacturing companies. The Company has obtained a stay order from Karnataka High Court against said SCN, the matter is pending before court as department has not yet filed any objections against said writ petitions in spite of specific directions from the court.

iv. Disputes related to demand raised on non-payment of timely Special Additional Duty (SAD) at the time of import of import of raw sugar, and duty demand on the context of wrong classification/ availing wrong exemption during import

v. Litigations related to erstwhile Brazilian subsidiaries pertains to labour litigations of erstwhile Brazilian subsidiaries in which the Company has been made a party to these litigations, on account of economic group concept considered by the Lower Court in Brazil. The Company has paid deposits of INR 104.26 million as at 31st March 2022 (31st March 2021: INR 17.20 million) for contesting these judgements in Higher Court in Brazil which has been clubbed under âAmount paid under protests to government authorities" and this balance has been fully impaired in the books of accounts as at 31st March 2022.

vi. Other matters mainly consist of litigations related to claims filed against customers / vendors for recovery of trade receivable / advance balances and other legal suites.

Note 39: Defined Benefit plans

Salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

Risk to the plan

Following risks are associated with the plan:

A. Actuarial Risk

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B. Investment Risk

C. Liquidity Risk

D. Market Risk

E. Legislative Risk

Actuarial Assumptions

Key actuarial assumptions are given below:

Discount Rate:

The rate used to discount other long term employee benefit obligation (both funded and unfunded) will be determined by reference to market yield at the balance sheet date on high quality government bonds.

Salary Growth Rate:

Rate of Return on Plan Assets:

This assumption is required only in case of funded plans. Interest income on plan assets is calculated using the rate used to discount the defined benefit obligation.

Corporate guarantees

a. The Company has obtained corporate guarantees from Wilmar International Limited INR 17,200 million (31st March 2021: INR 14,400 million) towards term loan and working capital limits extended by banks.

Impairment of amounts owed by related parties

As at 31st March 2022, the Company has accumulated impairment of INR 14,301.34 million (31st March 2021: INR 19,438.31 million) against total gross amount owed by related parties of INR 17,955.84 million (31st March 2021: INR 23,653.83 million).

This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Note 42: Hedging activities and derivatives

During the previous year, Company has obtained External Commercial Borrowings (ECB) from its Holding Company, Wilmar Sugar Holdings Pte. Ltd. amounting to USD 300 million. The Company is also exposed to certain foreign currency risks relating to its on-going business operations. The primary risks managed using derivative instruments are foreign currency risk.

The risk management strategy and how it is applied to manage risk are explained in note 44.

Derivatives not designated as hedging instruments

Derivatives designated as hedging instruments Cash flow hedges Foreign currency risk:

Foreign exchange forward contracts are designated as hedging instruments in cash flow hedges of outstanding ECB loan which has been denominated in USD.

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

The fair values of the Company''s interest-bearing borrowings and loans are determined by using discounted cash flow method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own non-performance risk as at 31st March 2022 was assessed to be insignificant.

Note 44: Financial risk management objectives and policies

Market risk

Foreign exchange exposure and risk

At 31st March 2022, the Company has fully hedged the foreign currency exposure related to principal portion of External Commercial Borrowing (ECB) loan for 5 months using foreign currency forward contracts and expects to roll-forward these hedges in the future periods to hedge the foreign currency risks. The Company has also obtained foreign currency forward contracts to cover the foreign currency risks related to receivable and other payable balances in foreign currency and these contracts have a tenure between 1 to 3 months.

Interest rate risk

The Company manages its interest risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

Commodity price risk

Credit risk

Trade receivables

The ageing analysis of the receivables (net of expected credit loss) has been considered from the date the invoice falls due.

Note 45: Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of Company''s management is to maximise shareholder''s value. 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. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no significant breaches in the financial and non financial covenants of any interest-bearing loans and borrowing in the current period.

Note 46:Details of loan given, investments made and guarantee given covered U/S 186 (4) of the Companies Act, 2013

a) Loans given to subsidiaries for business purpose are disclosed in note 41 (B)

b) Investments made are disclosed in note 5

c) Corporate guarantees given by the Company are disclosed in refer note 38 (b)

Note 47: Leases

Company as a lessee

The Company also has certain leases of building and leases of office with lease terms of 12 months or less. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases.

The Company had total cash outflows for leases of INR 21.85 million (31st March 2021: INR 15.55 million) during the financial year ended 31st March 2022. The Company do not have any future cash outflows relating to leases that have not yet commenced.

The Company has certain lease contracts that are non-cancellable for fixed period and considered will be terminated after completion of non-cancellable period.

Note 49: Other Statutory Information

(i) There are no proceedings initiated or are pending against the Company for holding any benami property under the prohibition of Benami Property Transaction Act, 1988 and rules made thereunder.

(ii) The Company does not have any transactions with companies struck off.

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

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

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

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

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

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

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

(viii) There were no Scheme of Arrangements which has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013, during the year.

(ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

Note 50: As per Ind AS 108 ''Operating Segments'' if a financial statement contains both consolidated and standalone financial statements, segment information is required to be disclosed only in the consolidated financial statements. Hence, the same is not given in standalone financial statement.

Note 51: Previous year''s figures have been regrouped /reclassified wherever necessary to confirm to the current year presentation.

Mar 31, 2018

1. CORPORATE INFORMATION

Shree Renuka Sugars Limited (âSRSLâ or âthe Companyâ) is a public company incorporated and domiciled in India. The Companyâs shares are listed on the BSE Ltd and National Stock Exchange of India Ltd. The registered office of the company is located at BC 105 Havelock Road, Camp, Belagavi - 590001.

The Company is principally engaged in the manufacturing of sugar, ethyl alcohol and ethanol and generation and sale of power.

The financial statements for the year ended 31st March 2018 were authorised for issue by the Board of Directors of the Company on 3rd May 2018.

1.1 SIGNIFICANT ACCOUNTING POLICIES

i. Basis of Preparation:

The financial statements of the Company has been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, (as amended from time to time).

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:

- Land, buildings and plant and machinery classified as property, plant and equipment

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).

The financial statements are prepared in INR and all values are rounded off to the nearest Millions except when stated.

2.1 SIGNIFICANT ACCOUNTING JUDGMENTS ESTIMATES AND ASSUMPTIONS

The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities, Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods,

Judgements

I n the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements,

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company Such changes are reflected in the assumptions when they occur.

Financial instruments

During the year the Company has entered into framework agreement with its lenders for restructuring its borrowings. As part of the restructuring process the Company has issued 0.01% Non-convertible debentures, redeemable preference shares and optionally convertible preference shares to the lenders. The Company has recognised the new instruments issued at fair value and the difference between the fair value of the instrument and the non-sustainable part of borrowings has been recognised as income on de-recognition of financial liability by the Company.

Revaluation of property, plant and equipment

The Company measures land, buildings, plant and machinery classified as property, plant and equipment at revalued amounts with changes in fair value being recognised in OCI. The Company has engaged an independent valuation specialist to assess fair value at 31st March 2016 for revaluation of land, buildings, plant and machinery. Fair value of land and building was determined by using the market comparable method and plant & equipment was determined by using resale value method. The key assumptions used to determine fair value of the property, plant and equipment are provided in Note 3.

impairment of non-financial assets

I mpairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The value in use calculation is based on a DCF model. The cash flows are derived from the cashflow estimates for the remaining life of the asset (in case of BOOT) and budget for 5 years in case of other assets and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows. The key assumptions used to determine the recoverable amount for the different CGUs, are disclosed and further explained in Note 3.

Taxes

The Group has unabsorbed depreciation of Rs.12,314.74 Million (31st March 2017: Rs.11,105.62 Million, 1st April 2016: Rs.9,530.36 Million), unabsorbed tax losses of Rs.22,518.09 million (31st March 2017: Rs.10,361.81 Million, 1st April 2016: Rs.9,663.67 Million) and MAT credit entitlement of Rs.528.90 million (31st March 2017: Rs.528.90 Million, 1st April 2016: Rs.528.90 Million). The unabsorbed depreciation can be carried forward for indefinite period, whereas the unabsorbed losses and the MAT credit entitlement can be carried forward for 8 years and 15 years respectively. Based on the future budgeted operational cash-inflows, post the restructuring process, the Company expects to generate taxable income for utilisation of the unabsorbed depreciation, unabsorbed tax losses and MAT credit entitlement.

defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

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

Further details about gratuity obligations are given in Note38.

2.2 STANDARDS ISSUED BUT NOT YET EFFECTIVE

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Companyâs financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

ind AS 115 Revenue from Contracts with Customers

Ind AS 115 was notified on 28th March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1st April 2018. The Company will adopt the new standard on the required effective date using the modified retrospective method. The Company has established an implementation team to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary. A reliable estimate of the quantitative impact of Ind AS 115 on the financial statements will only be possible once the implementation project has been completed.

2.3 GOING CONCERN

The Company has incurred continuing losses for the year ended 31st March 2018, at standalone level. During the year, the Company has executed debt restructuring scheme and restructured its overall borrowings and settled corporate guarantees issued to its subsidiaries. This has resulted into substantial reduction in the interest outflow for future period and extended the repayment plan in relation to restructured borrowings. Further, the Company expects to generate operational cash-inflows in next twelve months, which will support the Company to meets its near future cash obligations and has also obtained corporate guarantee from Wilmar International Limited to support the outstanding balance of restructured borrowings. Taking these factors into consideration, the Company believes financial information is fairly presented on going concern basis.

2.4 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES NEW AND AMENDED STANDARDS AND INTERPRETATIONS

The Company applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April 2017 The nature and the impact of each amendment is described below:

Amendments to ind AS 7 Statement of Cash Flows: Disclosure initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for the current period in Note 17.

Amendments to ind AS 102 Classification and Measurement of Share-based Payment Transactions

The amendments to Ind AS 102 Share-based Payment addresses three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are met. The Company has applied these amendments without restating prior periods. However, their application has no effect on the Companyâs financial position and performance as the Company had no such transaction.

A. Asset under construction

Capital work in progress as at 31st March, 2018 comprises expenditure for the plant and building in the course of construction,

B. Revaluation of land, buildings and plant, machinery and equipment

The management adopted revaluation model for its land, building and plant & equipment and determined that these constitute separate class of assets under Ind AS 113, based on the nature, characteristics and risks of the asset,

Fair value of the land and building was determined by using the market approach and plant, machinery and equipment was determined by using replacement value method, As at the date of revaluation, the land, building, plant, machinery and equipment fair values are based on valuations performed by an accredited independent valuer who has relevant valuation experience for similar assets in India,

The Company had performed valuation as on 31st March 2016, however management is of the opinion that there is no significant change in fair value of said assets, hence no fair valuation done during the current year,

Significant unobservable valuation input:

The value of land was determined based on condition, location, demand supply in and around and other infrastructure facility available at and around the said plot of land, Land which was based on government promoted industrial estates, was measured on the present fair market value depending on the condition of the said estates, its location and availability of such plots in the said industrial estate,

Building/structural sheds were measured considering the fair market value of the constructed area depending on condition, location and other infrastructural facilities available at and around the said plot in the estate, The fair market value was applied to the building structure after considering the type of construction, quality of workmanship, its maintenance, etc,

The valuation of machinery and other movable assets was based on its present fair market value after allowing for the depreciation of the particular machinery/assets, as well as the present condition of the machinery/assets. The replacement value of the said machinery/assets as well as its maintenance up-keep is considered while working out its present fair market value.

Significant increases/ (decreases) in estimated price per square meter in isolation would result in a significantly higher/ (lower) fair value.

The valuation is classified as level 3 fair value hierarchy due to inclusion of unobservable inputs.

C. impairment

In power segment, due to stiff competition in power industry, the Company do not expect any increase in power rates in coming years, which indicates decrease in recoverable amount from power plant assets. The Company performed its annual impairment test for tangible assets for year ended 31st March, 2018. The Company calculated present value of future cash flows of CGU with the carrying value of asset of CGU. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

During the year ended 31st March 2018, the impairment loss of Rs.486.37 Million is recognised for two plants as discussed below:

The recoverable amount of Power Plant, as at 31st March 2018, has been determined based on a value in use calculated using cash flow projections from financial budgets approved by senior management for the period available for use. The Group has used pre-tax discount rate for cash flow projections for impairment testing during the current year. As a result of this analysis, management has recognised an impairment charge of Rs.486.37 Million in the current year.

The distillery plant at Pathri amounting to Rs.3725 mn and capital work in progress amounting to Rs.28.76 Million has also been impaired considering not in useâ

Key assumptions used for value in use calculations for power plant

- EBITDA

- Discount rates - Gsec for 10 years plus spread considering market risk and nature of industry

- Growth rates used to extrapolate cash flows beyond the forecast period - NIL As the management doesnât expect the power rate to increase, growth rate in power price is considered as NIL.

EBiTDA- EBITDA is based on expected cane available for crushing and bagasse generated out of it to generate power and the average realisation per unit of power sold. The revenue generated from the sale of power is reduced by the operating expenses (excluding depreciation) to arrive at EBITDA.

**Impariment of unquoted investment in Shree Renuka Global Ventures Ltd

The Company has made 100% provision towards its investment in Shree Renuka Global Ventures Ltd which is holding company of Brazil operations,

On 28th September 2015, Shree Renuka do Brasil Participates Ltda, Brazil (SRBDP) filed an appeal for Court-Ordered Reorganization (âRJâ), encompassing its subsidiaries (SRBDP Group),

On 26th July 2016, the designated court approved the re-organization Plan of Renuka Vale do Ivaf SA (Renuka VDI), A new General Meeting of Creditors is now scheduled for 7th May, 2018 to revise the planâ

The Creditors Meeting of Renuka do Brasil S,A, (Renuka RDB) held on 26th September 2017, approved the submitted recovery plan, As at 17th March 2018, Renuka do Brasil S,A, (Renuka RDB), has filed at the Court a new Amended Plan requesting approval from the Court, To date, this new Amended Plan has not yet been analysed and/or approved by the General Meeting of Creditors, nor has been approved by the Court, Accordingly, pending the outcome of reorganisation plans with the courts in Brazil, the auditors of the company have disclaimed opinion on the consolidated financial information of the Company, in relation to Brazilian operations. Considering these factors, the Company has performed its annual impariment test of certain investment in its subsidiaries for the year ended 31st March 2018. Management is of the view that the invested amount is not recoverable, hence the investment is considered impaired and written down in full amounting to Rs.18,245.25 Million (31st March 2017: â Nil, 1st April 2016: â Nil).

The Company has obtained independent legal opinion in Brazil, that in principle, each legal entity is responsible with its own assets before creditors for their own debts, which are separate from those of partners, shareholders and management members.

# 697,700 equity shares pledged with IDBI bank towards working capital loan availed by the Company

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority

The Company has unabsorbed depreciation of Rs.12,314.74 Million (31st March 2017: Rs.11,105.62 Million, 1 April 2016: Rs.9,530.36 Million), unabsorbed tax losses of Rs.22,518.09 Million (31st March 2017: Rs.10,361.81 Million, 1 April 2016: Rs.9,663.67 Million) and MAT credit entitlement of Rs.528.90 Million (31st March 2017: Rs.528.90 Million, 1 April 2016: Rs.528.90 Million). The unabsorbed depreciation can be carried forward for indefinite period, whereas the unabsorbed losses and the MAT credit entitlement can be carried forward for 8 years and 15 years respectively. Based on the future budgeted operational cash-inflows, post the restructuring process, the Company expects to generate taxable income for utilisation of the unabsorbed depreciation, unabsorbed tax losses and MAT credit entitlement.

The Company has recognised impairment allowance on life time expected credit loss basis amounting to Rs.3,506.73 Million and Rs.500 Million based on 12 months expected credit loss.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

For terms and conditions relating to related party, refer Note 41.

Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.

Terms/rights attached to equity shares

The Company has only one class of equity shares having face value of Rs.1 per share, Each holder of equity shares is entitled to one vote per share, The company declares and pays dividend in Indian rupees,

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

debenture Redemption Reserve (dRR)

The company has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), requires the company to create DRR out of profits of the company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures issued out of the profits of the company

**Nature of Security/guarantees Term loans and Non-convertible debentures

1. First pari-passu charge by way of mortgage / hypothecation on all immovable / movable properties of the Company both present & future except assets at Panchanga and Ajinkyatara which are exclusively charged to IREDA.

2. Second pari-passu charge on all the current assets of the company both present and future by the lenders except nonConvertible debentures issued to LIC.

Working capital loan (Refer note 21)

1. First Pari-passu charge on all the current assets of the company both present and future.

2. Second pari passu charge on entire PPE both present and future except plant at Panchanga and Ajinkyatara which are exclusively charged to IREDA.

3. Company has pledged 697,700 equity shares of NCDEX with IDBI bank Limited towards working capital loan. Corporate guarantee

Corporate Guarantee of Wilmar International Ltd. towards term loan and working capital limits extended by IDBI Bank Limited, ICICI Bank Limited, Axis Bank Limited, RBL Bank Limited, Yes Bank Limited, Exim Bank, Kotak Mahindra Bank Limited and State Bank of India Limited aggregating to Rs.27,130 Million.

IREDA LOAN

Exclusive charge on plant, properfty and equipment at Panchganga and Ajinkyatara (co-generation plants).

Debt restructuring scheme

In March 2018, the Company entered into framework agreement to restructure borrowings from lenders. As part of restructuring process, Wilmar Sugar Holdings Pte. Limited (WSH) has infused funds of Rs.7,839 Million (USD 120 Million) and the company has availed revised term loan facilities and working capital facilities which are also secured by the Corporate Guarantee given by Wilmar International Ltd (towards term loan and working capital limits aggregating to Rs.27,130 Million).

As part of this process, the Company issued 481,843,884 Compulsorily Convertible Preference Shares (CCPS) to WSH having face value of Rs.16.27 at premium of Rs.0.01. WSH exercised option for conversion CCPS into equity shares and the Company issued 481,843,884 equity shares of Rs.1 each at premium of Rs.15.28 per share. Further, the Company also made repayment of Rs.1,668.63 Million towards term loans facilities and issued following securities to lenders as part of the restructuring process to its lenders towards settlement of its borrowings:

The Company and its subsidiaries also entered into settlement agreement for settlement of the guarantees given by the Company to lenders of subsidiaries for the borrowings availed by them, amounting to Rs.18,768.32 Million, by issue of shares of the Company amounting to Rs.478.41 Million (included in the equity shares stated above) and by repayment of borrowings of Rs.14,052.29 Million. The Company also incurred cost of Rs.703.65 Million for releasing guarantees given to subsidiaries in Brazil

Post issue of financial instruments and repayment of borrowings the Company recognised net gain as part of the restructuring of Rs.13,838,89 Million (including Rs.10,531,06 Million specified in table above) which has been included as part of exceptional items

Repayment schedule of financial instruments is as follows:

(a) Term loans are repayable in 47 structured quarterly instalments commencing from 30th September 2017

(b) 0,01% Non-Convertible Debenture (NCDs) of Rs.5,521 Million, repayable in 12 equal quarterly instalments commencing from 30th June, 2024,

(c) 0,01% Optionally Convertible Preference Shares (OCPS) of Rs.4,280,89 Million, issued to lenders with convertibility right at the end of 18 months in line with existing SEBI regulations, However, the company will extend the convertibility of the OCPS in its Annual General Meeting/ Extraordinary General Meeting at least 60 days prior to the expiry of the convertibility right of the lenders, subject to applicable regulations, Simultaneously, the company will seek exemption from SEBI for relaxation of conversion period of OCPS beyond 18 months, so as to be converted on or before 31st March 2029 at a price to be determined as per prevailing SEBI Guidelines,

(d) 0,01% Redeemable Preference Shares (RPS) of Rs.7,438,82 Million, redeemable in 40 structured quarterly instalments commencing from 30th June 2027

Government grant relates to financial assistance for investment towards sugar and power division, There are no unfulfilled conditions or contingencies attached to these grants, These grants are recognised on straight line basis over the life of the loan,

** There is no principal amount and interest overdue to the Micro and Small Enterprises. During the year no interest has been paid to such parties. (This information have been determined to the extent such parties have been identified on the basis of information available with the company).

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled with in the credit period agreed with the supplier,

Other payables are non-interest bearing

For terms and conditions with related parties, refer to Note 41

For explanations on the company credit risk management processes, refer to Note 43.

Trade Payable includes liabilities in relation to Crop and H&T purchases for which SRSL has provided corporate guarantee to ICICI Bank, IDBI Bank, State Bank of India, RBL Bank, Canara Bank and Bank of India.

Sale of good includes excise duty collected from customers of Rs.151.79 Million (31st March 2017: Rs.929.30 Million).Sale of goods net of excise duty is Rs.58,476.69 Million (31st March 2017: Rs.77,715.29 Million). Revenue from operations for periods up to 30th June 2017 includes excise duty. From 1st July 2017 onwards the excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The company collects GST on behalf of the Government. Hence, GST is not included in revenue from operations. In view of the aforesaid change in indirect taxes, revenue from operations for the year ended 31st March 2018 is not comparable against 31st March 2017,

NOTE 3 : COMMITMENT AND CONTINGENCIES

a) Operating lease commitments (as lessee)

The Company has entered into various operating leases for office, residential and factory premises, These are generally short-term leases and cancellable by serving adequate notice, The minimum amount of lease rentals payable on non-cancelable leases is as follows:

NOTE 4 : DEFINED BENEFIT PLANS

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the memberâs length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees. The Board of Trustees is responsible for the administration of the plan assets and for the definition of the investment strategy

Salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in Note 19.

A description of methods used for sensitivity analysis and its Limitations:

Sensitivity analysis performed by varying a single parameter while keeping all the other parameters unchanged.

Sensitivity analysis fails to focus on the interrelationship between underlying parameters. Hence, the results may vary if two or more variables are changed simultaneously

The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.

NOTE 5 : DETAILS OF LOAN GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN COVERED U/S 186 (4) OF THE COMPANIES ACT, 2013

a) Loans given to Subsidiaries for business purpose and disclosed in Note 41.

b) Investments made are disclosed in Note 5

c) Corporate Guarantees given by the company (Refer Note 41)

NOTE 6 : RELATED PARTY TRANSACTIONS

A) RELATED PARTIES

(A) SUBSIDIARY COMPANIES:

1 Gokak Sugars Limited

2 KBK Chem-Engineering Private Limited

3 Monica Trading Private Limited

4 Shree Renuka Tunaport Pvt, Ltd,

5 Shree Renuka Agri Ventures Limited

6 Renuka Commodities DMCC, Dubai

7 Shree Renuka East Africa Agriventures PLC, Ethiopia

8 Shree Renuka Global Ventures Limited, Mauritius

9 Lanka Sugar Refinery Company (Private) Limited, Sri lanka**

10 Shree Renuka do Brasil Participacoes, Brazil

11 Renuka Vale do Ivaf S/A, Brazil

12 Biovale Comercio de Leveduras Ltda, Brazil

13 Ivaicana Agropecuaria Ltda, Brazil

14 Shree Renuka Sao Paulo Participacoes Ltda, Brazil

15 Renuka do Brasil S/A, Brazil

16 Renuka Cogeracao Ltda, Brazil

17 Renuka Geradora de Energia Eletrica Ltda, Brazil

18 Revati Agropecuaria Ltda, Brazil

19 Revati Geradora de Energia Eletrica Ltda, Brazil

20 Revati S,A-Acucar e Alcool,Brazil

** Liquidated as on 30th September 2017

(b) Affiliate companies:

1 Renuka Energy Resource Holdings (FZE), Sharjah

2 Ravindra Energy Limited,

3 Adani Wilmar Limited

4 Wilmar Sugar Pte Ltd,

5 Wilmar International Ltd

(c) Key managerial personnel (KMP)

1 Mrs, Vidya Murkumbi- Exceutive Chair Person

2 Mr, Narendra Murkumbi- Vice Chairman and Managing Director

3 Mr, Vijendra Singh- President and Whole Time Director

4 Mr, K, K, Kumbhat- Chief Financial Officer

5 Mr, Naveen Manghani - Company Secretary (Till 31st October 2017)

6 Mr, Rupesh Saraiya - Company Secretary (From 13th November 2017)

(d) Relative of key managerial personnel (RkMP)

1 Mrs, Sangeeta Singh - DGM (Quality and Training)

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

Corporate guarantees

The Company has received corporate guarantees of Wilmar International Ltd Rs.27,130 Million (31st March 2017 â Nil) towards term loan and working capital limits extended by banks.

The Company has also provided guarantees on behalf of subsidiaries amounting to Rs.162.61 Million (31st March 2017 Rs.16,090.08 Million) for performance of certain contracts entered and loan taken by the subsidiaries. Details of which are as follows:

impairment of amounts owed by related parties

For the year ended 31st March 2018, the company has recorded impairment of amounts owed by related parties Rs.20,571.75 Million (31st March 2017: â Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

E) TRANSACTIONS WITH KEY MANAGERIAL PERSONNEL EMPLOYEE LOANS

The company operates loan scheme providing loan to all employees, Under the scheme, the employee can avail loan up to two times of gross monthly salary repayable in easy monthly instalments, Such loans are unsecured and the interest free, During the year loan granted to key management personnel â Nil (31st March 2017: Rs.4,50 Million), out of which â Nil (31st March 2017: Rs.4,50 Million) was repaid,

Other directorsâ interests

The company acquired office space on rent from one of key managerial personnel of the company, During both the years company has paid a rent of Rs.7,54 Million (31 March 2017 Rs.6,95 Million) including all the taxes, out of which amount payable is Rs.0,58 Million (31 March 2017: â Nil)

The management assessed that cash and cash equivalents, trade receivables, trade payables, other current assets and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

As at 31st March 2018, fair value of the unquoted equity shares recognised at FVTOCI have been estimated using a non-binding agreement with an investor. As at 31st March 2017 and 1st April 2016, fair value of the unquoted equity shares recognised at FVTOCI has been estimated at actual sale price of shares recognised in earlier years.

The fair value of non-current borrowings are based on discounted cash flow using a current borrowing rate. They are classified as level 3 fair values hierarchy due to the use of unobservable inputs including own credit risk.

Financial risk management objectives and policies

The Companyâs principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include investments, loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

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

Market risk

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 Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long-term debt obligations with floating interest rates.

The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long-term debt obligations. The Company manages its interest risk by having a balanced prortfolio of fixed and variable rate loans and borrowings.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on loans and borrowings with variable interest rates. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:

Commodity price risk

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss, The Company is exposed to credit risk from its operating activities (primarily trade receivables) and loans given to affiliates, The Company only deals with parties which has good credit worthiness based on companyâs internal assessment, The Company has developed credit worthiness assessment mechanism as well, As per the management procedure, each party is internally rated on the basis of their external ratings (wherever available), respective industry information / trends available, financial position of party and past transactions with the party

A counterparty whose payment is due more than 90 days after the due date is considered as a defaulted party, This is based on considering the market and economic forces in which the entities in the Company is operating, The Company write-off the amount if the credit risk of counter-party increases significantly due to its poor financial position and failure to make payment beyond a period of 180 days from the due date,

Trade receivables

Trade receivables are non-interest bearing and are generally on credit terms of 30 to 180 days,

An impairment analysis is performed at each reporting date on an individual basis for major clients, In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively, The calculation is based on exchange losses historical data, The Company does not hold collateral as security The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets,

The ageing analysis of the receivables has been considered from the date the invoice falls due

Liquidity risk

The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, debentures, preference shares etc, The Companyâs policy is that not more than 25% of borrowings should mature in the next 12-month period, Post the recent debt restructuring process, the Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low, The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders,

NOTE 7 : CAPITAL MANAGEMENT

For the purpose of the Companyâs capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of Companyâs management is to maximise shareholderâs value.

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

The calculation of capital for the purpose of capital management is as follows:

NOTE 8 : NOTE ON ADJUSTMENTS MADE TO COMPARATIVE FINANCIAL INFORMATION

The Company has elected to apply the revaluation model as its accounting policy for subsequent measurement of property, plant and equipment under Ind AS 16 Property, plant and Equipment (PPE). As on 31st March, 2016, the Company had measured the fair value of its assets and recognised a revaluation surplus of Rs.19,735.40 Million under the head revaluation reserve in Other Equity. However -

a) Depreciation in relation to revalued Property, plant and equipment was reduced from the revaluation reserve for the year ended 31st March 2017 insteading of debiting the same to statement of profit and loss.

b) The Company had not recognised deferred taxes liability on the temporary difference arising from revaluation of PPE, in accordance with Ind AS 12, âIncome Taxesâ â

c) The company had elected to measure its investment in equity shares of NCDEX at fair value through OCI but impact of the fair value movement was not adjusted to the other comprehensive income.

d) The Company has aligned the measurement of benefit of a government below market rate of interest with the requirements of Ind AS 20 âAccounting for Government Grants and Disclosure of Government Assistanceâ

e) The Company had not released revaluation reserve to the extent of disposal of PPE to OCI.

NOTE 9 : SEGMENT REPORTING

The Company is engaged in the business of manufacturing sugar, ethyl alcohol and ethanol and generation and sale of power. In accordance with Ind AS 108 âOperating Segmentsâ the Company has presented segment information on the basis of consolidated financial statements which form part of this report.

NOTE 10 :

Previous yearâs figures have been regrouped /rearranged wherever necessary to confirm to the current year presentation.

Mar 31, 2017

Notes :

1. Revenue within India and Outside India are bifurcated based on sales to customers situated in India and Outside India.

2. Segment Assets Investments, Loans and Advances, Trade Receivables and Other assets bifurcated based on situated within India and Outside India.

3. Segment Liabilities, Borrowings, Trade Payables and Other Liabilities bifurcated based on situated within India and Outside India.

Notes

A. Miscellaneous expenses are not recognized as asset as per IND AS, amount charged during the year has been transferred.

B. Under Ind AS, Borrowings under mortised cost are to be accounted under effective interest rate method under Ind AS 109. Accordingly, the processing fee and other upfront fees paid for obtaining loans should be considered for effective interest calculation and not to be charged to Profit and loss account.

C. Under previous GAAP, deferred taxes were to be accounted on timing differences arising between the accounting profit and tax profit. However, such method has been replaced with balance sheet approach in Ind AS, wherein deferred taxes are to be accounted for the differences arising between the accounting balance sheet and tax balance sheet. Accordingly, deferred taxes has been accounted for such temporary differences.

D. As per Ind AS 19, Employee Benefits, actuarial gains and losses are recognized in other comprehensive income and not reclassified to profit and loss in a subsequent period.

Adjustments reflect unamortized negative past service cost arising on modification of the gratuity plan in an earlier period. Ind AS 19 requires such gains and losses to be adjusted to retained earnings.

4 RELATED PARTY DISCLOSURES RELATED PARTIES (A) SUBSIDIARY COMPANIES

i. Renuka Commodities DMCC, Dubai (UAE)

ii. Parana Global Trading (FZE), Sharjah (UAE)( Operation closed on 06^th July 2015)

iii. Shree Renuka Agri Ventures Limited

iv. KBK Chem-Engineering Private Limited

v. Gokak Sugars Limited

vi. Shree Renuka Global Ventures Limited, Mauritius

vii. Lanka Sugar Refinery Company (Private) Limited, Srilanka.

viii. Monica Trading Private Limited

ix. Shree Renuka East Africa Agriventures PLC, Ethiopia.

x. Shree Renuka Tunaport Private Limited

xi. Shree Renuka International PTE, Singapore

(B) ASSOCIATE COMPANIES

i. Khandepar Investments Private Limited

ii. Vantamuri Trading and Investments Limited

iii. Murkumbi Investments Private Limited

iv. Renuka Energy Resource Holdings (FZE), Sharjah

v. Damodar Resource Holdings (FZE), Sharjah

vi. Ravindra Energy Limited

vii. Agri Venture Trading and Investment Private Limited

viii. Adani Wilmar Limited

ix. Wilmar Sugar Pte Limited

x. Great Wall - Wilmar Holding Limited

(C) KEY MANAGERIAL PERSONNEL

i. Mrs. Vidya Murkumbi - Executive Chairperson

ii. Mr. Narendra Murkumbi - Vice Chairman and Managing Director

iii. Mr. Vijendra Singh - President and Whole Time Director

iv. Mr. K. K. Kumbhat- Chief Financial Officer

v. Mr. D.V. Iyer- Company Secretary and Compliance Officer. (Till 18^th July 2015)

vi. Mr. Naveen Manghani- Company Secretary and Compliance Officer. (From 14^th August 2015)

5. For the payment of managerial remuneration to Mrs. Vidya Murkumbi and Mr Vijendra Singh, Whole time directors of the Company for Financial Year 2014-15, the company has obtained the share holder''s approval by way of special resolution, and permission of the Central government is pending.

6. The Company has made an investment in its subsidiary company Shree Renuka Global Ventures Ltd., Mauritius. This investment is stated at its carrying amount of Rs, 18,245.25 Mn. The Mauritius subsidiary company has made investment in the step down subsidiary company Shree Renuka do Brazil Participators Ltda., (SRDBPL). SRDBPL together with all its subsidiary filed for protection on 28^th September 2015 under Judicial Recovery (Law 11.101/2005- Recuperacao Judicial) in the designated court in the capital of the state of Sao Paulo, Brazil. In lieu of this, SRDBPL along with its subsidiaries filed the proposal for Reorganization Plan before the designated court.

The designated court approved re-organization plan for its subsidiary, Renuka Vale do Ivai S/A (Renuka VDI) on 26^th July 2016 and for Renuka do Brazil S/A (Renuka RDB) on 29^th August 2016.

On 26^th January 2017, a petition was filed by Renuka RDB requesting to convey a new General Creditors'' Meeting, seeking to allow the company to re organize the amount payable to its creditors through the submission of an amendment to its Judicial Re-organization Plan, adjusting the payment terms and conditions of the credits to the current economic and financial reality of the plan. The new General Creditors'' Meeting was scheduled for 6^th March 2017 (1^st Call) and 13^th March 2017 (2^nd Call).

On 22^nd May 2017, an Amended Judicial Re-organization Plan of Renuka RDB was approved by the General Creditors'' Assembly, which is now pending for approval of the Court.

In view of pending court approval, for Amended Judicial Re-organization plan of Renuka RDB, the provision for impairment in the value of investment, if any, will be assessed and considered after receipt of approval of the court.

7. DETAILS OF LOAN GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN COVERED U/S 186 (4) OF THE COMPANIES ACT, 2013

a) Loans given to Subsidiaries for business purpose and disclosed in Note 34 (xviii).

b) Investments made are disclosed in Note 4

c) Corporate Guarantees given by the company in respect of loans as at 31^st March 2017

8. Previous year''s figures have been regrouped /rearranged wherever necessary to conform to the current year grouping

Mar 31, 2016

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

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

g) The Board at its meeting held on May 27, 2014, allotted 257,491,592 Equity Shares of face value of '' 1/- each, for a price of '' 20.08 per Equity Share, aggregating to '' 5,170.43 mn to M/s Wilmar Sugar Holdings Pte. Ltd. Consequently Wilmar Sugar Holdings Pte. Ltd, holds 27.72% of the enhanced equity share capital of the company, and paid-up Equity share capital of the company had increased from '' 671.32 mn to '' 928.81 mn for the Financial year ended 31st March 2015.

i) Capital Reserve consist of Subsidy received from Government of Karnataka for commissioning of Co-Generation plant located at Munoli Unit, for supply of excess power to the State grid.

ii) General reserve is primarily created to comply with the requirements of section 123 of the Companies Act, 2013 .

This is a free reserve and can be utilized for any general purpose like issue of bonus shares , payment of dividend , buy back of shares etc. Balance in General Reserve of '' 3166.02 Mn was transferred back to Surplus/(Deficit) in statement of profit and loss, due to accumulated losses during the financial year ended 31st March 2015.

iii) Debenture Redemption Reserve is created to the extent of 25% of the Non convertible debentures (being privately placed) equally over the period of the debenture before maturity, as per Rule 18 (7) of the Companies (shares and debentures) Rules, 2014 and Section 71 of the Companies Act, 2013.During the year the company has created '' 125 Mn of debenture redemption reserve on outstanding amount of Non Convertible debentures.

iv) Revaluation Reserve : Refer Note 1 of Note 12A

v) Foreign Currency Monetary Item Translation Difference Account (FCMITDA) represents unamortized foreign currency fluctuation loss on External commercial borrowings of US $20 Mn utilized for purchase of shares of overseas subsidiary. The company has exercised the option available in AS11 para 46A (which was inserted by Ministry of corporate affairs vide its notification dated 29th Dec, 2011).

Nature of Security

a) Non-Convertible Debentures:

(i) 1500 Redeemable Non-Convertible Debentures (11.70%) of '' 1,000,000 each, secured by first pari-passu charge on movable and immovable assets of the company and are redeemable at par on April 02, 2017.

(ii) 1000 Redeemable Non-Convertible Debentures (11.30%) of '' 1,000,000 each , secured by first pari-passu charge on movable and immovable assets of the company and are redeemable at par on Dec 24, 2017.

b) Term-Loans

Rupee Term Loan availed from Indian Renewable Energy Development Authority (IREDA) are secured by first and exclusive charge on the movable and immovable assets of the companies Co-Generation units located at Panchganga and Ajinkyatara.

Term loan from other banks and financial institutions are secured by first pari-passu charge on movable and immovable assets of the company.

From Others:

SDF Loans amounting to '' 667.61 Mn @ 4% p.a., are secured by exclusive second charge on movable and immovable assets of the company.

SDF Loans amounting to '' 312.82 Mn @ 7% p.a., are secured by pari-passu first charge on movable and immovable assets of the company.

Interest Accrued but not due represents interest on certain long-term borrowings, where the payment of interest has also been deferred for a period of time and is therefore considered to be in nature of borrowings and included as a part of secured loans under Long term borrowings.

Unabsorbed business losses have been recognized as deferred tax assets as there is virtual certainty that such deferred tax asset can be realized against future taxable profits in the forthcoming years.

Nature of Security :

Working Capital facilities from Banks are secured by hypothecation of stocks, books debts and other current assets and third charge on movable and immovable fixed assets of the company.

* There is no principal amount and interest overdue to the Micro and Small Enterprises. During the year no interest has been paid to such parties. (This information have been determined to the extent such parties have been identified on the basis of information available with the company.

Note-

1. Note on revaluation of Fixed assets:- Fixed assets are shown at original cost of acquisition less accumulated

depreciation. Fixed Assets have been revalued as on 31.03.2016,the surplus arising from the revaluation has been transferred to "Revaluation Reserves" and shown under the head "Reserves and Surplus". As the Fixed Assets were revalued on the last day of the Balance Sheet, no depreciation has been provided on revalued figures.

* Trade Receivable (over six months) include '' 19.6 Mn (Previous year '' 19.6 Mn) due from Associate company, maximum outstanding '' 767.735 Mn (Previous year '' 718.60 Mn) during the year.

Balances with banks in deposit accounts include amounts that have been provided as margin money or those that have been pledged with government authorities towards guarantees, etc.

* Other Advances include '' Nil (Previous year '' 0.70 Mn) due from an officer of the company, maximum outstanding '' Nil (Previous year '' 1.30 Mn) during the year.

Note 1. Other Notes to the Financial Statements:

i. Excise Duty on Finished Goods

Excise duty is generally provided on manufacture of goods, which are not exempt from the payment of duty. However, since the Company''s finished goods are not segregated at the time of production into those for sale in domestic markets and those for sale in export markets, the Company is unable to determine the exact liability towards excise duty on finished goods. Accordingly, excise duty is provided/ paid only at the time of clearance of the goods from the factory.

vi. Balances appearing under the head trade payables, trade receivables, loans and advances are subject to confirmation, adjustments, if any, on the receipt/reconciliation of such accounts.

vii. In terms of accounting standard AS 28 on impairment of assets, there was no impairment indicators exist as of reporting date as per the internal management estimates done and hence no impairment charge is recognized during the year under review.

xiv. In accordance with Companies (Accounting Standards) Amendment Rules 2009 as amended by Companies (Accounting Standards) (Second Amendment ) Rules 2011 as per AS-11,the Company exercised the option of adjusting exchange differences arising on long term foreign currency monetary items related to acquisition of depreciable capital assets in the cost of assets to be depreciated over the balance life of the assets and other long term monetary item in the "Foreign Currency Monetary Item Translation Difference Account" to be amortized over the period of loan.

Primary Segment Information (by business segments)

Composition of business segment

Segment

(a) Sugar White Sugar, Molasses, Baggasse

(b) Trading Trading of White and Raw Sugar, Coal, Molasses, MG Alcohol (c ) Co-Generation Electricity, Steam, Coal ash, Bagasse ash

(d) Ethanol De-natured Ethanol, Rectified Spirit, De-natured Spirit, Extra-nature Alcohol, Ethanol,

(e) Other Bio-Compost, Press Mud.

Notes :

1. Revenue within India and Outside India are bifurcated based on sales to customers situated in India and Outside India.

2. Segment Assets Investments, Loans and Advances,Trade Receivables and Other assets bifurcated based on situated within India and Outside India.

3. Segment Liabilities, Borrowings, Trade Payables and Other Liabilities bifurcated based on situated within India and Outside India.

xvii. Related Party Disclosures Related parties

(a) Subsidiary Companies

i. Renuka Commodities DMCC, Dubai (UAE)

ii. Parana Global Trading (FZE), Sharjah (UAE)( Operation closed on 06th July 2015)

iii. Shree Renuka Agri Ventures Limited

iv. KBK Chem-Engineering Private Limited

v. Gokak Sugars Limited

vi. Shree Renuka Global Ventures Limited, Mauritius

vii. Lanka Sugar Refinery Company (Private) Limited, Srilanka.

viii. Monica Trading Private Limited

ix. Shree Renuka East Africa Agriventures PLC, Ethiopia.

x. Shree Renuka Tunaport Private Limited

xi. Shree Renuka International PTE, Singapore

(b) Associate Companies

i. Khandepar Investments Private Limited

ii. Vantamuri Trading and Investments Limited

iii. Murkumbi Investments Private Limited

iv. Renuka Energy Resource Holdings (FZE), Sharjah

v. Damodar Resource Holdings (FZE), Sharjah

vi. Ravindra Energy Limited

vii. Agri Venture Trading and Investment Private Limited

viii. Adani Wilmar Limited

ix. Wilmar Sugar Pte Limited

x. Great Wall - Wilmar Holding Limited

(c) Key Managerial Personnel

i. Mrs. Vidya Murkumbi - Executive Chairperson

ii. Mr. Narendra Murkumbi - Vice Chairman and Managing Director

iii. Mr. Vijendra Singh - President and Whole Time Director

iv. Mr. K. K. Kumbhat- Chief Financial Officer

v. Mr. D.V. Iyer- Company Secretary and Compliance Officer. (Till 18th July 2015)

vi. Mr. Naveen Manghani- Company Secretary and Compliance Officer. (From 14th August 2015)

xx. During the year ended 31st March 2015, the Company has revised the useful lives of certain fixed assets as per useful life specified in schedule II of the Companies Act, 2013. Accordingly, the carrying value of fixed assets as on 1st April, 2014, has been depreciated over the revised remaining useful lives. As a result of this change, the net depreciation charge for the year ended 31st March 2015 is lower by '' 136.38 mn. Further, an amount of '' 73.83 mn (Net of deferred tax of '' 38.02 mn) representing the carrying value of assets, whose remaining useful life is Nil, as at 1st April, 2014, has been charged to the opening balance of retained earnings as per the transitional provision prescribed in note 7(b) of Schedule II of the Companies Act, 2013.

xxi. For the payment of managerial remuneration to Mrs. Vidya Murkumbi and Mr Vijendra Singh, Whole time directors of the Company for Financial Year 2014-15, the company has obtained the share holder''s approval by way of special resolution, and permission of the Central government is pending.

xxii. The Company has made an investment in its subsidiary company Shree Renuka Global Ventures Ltd., Mauritius. This investment is stated at its carrying amount of '' 18,245.25 Mn., made by this subsidiary company in the step down subsidiary company Shree Renuka do Brasil Participacoes Ltda. , (SRDBPL). SRDBPL together with all its subsidiaries have filed for Protection on 28th September 2015 under Judicial Recovery (Law 11.101/2005-Recuperacao Judicial) in the designated court in the capital of the State of Sao Paulo, Brazil. SRDBPL along with its subsidiaries has filed the proposal for Reorganization Plan before the designated court. Impairment in the value of investments, if any, will be considered after the receipt of the Judgement of the court.

xxiii. Details of Loan Given, Investments made and Guarantee Given Covered U/S 186 (4) of the Companies Act, 2013

a) Loans given to Subsidiaries for business purpose and disclosed in Note 32 (xviii).

b) Investments made are disclosed in Note 13

c) Corporate Guarantees given by the company in respect of loans as at 31st March 2016

xxiv. Previous year''s figures have been regrouped /rearranged wherever necessary to conform to the current year grouping.

Mar 31, 2015

Note 1. Other Notes to the Financial Statements:

i. Excise Duty on Finished Goods

Excise duty is generally provided on manufacture of goods, which are not exempt from the payment of duty. However, since the Company's finished goods are not segregated at the time of production into those for sale in domestic markets and those for sale in export markets, the Company is unable to determine the exact liability towards excise duty on finished goods. Accordingly, excise duty is provided/ paid only at the time of clearance of the goods from the factory.

ii. Leases Payable

The Company has entered into various operating leases for office, residential and factory premises. These are generally short-term leases and cancellable by serving adequate notice. The minimum amount of lease rentals payable on non- cancelable leases is as follows:

iii. Outstanding Commitments

As at 31st March, 2015, the Company had the following outstanding commitments:

S. Outstanding Commitments As at As at No 31st March, 2015 31st March, 2014

A Bank Guarantee 5,012.00 4,163.18

B Corporate Guarantee 16,238.64 18,475.66

C Estimated amount of contract pending for execution 32.70 42.24

iv. Contingent Liabilities

Liabilities classified and considered contingent due to contested claims

As at As at and legal disputes 31st March, 2015 31st March, 2014 Income Tax Demands 101.29 17.00

Excise and Service Tax Demands 496.70 450.93

Sales Tax/VAT Demands 12.99 36.32

Customs Demand 465.12 465.12

Total: 1,076.10 969.37

v. Balances appearing under the head trade payables, trade receivables, loans and advances are subject to confirmation, adjustments, if any, on the receipt/reconciliation of such accounts.

vi. In terms of accounting standard AS 28 on impairment of assets, there was no impairment indicators exist as of reporting date as per the internal management estimates done and hence no impairment charge is recognized during the year under review.

vii. In accordance with Companies (Accounting Standards) Amendment Rules 2009 as amended by Companies (Accounting Standards) (Second Amendment ) Rules 2011 as per AS-11,the Company exercised the option of adjusting exchange differences arising on long term foreign currency monetary items related to acquisition of depreciable capital assets in the cost of assets to be depreciated over the balance life of the assets and other long term monetary item in the "Foreign Currency Monetary Item Translation Difference Account" to be amortized over the period of loan.

viii. Related Party Disclosures Related parties

(a) Subsidiary Companies

i. Renuka Commodities DMCC, Dubai (UAE)

ii. Parana Global Trading (FZE), Sharjah (UAE)

iii. Shree Renuka Agri Ventures Limited

iv. KBK Chem-Engineering Private Limited

v. Gokak Sugars Limited

vi. Shree Renuka Global Ventures Limited, Mauritius

vii. Lanka Sugar Refnery Company (Private) Limited, Srilanka.

viii. Monica Trading Private Limited (formerly Monica Realators & Investments Private Limited)

ix. Shree Renuka East Africa Agriventures PLC, Ethiopia.

x. Shree Renuka Tunaport Private Limited

xi. Shree Renuka International PTE, Singapore

(b) Associate Companies

i. Khandepar Investments Private Limited

ii. Vantamuri Trading and Investments Limited

iii. Murkumbi Investments Private Limited

iv. Renuka Energy Resource Holdings (FZE), Sharjah

v. Damodar Resource Holdings (FZE), Sharjah

vi. Ravindra Energy Limited (Shree Renuka Energy Limited merged with Ravindra Energy Limited w.e.f. 18th

March 2014) vii. Agri Venture Trading and Investment Private Limited viii. Adani Wilmar Limited* ix. Wilmar Sugar Pte Limited* x. Great Wall - Wilmar Holding* xi. Wilmar Continental*

* Became associate company on 27th May 2014

(c) Key Managerial Personnel

i. Mrs. Vidya Murkumbi Â Executive Chairperson

ii. Mr. Narendra Murkumbi Â Vice Chairman and Managing Director

iii. Mr. Vijendra Singh Â President and Whole Time Director

iv. Mr. K. K. Kumbhat- Chief Financial Ofcer

v. Mr. D.V. Iyer- Company Secretary and Compliance Ofcer.

xix. Derivative instruments and Unhedged foreign currency exposure

(a) Category wise nominal value of derivatives instruments outstanding is as under:

xx. During the year ended 31st March 2015, the Company has revised the useful lives of certain fixed assets as per useful life specified in schedule II of the Companies Act, 2013. Accordingly, the carrying value of fixed assets as on 1st April, 2014, has been depreciated over the revised remaining useful lives. As a result of this change, the net depreciation charge for the year ended 31st March 2015 is lower by Rs.136.38 mn. Further, an amount of Rs. 73.83 mn (Net of deferred tax of Rs. 38.02 mn) representing the carrying value of assets, whose remaining useful life is Nil, as at 1st April, 2014, has been charged to the opening balance of retained earnings as per the transitional provision prescribed in note 7(b) of Schedule II of the Companies Act, 2013.

xxi. For payment of managerial remuneration to Mrs. Vidya Murkumbi and Mr. Vijendra Singh, Whole time directors of the Company, the company has obtained the share holder's approval by way of special resolution, and permission of the Central government is pending

xxii. Details of Loan Given, Investments made and Guarantee Given Covered U/S 186 (4) of the Companies Act, 2013

a) Loans given to Subsidiaries for business purpose and disclosed in Note 33 (xviii).

b) Investments made are disclosed in Note 13

c) Corporate Guarantees given by the company in respect of loans as at 31st March 2015

xxiii. Previous year's figures have been regrouped /rearranged wherever necessary to confirm to the current year grouping. To be read with our report of even date For and on behalf of the Board

Mar 31, 2014

All amounts in million Indian Rupees, unless otherwise stated.

i. Leases Payable

The Company has entered into various operating leases for ofce, residential and factory premises. These are generally short-term leases and cancellable by serving adequate notice. The minimum amount of lease rentals payable/chargeable on non-cancelable leases is as follows:

ii. Leases Receivable

The Company has entered into various operating leases for ofce, residential and factory premises. These are generally short-term leases and cancellable by serving adequate notice. The minimum amount of lease rentals receivable on non-cancelable leases is as follows:

iii. Contingent Liabilities

Liabilities classifed and considered contingent due to contested claims and legal As at As at disputes 31st March,2014 31st March,2013

Income Tax Demands 50.99 5.64

Excise and Service Tax Demands 450.93 464.95

Sales Tax/VAT Demands 36.32 36.32

Customs Demand 465.12 465.12

Total: 1,003.36 972.03

iv. Balances appearing under the head trade payables, trade receivables, loans and advances are subject to confirmation, adjustments, if any, on the receipt/reconciliation of such accounts.

v. In terms of accounting standard AS 28 on impairment of assets, there was no impairment indicators exist as of reporting date as per the internal management estimates done and hence no impairment charge is recognised during the year under review.

vi. In accordance with Companies (Accounting Standards) Amendment Rules 2009 as amended by Companies (Accounting Standards) (Second Amendment ) Rules 2011 as per AS-11,the Company exercised the option of adjusting exchange diferences arising on long term foreign currency monetary items related to acquisition of depreciable capital assets in the cost of assets to be depreciated over the balance life of the assets and other long term monetary item in the "Foreign Currency Monetary Item Translation Diference Account" to be amortised over the period of loan.

vii. Related Party Disclosures Related parties

(a) Subsidiary Companies

i. Renuka Commodities DMCC, Dubai (UAE)

ii. Parana Global Trading (FZE), Sharjah (UAE)

iii. Shree Renuka Agri Ventures Limited

iv. KBK Chem-Engineering Private Limited

v. Gokak Sugars Limited

vi. Nandur Sugars Limited (Ceased to be subsidiary w.e.f. from 09th Dec, 2013)

vii. Shree Renuka Global Ventures Limited, Mauritius

viii. Lanka Sugar Refnery Company (Private) Limited, Srilanka.

ix. Monica Trading Private Limited (formerly Monica Realators & Investments Private Limited )

x. Shree Renuka East Africa Agriventures PLC, Ethiopia.

xi. Shree Renuka Tunaport Pvt. Ltd.

(b) Associate Companies

i. Khandepar Investments Private Limited

ii. Vantamuri Trading And Investments Limited

iii. Murkumbi Investments Private Limited

iv. Shree Renuka Energy Limited

v. Renuka Energy Resource Holdings (FZE), Sharjah

vi. Damodar Resource Holdings (FZE), Sharjah

vii. Ravindra Energy Limited.

viii. Agri Venture Trading and Investment Pvt. Ltd.

(c) Key Managerial Persons

i. Mrs. Vidya Murkumbi

ii. Mr. Narendra Murkumbi

iii. Mr. Nandan Yalgi (Ceased to be a director w.e.f from 20th Feb, 2014)

viii. Mr. Vijendra Singh

xviii. The profit for the year, as Defined u/s 198 of the Companies Act, 1956 is insufcient to pay the contractual managerial remuneration to the whole time directors of the company. In view of the above the Company has obtained Shareholders'' approval by way of postal ballot and the permission from the Central Government in this regard is awaited.

ix. Derivative instruments and Unhedged foreign currency exposure

(a) Category wise nominal value of derivatives instruments outstanding is as under:

- For Hedging currency and interest rate risks:

Mar 31, 2013

I. Excise Duty on Finished Goods

Excise duty is generally provided on manufacture of goods, which are not exempt from the payment of duty. However, since the Company''s finished goods are not segregated at the time of production into those for sale in domestic markets and those for sale in export markets, the Company is unable to determine the exact liability towards excise duty on finished goods. Accordingly, excise duty is provided/paid only at the time of clearance of the goods from the factory.

ii. Leases Payable

The Company has entered into various operating leases for office, residential and factory premises. These are generally short-term leases and cancellable by serving adequate notice. The minimum amount of lease rentals payable on non-cancelable leases is as follows:

- Within a period of one year-Rs.124.96 million (Previous year Rs.124.96 million).

- Period from one year to five years - Rs.499.82 million (Previous year Rs.499.82 million).

- Period from five years and above- Rs.1,814.99 million (Previous Year 1,939.95 million).

- Lease Rent charged to Profit and loss account for the year ended 31st March, 2013 is Rs.125.35 million (Previous Year Rs.157.91 million).

iii. Leases Receivable

The Company has entered into various operating leases for office, residential and factory premises. These are generally short-term leases and cancellable by serving adequate notice. The minimum amount of lease rentals receivable on non-cancelable leases is as follows:

- Within a period of one year - Rs.10.02 million (Previous year Nil).

- Period from one year to five years - Nil (Previous year Nil).

- Period from five years and above - Nil (Previous Year Nil).

- Lease Rent received for the year ended 31st March, 2013 is Rs.5.01 million (Previous Year Nil). iv. Outstanding Commitments

As at 31st March, 2013, the Company had the following outstanding commitments:

- Bank Guarantees outstanding - Rs.2,480.85 million (Previous Year Rs.5,555.00 million).

- Corporate Guarantees outstanding Rs.16,682.00 million (Previous Year Rs.14,096.00 million).

- Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for Rs.55.16 million (Previous year Rs.534.83 million).

iv. Contingent Liabilities

Liabilities classified and considered contingent due to contested claims and As at disputes As at 31st As at March,2013 31stMarch, 2012

Income Tax Demands 5.64 5.64

Excise and Service Tax Demands 464.95 261.25

Sales Tax/VAT Demands 36.32 36.32

Customs Demand 465.12 465.12

Total 972.03 768.33

v. Balances appearing under the head sundry creditors, sundry debtors, loans and advances are subject to confirmation, adjustments, if any, on the receipt/reconciliation of such accounts.

vi. In terms of accounting standard AS 28 on impairment of assets, there was no impairment indicators exist as of reporting date as per the internal management estimates done and hence no impairment charge is recognised during the year under review.

vii. In accordance with Companies (Accounting Standards) Amendment Rules 2009 as amended by Companies (Accounting Standards) (Second Amendment) Rules 2011 as per AS-11,the Company exercised the option of adjusting exchange differences arising on long term foreign currency monetary items related to acquisition of depreciable capital assets in the cost of assets to be depreciated over the balance life of the assets and other long term monetary item in the "Foreign Currency Monetary Item Translation Difference Account"to be amortised over the period of loan.

viii. Related Party Disclosures Related parties

A) Subsidiary Companies

i. Renuka Commodities DMCC, Dubai (UAE)

ii. Parana Global Trading (FZE), Sharjah (UAE) iii. Shree Renuka Agri Ventures Limited iv. KBKChem-Engineering Private Limited v. Gokak Sugars Limited vi. Nandur Sugars Limited vii Shree Renuka Global Ventures Limited, Mauritius viii Lanka Sugar Refinery Company (Private) Limited, Sri lanka ix. Monica Realators & Investments Private Limited

ix. Shree Renuka East Africa Agriventures PLC, Ethiopia xi. Shree Renuka Tunaport Pvt. Ltd.

B) Associate Companies

i. Khandepar Investments Private Limited ii. Vantamuri Trading And Investments Limited

iii. Murkumbi Investments Private Limited

iv. Shree Renuka Energy Limited

v. Renuka Energy Resource Holdings (FZE), Sharjah

vi. Damodar Resource Holdings (FZE), Sharjah

vii Ravindra Energy Limited

viii Agri Venture Trading and Investment Pvt. Ltd.

C) Key Managerial Persons

i. Mrs. Vidya Murkumbi

ii. Mr. Narendra Murkumbi iii. Mr. NandanYalgi iv. Mr. Vijendra Singh

x. a) Previous period''s figures are for 18 months and hence not comparable with current year''s figures which are of 12 months.

b) As the revised schedule VI has became applicable to the company in the current financial year i.e. 2012-13, consequently the figures of the previous year have been regrouped/ reclassified wherever necessary.

Mar 31, 2012

I. Excise Duty on Finished Goods

Excise duty is generally provided on manufacture of goods, which are not exempt from the payment of duty. However, since the Company's finished goods are not segregated at the time of production into those for sale in domestic markets and those for sale in export markets, the Company is unable to determine the exact liability towards excise duty on finished goods. Accordingly, excise duty is provided/paid only at the time of clearance of the goods from the factory.

ii. Leases

The Company has entered into various operating leases for office, residential and factory premises. These are generally short-term leases and cancelable by serving adequate notice. The minimum amount of lease rentals payable on non- cancelable leases is as follows:

- Withina period of one year - Rs 124.96 million (Previous Year Rs 83.63 million)

- Period from one year to five years - Rs 499.82 million (Previous Year Rs 251.63 million)

- Period from five years and above - Rs 1,939.95 million (Previous Year Rs 966.00 million)

- Lease Rent charged to Profit and loss account for the period of 18 months ended March 31, 2012 are Rs 157.91 million (Previous Year Rs 97.69 million).

iii. Outstanding Commitments

As at March 31, 2012, the Company had the following outstanding commitments :

- Bank Guarantees outstanding - Rs 5,555.00 million (Previous Year Rs 320.48 million)

- Corporate Guarantees outstanding - Rs 14,096.00 million (Previous Year Rs 8,137.80 million)

- Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for - Rs 534.83 million (Previous Year Rs 4,109.00 million.)

iv. Balances appearing under the head sundry creditors, sundry debtors, loans and advances are subject to confirmation, adjustments, if any, on the receipt/reconciliation of such accounts.

v. In terms of accounting standard AS 28 on impairment of assets there was no impairment indicators exist as of reporting date as per the internal management estimates done and hence no impairment charge is recognized during the year under review.

Sep 30, 2009

A. The provision for impairment loss, if any, required or

b. The reversal, if any, required of impairment loss recognised in previous periods.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

All amounts in million Indian Rupees, unless otherwise stated

i. Excise Duty on Finished Goods

Excise duty is generally provided on manufacture of goods, which are not exempt from the payment of duty. However, since the CompanyÃs finished goods are not segregated at the time of production into those for sale in domestic markets and those for sale in export markets, the Company is unable to determine the exact liability towards excise duty on finished goods. Accordingly, excise duty is provided/paid only at the time of clearance of the goods from the factory.

ii. Leases

The Company has entered into various operating leases for office, residential and factory premises. These are generally short- term leases and cancelable by serving adequate notice. The minimum amount of lease rentals payable on non-cancelable leases is as follows:

- Within a period of one year - Rs.55.5 million (Previous year Rs.150 million)

- Period from one year to five years - Rs.97.53 million (Previous year Rs.385 million)

iii. Outstanding Commitments

As at September 30, 2009, the Company had the following outstanding commitments:

- Bank Guarantees outstanding - Rs.246 million (Previous year Rs.693 million)

- Corporate Guarantees outstanding Rs.1,981 million (Previous year Rs.898 million)

- Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for - Rs.1,909 million (Previous year Rs.445 million)

iv. Balances appearing under the head sundry creditors, sundry debtors, loans and advances and secured loans are subject to confirmation, adjustments, if any, on the receipt/reconciliation of such accounts.

v. In terms of accounting standard AS 28 on impairment of assets there was no impairment indicators exist as of reporting date as per the internal management estimates done and hence no impairment charge is recognised during the year under review.

vi. List of Small Scale Industrial undertakings to whom the company is due to the extent such parties that have been identified from available information as at September 30, 2009

1. Jain Engineers, Belgaum

2. Inteltech Engineers, Belgaum

3. Spechem Industries Pvt. Ltd., Chennai

4. Ceramic Products Ltd., Khanapur

5. Patil Thermoplastics, Palus

6. R K enterprises, Kolhapur

7 Satish Steel Works, Jalandhar

8. Yashaswi Engineers, Belgaum

9. Techno Trade Links, Belgaum

10. Vidyut Pumps & Allied Products, Shinolli

11. M G Industries, Kolhapur

12. M P Fabricators, Belgaum

13. Shri Yash Enterprises, Belgaum

14. Group Engineers, Sangli

15. Shantaram Machineries Pvt. Ltd., Kolhapur

xv. Related Party Disclosures Related parties

a) Subsidiary Companies

i. Renuka Commodities DMCC, Dubai.

ii. Shree Renuka Southern Africa Holdings (FZC), Sharjah.

iii. Shree Renuka Biofuels Holdings (FZE), Sharjah.

iv. Shree Renuka Agri Ventures Limited.

v. KBK Chem Engineering Private Limited.

vi. Godavari Biofuels Private Limited.

vii. Ratnaprabha Sugars Limited.

viii. Gokak Sugars Limited.

ix. SRSL Ethanol Limited.

x. Shree Renuka Global Ventures Limited, Mauritius

b) Associate Companies

i. Shree Renuka Infra Projects Limited.

ii. Khandepar Investments Private Limited.

iii. Murkumbi Investments Private Limited.

c) Key Managerial Persons

i. Mrs. Vidya Murkumbi

ii. Mr. Narendra Murkumbi

iii. Mr. S.M. Kaluti

iv. Mr. Nandan Yalgi

v. Mr. Nitin Puranik

vi. Mr. G.K. Sood

xvii. Subsequent events after the Balance Sheet date

The company has floated subsidiary in Brazil by name & style Shree Renuka Partipacoes Ltd. through Shree Renuka Global Ventures Ltd., Mauritius as Holding Company on September 18, 2009. Through the Brazilian subsidiary an agreement has been entered into to acquire 100% stake in VALE DO IVAI S.A. ACUCAR E ALCOOL (ÃVDIÃ). The acquired company has got a crushing capacity of 3.1 million tones with 18,000 hectares of land on long lease for cultivation. It also has logistics assets including a share in terminals for storage, loading of sugar and ethanol at port. The value of the enterprise is USD 240 million with an acquisition cost of 100 % equity around 82 million USD and the balance to be repaid as debt in eight years.

xviii. Previous yearÃs figures

Previous yearÃs figures have been regrouped/rearranged wherever considered necessary.

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