Notes to Accounts of Uttam Sugar Mills Ltd.

Mar 31, 2018

Notes to Account

1. SEFASU Term Loan, Soft Loan & CC Under Repayment (except term loan from Co-Operative Banks):

i. Term Loans and CC under repayment from Banks are secured on first pari passu charge by way of Joint Equitable Mortgage on Company''s immovable properties and first charge byway of hypothecation of all movable properties of the Company on pari passu basis, subject to prior charge created /to be created in favour of Company''s Bankers (except Co-operative bank loan) for securing borrowings for working capital requirements of the Company.

ii. Term Loans and CC under repayment from Banks are also secured by third pari-passu charge basis on whole of the current assets (stock, book debts etc.), both present and future.

iii. Term Loans and CC under repayment from Banks are also secured by way of Pledge on pari-passu basis of 34,84,170 Equity Shares in the company held by individual Promoters of the Company viz. M/s. Raj Kumar Adlakha, Rajan Adlakha and Ranjan Adlakha.

iv. Term Loans and CC under repayment from Banks are also guaranteed by Managing Director and two other promoters of the Company (viz. Mr. Rajan Adlakha & Mr. Ranjan Adlakha) and corporate guarantees of three Promoter Companies (viz. Uttam Industrial Engineering Private Limited, Uttam Sucrotech Limited and Lipi Boilers Private Limited).

v. CC Under Repayment is additionally secured by :

• Pledge on pari-passu basis of 60,00,000 Equity Shares held by three promoter companies viz. M/s Uttam Industrial Engineering Pvt. Limited, M/s Uttam Sucrotech Limited and M/s Lipi Boilers Private Limited.

• Joint Equitable Mortgage on the immovable properties situated at H-2, Kaushambi, Ghaziabad owned by a group company, M/s Uttam Housinginfra Limited.

• Corporate Guarantee by two group Companies viz. M/s Uttam Adlakha & Sons Holdings Private Limited and M/s Uttam Housinginfra Limited.

vi. Soft Loan is additionally secured by :

• Joint Equitable Mortgage on the immovable properties situated at H-2, Kaushambi, Ghaziabad owned by a group

company, M/s Uttam Housinginfra Limited.

• Corporate Guarantee by a group Company viz M/s Uttam Housinginfra Limited.

Notes on Financial Statements for the Year Ended 31st March 2018

2. Term Loan from Govt. of India, Sugar Development Fund through IFCI Ltd.:

Term Loan from Govt. of India, Sugar Development Fund through IFCI Ltd is secured by an exclusive second charge on movable assets (except book debts) and Company''s immovable properties.

3. Term Loan from Uttarakhand State Co-Operative Bank Limited:

Term Loan from Uttarakhand State Co-Operative Bank Limited is secured by Residual charge on all movable assets forming part of fixed/block assets both present & future, and Joint Equitable Mortgage on company''s immovable properties situated at Village Libberheri, Roorkee, District Haridwar (Uttarakhand) on Residual Charge basis, and also guaranteed by Managing Director.

4. Term Loan from Zila Sahkari Bank Limited, Ghaziabad:

Term Loan from Zila Sahkari Bank Limited, Ghaziabad is secured on Residual charge basis on movable assets forming part of fixed/block assets, both present & future, and Joint Equitable Mortgage on company''s immovable properties situated at Village Shermau, Tehsil Nakur, District Saharanpur (Uttar Pradesh) on Residual Charge basis, and also guaranteed by Managing Director.

5. Vehicle loans:

Vehicle loans from banks and Non-Banking finance company are secured by way of hypothecation of vehicle financed by them. Terms & Conditions of short term borrowings

1. Non-Fund Based Working Capital Limits from Punjab National Bank & State Bank of India (Working Capital Limits)

a) Working Capital Limits from Banks are secured/to be secured by first pari passu charges by hypothecation of stocks of raw materials, sugar, molasses, other stores and spares and book debts/receivables of the Company both present and future and third pari passu charge on immovable assets of the Company.

b) Working Capital Limits from Banks are also secured by way of Pledge on pari-passu basis of 34,84,170 Equity Shares in the company held by individual Promoters of the Company viz. Mr. Raj Kumar Adlakha, Rajan Adlakha and Ranjan Adlakha.

c) Working Capital Limits from Banks are also guaranteed by Managing Director and two other promoters of the Company (viz. Mr. Rajan Adlakha & Mr. Ranjan Adlakha) and corporate guarantees of three Promoter Companies (viz. Uttam Industrial Engineering Private Limited, Uttam Sucrotech Limited and Lipi Boilers Private Limited).

d) Non-Fund based Cash Credit Facilities from Punjab National Bank is additionally secured by :

• Pledge on pari-passu basis of 60,00,000 Equity Shares held in the Company, held by three promoter companies viz. Uttam Industrial Engineering Private Limited, Uttam Sucrotech Limited and Lipi Boilers Private Limited.

• Joint Equitable Mortgage on the immovable properties situated at H-2, Kaushambi, Ghaziabad owned by a group company, M/s Uttam Housinginfra Limited.

• Also Guaranteed by two group Companies viz. M/s Uttam Adlakha & Sons Holdings Private Limited and M/s Uttam Housinginfra Limited.

2. Cash Credit (Pledge) Limits from Punjab National Bank

a) Cash Credit (Pledge) Limits from Punjab National Bank is secured by way of pledge of warehouse receipt covering sugar stocks in possession of collateral managers appointed by bank.

b) Cash Credit (Pledge) Limits from Punjab National Bank is also guaranteed by Managing Director (Mr. Rajkumar Adlakha) and two other promoters of the Company (viz. Mr. Rajan Adlakha & Mr. Ranjan Adlakha) and corporate guarantees of five Promoter/Group Companies (viz. Uttam Industrial Engineering Private Limited, Uttam Sucrotech Limited, Lipi Boilers Private Limited, Uttam Adlakha & Sons Holdings Pvt. Ltd. & Uttam Housinginfra Limited).

c) Cash Credit (Pledge) Limits from Punjab National Bank is secured /to be secured on the third pari passu charge on immovable assets of the company.

d) Cash Credit (Pledge) Limit from Punjab National Bank is also secured by way of Pledge on pari-passu basis of 94,84,170 Equity Shares in the company held by Promoters of the Company viz. Mr. Raj Kumar Adlakha, Mr. Rajan Adlakha, Mr. Ranjan Adlakha, M/s Uttam Industrial Engineering Private Limited, M/s Uttam Sucrotech Limited and M/s Lipi Boilers Private Limited.

3. Working Capital Demand Loan (WCDL) from State Bank of India

a) Working Capital Demand Loan (WCDL) from State Bank of India is secured by way of pledge of warehouse receipt covering sugar stocks in possession of collateral managers appointed by bank.

b) Working Capital Demand Loan (WCDL) from State Bank of India is also guaranteed by Managing Director and two other promoters of the Company (viz. Mr. Rajan Adlakha & Mr. Ranjan Adlakha).

4. Term Loan (Repair & Maintenance) from Punjab National Bank

Term Loan from Punjab National Bank is secured on residual charge basis on fixed assets of the company, both present & future. The Loan is additionally secured by Joint Equitable Mortgage on the immovable properties situated at H-2, Kaushambi, Ghaziabad owned by a group company, M/s Uttam Housinginfra Limited.

5. Cash credit facility from Uttarakhand State Co-Operative Bank Limited

Cash credit facility from Uttarakhand State Co-Operative Bank Limited is secured by pledge of stocks of sugar at Libberheri Sugar Factory situated at Village Libberheri, Roorkee, District Haridwar.

6. Cash credit facility from Zila Sahkari Bank Limited, Ghaziabad

a. Cash Credit facility for Shermau Unit

Cash Credit facility for Shermau Unit from Zila Sahkari Bank Limited, Ghaziabad is secured by pledge of stocks of sugar at Shermau Sugar Factory situated at Village Shermau, Tehsil Nakur, District Saharanpur, Uttar Pradesh & also guaranteed by Managing Director of the Company.

b. Cash Credit facility for Barkatpur Unit

Cash Credit facility for Barkatpur Unit from Zila Sahkari Bank Limited, Ghaziabad is secured by pledge of stocks of sugar at Barkatpur Sugar Factory situated at Village Barkatpur, Tehsil Nazibabad, District Bijnor, Uttar Pradesh & also guaranteed by Managing Director of the Company.

7. Cash credit facility from Zila Sahkari Bank Limited, Bulandshahr

a. Cash Credit facility for Shermau Unit

Cash Credit facility for Shermau Unit from Zila Sahkari Bank Limited, Bulandshahr is secured by pledge of stocks of sugar at Shermau Sugar Factory situated at Village Shermau, Tehsil Nakur, District Saharanpur, Uttar Pradesh & also guaranteed by Managing Director of the Company.

b. Cash Credit facility for Barkatpur Unit:

Cash Credit facility for Barkatpur Unit from Zila Sahkari Bank Limited, Bulandshahr is secured by pledge of stocks of sugar at Barkatpur Sugar Factory situated at Village Barkatpur, Tehsil Nazibabad, District Bijnor, Uttar Pradesh & also guaranteed by Managing Director of the Company.

Terms & Conditions of Unsecured Loans

Unsecured Loans from related parties shall be repayable after eight years from the date of disbursement of Loan.

Interest will be accrued annually on 31st March every year but is payable on maturity or date of repayment of loan, whichever is earlier.

			(Rs. in Lakhs)
Particulars	As at 31st March, 2018	As at 31st March, 2017	As at 01st April, 2016
(B) Unsecured Loans
- Soft Loan from Uttarakhand State Government	656.68	656.68	656.68
Interest accrued but not due on borrowings	60.17	68.88	104.36
Interest accrued and due on borrowings	346.03	319.76	487.81
Security deposits	269.09	273.34	220.38
Due to directors	4.32	60.40	11.44
Due to scheduled bank (book overdraft)	882.33	227.52	505.57
Supplier''s credit balance against farmer crop loan (refer note no.34 d)	1,346.42	2,585.90	2,496.38
Other Liabilities	606.03	573.67	546.30
Total (ii)	12,846.39	13,021.87	12,737.16
Total (i ii)	17,043.99	16,786.54	16,113.55

Terms & conditions of Preference Shares capital reclassified due to adoption of Ind AS as financial Liabilities, is as under:-

Series-16.50% Non-Cumulative Redeemable Preference Shares

1. Rate of dividend on these Preference shares is 6.50%.

2. The Preference shares are Non-Cumulative with reference to the dividend.

3. The Preference shares shall be redeemed on the call of the Company on or after 1st April, 2023 but not later than 31st March, 2026 by giving 30 days notice.

4. The Preference shareholders will have no voting rights except as provided in the Companies Act, 2013. Series-2 10% Non-Cumulative Redeemable Preference Shares

1. Rate of dividend on these Preference shares is 10%.

2. The Preference shares are Non-Cumulative with reference to the dividend.

3. The Preference shares shall be redeemed on the call of the Company on or after 1st April, 2023 but not later than 31st March, 2026 by giving 30 days notice.

4. The Preference shareholders will have no voting rights except as provided in the Companies Act, 2013.

Terms & Conditions of Unsecured Loan from Uttarakhand State Government

Unsecured Soft Loan from Uttarakhand State Government amounting to Rs. 656.68 lacs and interest accrued & due thereon of Rs.346.03 lacs was repayable in three years in quarterly installments w.e.f. January 2008 however the same continues to unpaid. An application for waiver off such loan is pending with the Government of Uttarakhand.

Notes on Financial Statements for the Year Ended 31st March 2018 Note No.: 34

a. Based upon the information received from vendors regarding their status under the "Micro, Small and Medium Enterprises Development Act, 2006", the relevant Information is provided below:

(Rs. in Lakhs)

Particulars	Current Year	Previous Year
(a) Amount due to Micro, Small and Medium Enterprises as on
i) Principal amount	293.94	203.74
ii) Interest due on above	6.71	6.09
(b) i) Principal amount paid after due date or appointed day during the period	NIL	NIL
ii) Interest paid during the period on (i) above	NIL	NIL
(c) Interest due & payable (but not paid) on principal amounts paid during the period after the due date or appointed day	5.42	NIL
(d) Total interest accrued and remaining unpaid as on	12.80	6.09
(e) Further interest in respect of defaults of earlier years due and payable in current period up to the date when actually paid	NIL	NIL

b. All the Current assets, loans and advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount at which it is stated in the balance sheet.

c. The Company has made an investment of the requisite amount for setting up new projects in the State of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy, 2004 and has accordingly filed application for eligibility under the above policy. However, the State Government has later on terminated the Policy with effect from June 4, 2007 and based on that rejected the application. The Company had filed writ petition before Hon''ble Allahabad high court (Lucknow Bench) for enforcement of the scheme and settlement of incentive claims.

As per the erstwhile incentive policy, the Company claims to be eligible for capital subsidy of Rs. 3847 lakhs (10 % of total investment) and remission/exemption/ reimbursement of taxes, duties & other charges aggregating to Rs. 9277 lakhs, which will be accounted for in the year of final decision of Hon''ble court.

d. Supplier''s credit balance against farmers crop loan appearing under other financial liabilities (note no. 18) represent loan of Rs. 1346.42 lakhs (Previous year Rs. 2585.90 lakhs) from IDBI Bank Ltd to the cane growers under corporate tie up scheme for Crop loans, wherein the Company is acting as ''Business Facilitator'' and the same is backed by indemnity/guarantee of the Company and personal guarantee of the Managing director.

e. Exceptional item represents a sum of nil (Previous year Rs.452.01 lakhs) being society commission relating to sugar season 2015-2016 which was recoverable from the State Government of Uttar Pradesh vide order dated 05th February, 2016, has now been written off during the last year in pursuance of Government order dated 28th December, 2016.

f. For sugar season 2016-2017 financial assistance of Rs.2/- per quintal was granted vide Govt. of Uttarakhand Order No.02/XIV-2/2017/7(6)72013 T.C.-2016 Dtd 03.01.2017, the Company has accounted for an amount of Rs. 117.63 lakhs during the last year (note no. 6). The aforesaid financial assistance has been reduced from cane cost.

g. For sugar season 2015-2016 financial assistance of Rs. 23.30/- per quintal was granted vide Govt. of Uttarakhand Order No.XIV-2/2016/7(6)72013 Dated 08.02.2016, the Company has accounted for an amount of Rs. 914.72 lakhs during the last year. The aforesaid financial assistance has been accounted for Rs. 823.47 lakhs shown under other operating revenue (Note No. 25) & Rs. 91.25 lakhs has been reduced from cane cost.

h. Disclosure in respect of Operating Lease:

The Company has entered into non-cancelable Operating Lease for premises and vehicles and lease rent amounting to Rs.64.75 Lakhs (Previous year Rs. 93.65 Lakhs) have been charged to Statement of Profit & Loss. The future minimum lease payments are as under:-

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Mar 31, 2016

a) Terms & Conditions of Equity Shares

1 The Company has one class of Equity Shares having a par value of Rs.10/- each.

2 Each Shareholder is eligible for one vote per shares held.

3 The Dividend, if any, proposed by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting, except in the case of interim dividend.

4 In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion of their shareholding.

b) Terms & Conditions of Preference Shares (Series - I)

1 Rate of Dividend on these Preference Shares is 6.5% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment on the call of the Company

4 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 2013 (Series - II)

1 Rate of Dividend on these Preference Shares is 10% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment at a premium of Rs.100/-per Share on the call of the Company

4 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 2013

c) There are Nil number of shares (Previous Year Nil) in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiary or associates of the holding company or the ultimate holding company in aggregate.

e) There are Nil number of shares (Previous Year Nil) reserved for issue under option and contracts/commitment for the sale of shares/disinvestment including the terms and amounts.

g) There are no securities (Previous Year no) convertible into Equity/Preferential shares.

h) There are no calls unpaid (Previous Year no) including calls unpaid by Directors and Officers as on balance sheet date.

i) Terms & Conditions of Secured Loans

a) Security Clauses:

1. WCTL, SEFASU Term Loan, Soft Loan and CC Under Repayment (except term loan from CoOperative Banks):-

i. Term Loans and CC under repayment from Banks are secured on first pari passu charge by way of Joint Equitable Mortgage on Company’s immovable properties and first charge by way of hypothecation of all movable properties of the Company on pari passu basis, subject to prior charge created / to be created in favour of Company’s Bankers (except Co-operative bank loan) for securing borrowings for cash credit facilities of the Company.

ii. Term Loans and CC under repayment from Banks are secured on third pari-passu charge basis on whole of the current assets (stock, book debts etc.), both present and future.

iii. Term Loans and CC under repayment from Banks are also guaranteed by Managing Director and two other promoters of the Company (viz. Mr. Rajan Adlakha & Mr. Ranjan Adlakha) and corporate guarantees of three Promoter Companies (viz. Uttam Industrial Engineering Limited, Uttam Sucrotech Limited and Lipi Boilers Private Limited).

iv. Term Loans and CC under repayment from Banks are also secured by way of Pledge on pari-passu basis of 34,84,170 Equity Shares in the company held by individual Promoters of the Company viz. M/s. Raj Kumar Adlakha, Rajan Adlakha and Ranjan Adlakha.

v. CC Under Repayment is additionally secured by :-

a. Corporate Guarantee by two group Companies viz. M/s Uttam Adlakha & Sons Holdings Private Limited and M/s Uttam Housinginfra Limited

b. Pledge on pari-passu basis of 60,00,000 Equity Shares held in the Company, held by three promoter companies viz. M/s Uttam Industrial Engineering Limited, M/s Uttam Sucrotech Limited and M/s Lipi Boilers Private Limited.

c. Joint Equitable Mortgage on the immovable properties situated at H-2, Kaushambi, Ghaziabad owned by group company viz. M/s Uttam Housinginfra Limited.

vi. Soft Loan is additionally secured by :-

a. Corporate Guarantee by group Company viz. M/s Uttam Housinginfra Limited.

b. Joint Equitable Mortgage on the immovable properties situated at H-2, Kaushambi, Ghaziabad owned by group company viz. M/s Uttam Housinginfra Limited.

2. Term Loan from Govt. of India, Sugar Development Fund through IFCI Ltd.:-

Term Loan from Govt. of India, Sugar Development Fund through IFCI Ltd is secured by an exclusive second charge on movable assets (except book debts) and Company’s immovable properties.

3. Term Loan from Uttarakhand State Co-Operative Bank Limited:-

Term Loan from Uttarakhand State Co-Operative Bank Limited is secured by Residual charge on all movable assets forming part of fixed/block assets both present & future, and Joint Equitable Mortgage on company’s immovable properties situated at Village Libberheri, Roorkee, District Haridwar (Uttarakhand) on Residual Charge basis, and also guaranteed by Managing Director.

4. Term Loan from Zila Sahkari Bank Limited, Ghaziabad:-

Term Loan from Zila Sahkari Bank Limited, Ghaziabad is secured on Residual charge basis on movable assets forming part of fixed/block assets, both present & future, and Joint Equitable Mortgage on company’s immovable properties situated at Village Shermau, Tehsil Nakur, District Saharanpur (Uttar Pradesh) on Residual Charge basis, and also guaranteed by Managing Director.

5. Vehicle loans:-

Vehicle loans from banks and Non Banking Finance Company are secured by way of hypothecation of vehicle financed by them.

ii) Terms & Conditions of Unsecured Loans

a) Loans from Related Parties represents Interest Free Unsecured Loans

b) Unsecured Loans from Related Parties shall be repayable after a period of 3 years with the consent of Term Lenders (Banks) covered under Corporate Debt Restructuring (CDR).

iii) Continuing Default as on 31st March 2016 : (Refer Note No. 8)

a) Unsecured Soft Loan from Uttarakhand State Government Rs.656.68 lacs and interest accrued & due thereon of Rs.293.50 lacs appearing in Other Current Liabilities (Note No.8) of Unsecured Loan was repayable in three years in quarterly installments w.e.f. January 2008 and the same is still to be repaid.

Terms & Conditions of Secured Loans - Security Clause For Short Term Borrowings :

1. Cash Credit Facilities [Non-Fund Based Working Capital Limits from Punjab National Bank & State Bank of India, and Fund Based Working Capital Limit from Indian Overseas Bank]

a) Cash Credit Facilities from Banks are secured/to be secured by first pari passu charges by hypothecation of stocks of raw materials, sugar, molasses, other stores and spares and book debts/receivables of the Company both present and future and third pari passu charge on immovable assets of the Company.

b) Cash Credit facilities from Banks are also guaranteed by Managing Director and two other promoters of the Company (viz. Mr. Rajan Adlakha & Mr. Ranjan Adlakha) and corporate guarantees of three Promoter Companies (viz. Uttam Industrial Engineering Limited, Uttam Sucrotech Limited and Lipi Boilers Private Limited).

c) Cash Credit facilities from Banks are also secured by way of Pledge on pari-passu basis of 34,84,170 Equity Shares in the company held by individual Promoters of the Company viz. M/s. Raj Kumar Adlakha, Rajan Adlakha and Ranjan Adlakha.

d) Non-Fund based Cash Credit Facilities from Punjab National Bank is additionally secured by :-

i. Corporate Guarantee by two group Companies viz. M/s Uttam Adlakha & Sons Holdings Private Limited and M/s Uttam Housinginfra Limited.

ii. Pledge on pari-passu basis of 60,00,000 Equity Shares held in the Company, by three promoter companies viz. Uttam Industrial Engineering Limited, Uttam Sucrotech Limited and Lipi Boilers Private Limited.

iii. Joint Equitable Mortgage on the immovable properties situated at H-2, Kaushambi, Ghaziabad owned by group company viz. M/s Uttam Housinginfra Limited.

2. Cash credit facility from Uttarakhand State Co-Operative Bank Limited:-

Cash credit facility from Uttarakhand State Co-Operative Bank Limited is secured by pledge of stocks of sugar at Libberheri Sugar Factory situated at Village Libberheri, Roorkee, District Haridwar.

3. Cash credit facility from Zila Sahkari Bank Limited, Ghaziabad

a. Cash Credit facility for Shermau Unit

Cash Credit facility for Shermau Unit from Zila Sahkari Bank Limited, Ghaziabad is secured by pledge of stocks of sugar at Shermau Sugar Factory situated at Village Shermau, Tehsil Nakur, District Saharanpur, Uttar Pradesh

b. Cash Credit facility for Barkatpur Unit :

Cash Credit facility for Barkatpur Unit from Zila Sahkari Bank Limited, Ghaziabad is secured by pledge of stocks of sugar at Barkatpur Sugar Factory situated at Village Barkatpur, Tehsil Nazibabad, District Bijnor, Uttar Pradesh and also guaranteed by Managing Director of the company.

Mode of Valuation of Inventories:

Inventories of Raw Material, Work-in-Progress, Finished Goods, Stores, Spares Parts,Packing Materials and Renewal Energy Certificate (REC) are valued at lower of Cost or Net Realizable Value. By-Products and residuals are valued at Net Realizable Value.

Cost of Inventories is determined on cost . Cost of Finished Goods and Work - in - Progress has been worked out on absorption cost basis.

4. All the Current Assets, Loans and Advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet.

5. The Company has made an investment of the requisite amount for setting up New Projects in the State of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy,2004 and has accordingly filed application for eligibility under the above policy. However, the State Government has later on terminated the Policy with effect from June 4, 2007 and based on that rejected the application. The Company had filed writ petition before Hon’ble Allahabad high court ( Lucknow Bench ) for enforcement of the scheme and settlement of incentive claims.

As per the erstwhile incentive policy, the Company claims to be eligible for capital subsidy of Rs. 3847 lacs ( 10 % of total investment ) and remission / Exemption / Reimbursement of taxes, duties & other charges aggregating to Rs. 9277 lacs, which will be accounted for in the year of final decision of Hon’ble court.

6. Supplier’s Credit Balance against farmers crop loan appearing under Other Current Liabilities ( Note No. 8 ) represent loan of Rs. 2496.38 lacs (Previous year 2353.18) from IDBI Bank Ltd to the cane growers under Corporate Tie up scheme for Crop loans , wherein the company is acting as ‘Business Facilitator’ and the same is backed by indemnity / guarantee of the company and Personal guarantee of the Managing Director.

7. Disclosure in respect of Operating Lease:

The Company has entered into non-cancelable Operating Lease for premises and lease rent amounting to Rs. 54.35 Lacs (Previous Year Rs. 66.20 Lacs) have been charged to Profit & Loss account. The future minimum lease payments are as under:-

8. In accordance with Accounting Standard (AS)-28 ‘Impairment of Assets’ issued by The Institute of Chartered Accountants of India, the Company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However, no such case was found.

9. Other Current Assets Note No ‘17’ includes interest of Rs. Nil (Previous year Rs.59.54 Lacs) recoverable from Banks in respect of Scheme “ Extending Financial Assistance to Sugar Undertakings 2007” for clearance of cane dues wherein the company has availed term loan of Rs.3365 lacs which has been fully repaid in earlier years, and includes interest of Rs.372.79 Lacs (Previous year 343.09 Lacs) recoverable from Banks in respect of Scheme - “Extending Financial Assistance to Sugar Undertakings 2014” for clearance of cane dues wherein the Company has availed term Loan of Rs.5387 Lacs. Further it includes Rs.110.84 Lacs (Previous year Rs.Nil) recoverable from Banks in respect of Scheme - “ Soft Loan to Sugar Mills 2015” for clearance of cane dues wherein the Company has availed Term Loan of Rs.4582 Lacs.

10. Deferred Tax Assets in respect of Unabsorbed Depreciation Losses & Unabsorbed Business Losses of Rs.14103.80 lacs has been recognized by the Company. The management is of the view that due to increased in sugar recovery supported by cane development activities and rise in sugar prices and initiatives taken by the Government, It has become reasonable that sufficient taxable income will be available against which such deferred tax assets can be realized.

11. In view of improvement in sugar recovery on account of cane development activities carries out by the Company and better sugar prices, which has also resulted in profit during the year, management is certain that the Company would be in a position to generate positive cash flow and profit in future and accordingly the financial result have been prepared on going concern assumption.

12. The company has identified certain fixed assets which are being retired from active use and are being held for disposal as on balance sheet date. Accordingly these assets have been written down to net realizable value, based on best estimates available with the Company and have been disclosed as Other Current Assets under the head ‘Fixed assets held for disposal’.

13. The previous year figures have been re-arranged, regrouped and reclassified wherever necessary and the figures are rounded off to nearest rupee Lacs.

14. Current Financial period is of 9 months commencing from 01.07.2015 to 31.03.2016 while the previous year was for 12 months commenced from 01.07.2014 to 30.06.2015, t

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Jun 30, 2015

A) Terms & Conditions of Equity Shares

1 The Company has one class of Equity Shares having a par value of Rs.10/- each.

2 Each Shareholder is eligible for one vote per shares held.

3 The Dividend, if any, proposed by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting, except in the case of interim dividend.

4 In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion of their shareholding.

b) Terms & Conditions of Preference Shares (Series - I)

1 Rate of Dividend on these Preference Shares is 6.5% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment on the call of the Company

4 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 2013 (Series - II)

1 Rate of Dividend on these Preference Shares is 10% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment at a premium of Rs.100/-per Share on the call of the Company

4 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 2013

c) There are Nil number of shares (Previous Year Nil) in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiary or associates of the holding company or the ultimate holding company in aggregate.

i) Terms & Conditions of Secured Loans a) Security Clauses:

(1) Term Loans from Banks (except Co-operative bank loan) are secured on frst pari passu charge by way of joint equitable mortgage on Company's immovable properties and frst charge by way of hypothecation of all movable properties of the Company on pari passu basis, subject to prior charge created / to be created in favor of Company's Bankers (except Co-operative bank loan) for securing borrowings for working capital requirements of the Company and third charge on pari passu basis on whole of the current assets (stock, book debts etc.) both present & future.

(2) Term Loans from Banks (except Co-operative bank loan) are also guaranteed by Managing Di- rector and two other promoters of the Company and corporate guarantees of three Promoter Companies.

notes on financial statements for the year ended 30th June 2015

(3) Term Loan from banks (except Co Operative Bank Loan) are also secured by way of pledge on parri passu basis of 3484170 (Previous Year 3484170) Equity Shares in the company held by in- dividual promoters of the company viz. Mr. Rajkumar Adlakha, Rajan Adlakha & Ranjan Adlakha.

(4) Term Loan from Govt. of India,Sugar Development Fund through Industrial Finance Corporation of India Ltd. is secured by an exclusive second charge on movable assets (except book debts) and Company's immovable properties.

(5) Term Loan from Uttarakhand State Co-operative Bank Limited is secured on Residual charge basis on all movable assets forming part of fxed / block assets both present & future, situated at Village Libberheri, Distt Haridwar, Uttarakhand and also guaranteed by Managing Director.

(6) Term loan from Zila Sahkari Bank Limited, Ghaziabad is secured on residual charge basis on mov- able assets forming part of fxed/block assets, both present & future, situated at village Shermau, Tehsil Nakur Distt. Saharanpur & also guaranteed by Managing Director.

(7) Vehicle loans from banks are secured by way of hypothecation of vehicle fnanced by them.

ii) Terms & Conditions of Unsecured Loans.

a) Loans from Related Parties represents Interest Free Unsecured Loans.

b) Unsecured Loans from Related Parties shall be repayable after a period of 3 years with the consent of Term Lenders (Banks) covered under Corporate Debt Restructuring (CDR).

iii) Continuing Default as on 30th June 2015 : (Refer Note No. 7)

i) Interest on Term Loans from Banks Rs.543.75 lacs included in Other Current Liabilities was due as on Balance Sheet date and same has been paid upto 8th August 2015

ii) SDF Loan installment of Rs.150 Lacs and interest of Rs.11.97 Lacs included in other current liabilities was due on balance sheet date and has been paid on 8th July'2015.

iii) Unsecured Soft Loan from Uttarakhand State Government Rs.656.68 lacs and interest accrued & due thereon of Rs.273.80 lacs appearing in Other Current Liabilities (Note No.7) of Unsecured Loan was repayable in three years in quarterly installments w.e.f. January 2008 and the same is still to be repaid.

i) Terms & Conditions of Secured Loans - Security Clause

1. Cash Credit from Banks (except Co-operative bank loan) are secured/to be secured by first pari pas- su charges by hypothecation of stocks of raw materials, sugar, molasses, other stores and spares and book debts/receivables of the Company both present and future and third pari passu charge on immovable assets of the Company. Cash Credit from Banks (except Co-operative bank loan) are also guaranteed by Managing Director and two other promoters of the Company and corporate guarantees of three Promoter Companies.

2. SBI, IDBI and IOB Short Term Loans are secured/to be secured as follows :

(i) Secured on first pari passu charge by way of joint equitable montage on company's immovable properties & frst charge by way of hypothecation of all movable properties of the company on pari passu basis & third charge on pari passu basis on whole of the current assets (Stock, Book Debts etc.), both present & future.

(ii) Guaranteed by Managing Director & Two Other Promoters of the Company and corporate guran- tees of four Promoter Companies.

(iii) Secured by way of equitable mortgage of immovable property of Promoter group entity.

3. Cash Credit from banks (except Co Operative Bank Loan) and Short Term Loan are also secured by way of pledge on parri passu basis of 3484170 (Previous Year 3484170) Equity Shares in the company held by individual promoters of the company viz. Mr. Rajkumar Adlakha, Rajan Adlakha & Ranjan Adlakha.

4. Cash Credit facility from Uttarakhand State Co-Operative Bank Limited are secured on pledge of Stocks of sugar at Village Libberheri, Distt Haridwar, Uttarakhand.

5. Cash Credit facility from Zila Sahkari Bank Limited, Ghaziabad are secured on pledge of stocks of sugar at Village Shermau, Tehsil : Nakur, Distt. Saharanpur (U.P.) and also guaranteed by Managing Director of the company.

Continuing Default as on 30th June 2015 :

Short Term Loans of Rs.3381 Lacs from Banks including in Short Term Borrowings was due on Balance Sheet Date out of which Rs.1600 Lacs has been paid upto 12th August 2015.

Mode of Valuation of Inventories:

Inventories of Raw Material, Work-in-Progress, Finished Goods, Stores, Spares Parts,Packing Materials and Renewal Energy Certificate (REC) are valued at lower of Cost or Net Realizable Value. By-Products and re- ideals are valued at Net Realizable Value.

Cost of Inventories is determined on cost. Cost of Finished Goods and Work - in - Progress has been worked out on absorption cost basis.

1. Amount of borrowing cost capitalized to fixed assets during the year is Rs. NIL (Previous Period Rs. 40.98 Lacs).

2. All the Current Assets, Loans and Advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet.

3. The Company has made an investment of the requisite amount for setting up New Projects in the State of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy,2004 and has accordingly fled application for eligibility under the above policy. However, the State Government has later on terminated the Policy with effect from June 4, 2007 and also rejected the application. During the Year Company has fled amended writ petition before Hon'ble Allahabad high court ( Luck now Bench ) for enforcement of the scheme and settlement of incentive claims.

As per the erstwhile incentive policy, the Company claims to be eligible for capital subsidy of Rs. 3847 lacs ( 10 % of total investment ) and remission / Exemption / Reimbursement of taxes, duties & other charges aggregating to Rs. 9277 lacs, which will be accounted for in the year of final decision of Hon'ble court.

4. State Govt. of U.P. vide its Order No. 2970-C.D./46- 3-14-3(48)/98-99 dated 24th December, 2014, and State Govt. of Uttrakhand vide its order No. 04/XIV-2/2015/55/2010-T.C. dated 3rd January 2015 had announced certain fnancial assistance including Rs. 28.60/- per quintal of cane for the sugar season 2014- 15 linked to average selling price of sugar and its by-products during the specified period from 1st October, 2014 to 31st May, 2015 which is to be recommended by the Committee constituted by the Government of Uttar Pradesh / Uttrakhand.

As the average selling price of sugar is significantly lower than the threshold specified in the above announcement, the Company has estimated and accounted for the above financial assistance aggregating to 6703.96 lacs during the year under audit. The aforesaid financial assistance has been included under the Cost of Raw Material Consumed under Note No. 20.

5. For Sugar Season 2013-14 financial assistance of Rs.6/- per quintal and Rs.14/- per quintal of cane subsidy were granted vide Govt. of U.P. Order No. 2195 C.D./46-3-14-3(35)/2013 T.C. dated 9th September, 2014 and Government of Uttrakhand Order No.106/C/B-purchase section/2013-14 dated 16th April 2015 respectively, accordingly, the Company has accounted for an amount of Rs. 1522.65 lacs during the year under review. The aforesaid financial assistances have been accounted for and included under Other Operating Revenue Note No. 18.

6. For Sugar season 2012-13 Government of Uttar Pradesh has reduced the society sugar commission rate vide their letter no.04/2015/620/12.06.2015, from 3% of Fair Remunerative Price of cane to Rs.2/- per quintal on sugar cane, accordingly the Company has accounted for an amount of Rs. 553.73 lacs during the year under review. The aforesaid financial assistances included under Other Operating revenue under Note No. 18.

7. Depreciation for the current year has been aligned to meet the requirements of Schedule -II to the Companies Act, 2013 and accordingly an amount of Rs. 98.17 lacs in relation to the assets whose useful life has already exhausted has been shown under the heading-Exceptional Items in Proof and loss account.

Had the Company continued to charge deprecation based on rates and manner as specified under the erstwhile Schedule XIV to the Companies Act 1956, deprecation expenses and the Loss before Tax for the year ended 30 June 2015 would have been higher by Rs. 1018.21 lacs.

Further, losses and deferred tax liabilities would have been higher by Rs. 1018.21 lacs and Rs. 314.63 lacs respectively and net value of fixed assets as at the date would have been lower by Rs. 1018.21 lacs.

8. Supplier's Credit Balance against farmers crop loan appearing under Other Current Liabilities ( Note No. 7 ) represent loan of Rs.2353.18 lacs (Previous year Nil) from IDBI Bank Ltd to the cane growers under Corporate Tie up scheme for Crop loans , wherein the company is acting as 'Business Facilitator' and the same is backed by indemnity / guarantee of the company and Personal guarantee of the Managing Director.

9. Disclosure in respect of Operating Lease:

The Company has entered into non-cancelable Operating Lease for premises and lease rent amounting to Rs. 66.20 Lacs (Previous Period Rs. 59.45 Lacs) has been charged to Proft & Loss account. The future minimum lease payments are as under:-

10. In accordance with Accounting Standard (AS)-28 'Impairment of Assets' issued by the Institute of Chartered Accountants of India, the Company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However, no such case was found.

11. As per the Accounting Standard (AS)-17 on 'Segment Reporting' issued by The Institute of Chartered Accountants of India, the Company has identified three business segment i.e. Sugar, Cogeneration and Distillery. The relevant disclosure is as under:

12. Other Current Assets Note No. '16' includes interest of Rs. 59.54 Lacs (Previous Period Rs. 59.54 lacs) recoverable from Banks in respect of Scheme - "Extending Financial Assistance to Sugar Undertakings 2007" for clearance of cane dues wherein the Company had availed term loan of Rs. 3365.00 Lacs which has been fully repaid in earlier years, and includes interest of Rs. 343.09 Lacs (Previous Period Rs. 78.78 lacs) recoverable from Banks in respect of Scheme - "Extending Financial Assistance to Sugar Undertakings 2014" for clearance of cane dues wherein the Company had availed term loan of Rs. 5387.00 Lacs.

13. Statement of Expenses during construction period related to Distillery at Barkatpur and Karnataka as on 30th June 2015 given is as under :-

14. Related Party Disclosures:-

In accordance with the requirements of Accounting Standard (AS)-18 on 'Related Party Disclosure' issued by The Institute of Chartered Accountants of India , the names of the related parties where control exist and/or with whom transaction have taken place during the Year and description of relationships as identified and certified by the management are :

A. Parties where control exists NIL

B. Other related parties where transaction have taken place during the Year

i) Key Management Personnel (KMP) :

Sh.Raj Kumar Adlakha - Managing Director (MD)

Sh. Ashok Kumar Agarwal - Executive Director

Relative of Key Management Personnel and their Relationship:

- Smt. Amita Adlakha (Wife of MD)

ii) Enterprises where Significant Influence exists :

- Uttam Industrial Engineering Limited

- Lipi Boilers Pvt. Ltd.

- The Standard Type Foundry Pvt.Ltd.

- Uttam Scratch Limited

- Shubham Sugars Limited

- Uttam Adlakha & Sons Holdings Pvt. Ltd.

- Sekhri Finance & Investment Pvt. Ltd.

- Uttam Sunna Charitable Trust

- New Castle Finance and Leasing Pvt. Ltd.

- Uttam Energy System Ltd.

- Uttam Housinginfra Limited

15. During the Year the company has recognized deferred tax assets of Rs. 2469 lacs on brought forward business losses & unabsorbed depreciation up to 31st March 2015 out of unrecognized deferred tax Assets Rs. 4888 lacs in accordance with the AS-22 on "Accounting of Taxes" issued by The Institute of Chartered Accountants of India on, The Company expects turnaround of sugar sector by view of expected assistance from Govt. and by way of cane development Activities carried out by the company as supported by report issued by Sugar Technical Expert, it has become reasonable that sufficient taxable income will be available against which such deferred tax assets can be realized.

Since the earnings are expected to increase mainly due to higher cane recovery as well as various support measures announced by the Government, the company has recognized deferred tax assets on account of unabsorbed business losses and unabsorbed depreciation to the extent of future reversal of Deferred Tax Liability and virtual certainty in accordance with Accounting Standard (AS) – 22 on 'Accounting for Taxes on Income'.

16. The company has identified certain fixed assets which are being retired from active use and are being held for disposal as on balance sheet date. Accordingly these assets have been written down to net realizable value, based on best estimates available with the Company and have been disclosed as Other Current Assets under the head 'Fixed assets held for disposal'.

17. Due to steep decline in sugar realization and other market factors, the Company is having accumulated losses up to 30.06.2015. However, the promoters of the Company have committed to provide continued financial & operational support to the Company for its successful operation in the foreseeable future and accordingly accompanying financial statement have been prepared based on going concern assumption.

18. The previous period figures have been re-arranged, regrouped and reclassified wherever necessary and the figures are rounded off to nearest rupee Lacs.

19. Current Financial year is of 12 month starting from 01.07.2014 to 30.06.2015 while the previous year was for 15 month starting from 01.04.2013 to 30.06.2014 therefore fgure are not comparable.

---

Jun 30, 2014

1.a) Terms & Conditions of Equity Shares

1 The Company has one class of Equity Shares having a par value of Rs.10/- each.

2 Each Shareholder is eligible for one vote per shares held.

3 The Dividend, if any, proposed by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting, except in the case of interim dividend.

4 In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion of their shareholding.

b) Terms & Conditions of Preference Shares (Series - I)

1 Rate of Dividend on these Preference Shares is 6.5% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment on the call of the Company.

2 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 1956. (Series - II)

1 Rate of Dividend on these Preference Shares is 10% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment at a premium of Rs.100/-per Share on the call of the Company.

4 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 1956.

a) There are Nil number of shares (Previous Year Nil) in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiary or associates of the holding company or the ultimate holding company in aggregate.

b) There are Nil number of shares (Previous Year Nil) reserved for issue under option and contracts/commitment for the sale of shares/disinvestment including the terms and amounts.

c) There are no securities (Previous Year no) convertible into Equity/Preferential shares.

d) There are no calls unpaid (Previous Year no) including calls unpaid by Directors and Officers as on balance sheet date.

e) There is no reserve specifically represented by earmarked investments which can be termed as fund.

f) Terms & Conditions of Secured Loans a) Security Clauses:

3. Term Loans from Banks (except Co-operative bank loan) are secured on first pari passu charge by way of joint equitable mortgage on Company''s immovable properties and first charge by way of hypothecation of all movable properties of the Company on pari passu basis, subject to prior charge created / to be created in favour of Company''s Bankers (except Co-operative bank loan) for securing borrowings for working capital requirements of the Company and third charge on pari passu basis on whole of the current assets (stock, book debts etc.) both present & future.

4. Term Loans from Banks (except Co-operative bank loan) are guaranteed by Managing Director and two other promoters of the Company and corporate guarantees of three Promoter Companies.

5. Term Loans from banks (except Co Operative Bank Loan) are also secured by way of pledge on parri passu basis of 3484170 (Previous Year 19450442) Equity Shares in the Company held by individual promoters of the Company viz. Mr. Raj Kumar Adlakha, Rajan Adlakha & Ranjan Adlakha.

6. Term Loan from Govt. of India, Sugar Development Fund through Industrial Finance Corporation of India Ltd. is secured by an exclusive second charge on movable assets (except book debts) and Company''s immovable properties.

7. Term Loan from Uttarakhand State Co-operative Bank Limited is secured on Residual charge basis on all movable assets forming part of fixed / block assets both present & future, situated at Village Libberhedi, Distt Haridwar, Uttarakhand and also guarenteed by Managing Director.

8. Term loan from Zila Sahkari Bank Limited, Ghaziabad is secured on residual charge basis on movable assets forming part of fixed/block assets, both present & future, situated at village Shermau, Tehsil Nakur Distt. Saharanpur & also guaranteed by Managing Director.

9. Vehicle loans from banks are secured by way of hypothecation of vehicle financed by them.

ii) Terms & Conditions of Unsecured Loans

a) Loans from Related Parties represents Interest Free Unsecured Loans.

b) Unsecured Loans from Related Parties shall be repayable after a period of 3 years with the consent of Term Lenders (Banks) covered under Corporate Debt Restructuring (CDR).

iii) Continuing Default as on 30th June 2014: (Refer Note No. 7)

i) Interest on Term Loans from Banks Rs.255.56 lacs included in Other Current Liabilities was due as on Balance Sheet date and same has been paid upto 28th August 2014.

ii) Unsecured Soft Loan from Uttarakhand State Government Rs.656.68 lacs and interest accrued & due thereon of Rs.247.54 lacs appearing in Other Current Liabilities (Note No.7) of Unsecured Loan was repayable in three years in quarterly instalments w.e.f. January 2008 and the same is still to be repaid.

i) Terms & Conditions of Secured Loans - Security Clause

10. Cash Credit from Banks (except Co-operative bank loan) are secured/to be secured by first pari passu charges by hypothecation of stocks of raw materials, sugar, molasses, other stores and spares and book debts/receivables of the Company both present and future and third pari passu charge on immovable assets of the Company. Cash Credit from Banks (except Co-operative bank loan) are also guaranteed by Managing Director and two other promoters of the Company and corporate guarantees of three Promoter Companies.

11. Punjab National Banks'' short term loan is secured/to be secured as follows:

(i) Secured on first pari passu charge by way of joint equitable mortage on company''s immovable properties & first charge by way of hypothecation of all movable properties of the company on pari passu basis & third charge on pari passu basis on whole of the current assets (Stock, Book Debts etc.), both present & future.

(ii) Secured by way of equitable mortgage of immovable property of Promoter group entity.

12. Cash Credit from banks (except Co Operative Bank Loan & Short Term Loan) are also secured by way of pledge on parri passu basis of 3484170 (Previous Year 19450442) Equity Shares in the company held by individual promoters of the company viz. Mr. Raj Kumar Adlakha, Rajan Adlakha & Ranjan Adlakha.

13. Cash Credit facility from Uttarakhand State Co-Operative Bank Limited are secured on pledge of Stocks of sugar at Village Libberheri, Distt Haridwar, Uttarakhand.

14. Cash Credit facility from Zila Sahkari Bank Limited, Bijnor are secured on pledge of stocks of sugar at Village Barkatpur, Tehsil : Najibabad Distt. Bijnor & also guaranteed by Managing Director.

15. Cash Credit facility from Zila Sahkari Bank Limited, Ghaziabad are secured on pledge of stocks of sugar at Village Shermau, Tehsil : Nakur, Distt. Saharanpur.

* Other Liabilities includes commission on sales, due to employees and employees benefits & Expenses Payable.

Mode of Valuation of Inventories:

Inventories of Raw Material, Work-in-Progress, Finished Goods, Stores, Spares Parts,Packing Materials and Renewal Energy Certificate (REC) are valued at lower of Cost or Net Realisable Value. By-Products and residuals are valued at Net Realisable Value.

Cost of Inventories is determined on cost. Cost of Finished Goods and Work - in - Progress has been worked out on absorption cost basis.

NOTE - 16 : CONTINGENT LIABILITIES AND COMMITMENTS Contingent Liabilities

i) Excise Duty / Sales Tax demands and

show cause notices against which Company / Department has preferred appeals / 2,197.05 1,788.79 filed replies.

ii) Preference Dividend payable on cumulative Redeemable Preference Shares 2,105.07 1,438.60

iii) In respect of pending court cases by/ against ex-employees amount not ascertainable - - at this stage Capital Commitments

i) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 232.90 2,568.47

ii) Letter of Credit in favour of Suppliers 1,012.29 1,374.50 and Bank Guarantees issued TOTAL 5,547.31 7,170.36

17. The company has changed cost formula for computation of cost of stocks of finished goods from weighted average cost (WAC) method to First In First Out (FIFO) method as this gives the closed approximation to current cost flows and is in accordance to the AS-2 "Valuation of Inventories" issued by The Institute of Chartered Accountants of India. This has resulted in increase in value of closing stocks of finished goods - Sugar by Rs.1327.11 Lacs & net loss for the period and debit balance of Profit & Loss account is also lower by the same amount. Had the company followed the WAC method of valuation of finished goods value closing stock of finished goods - Sugar would have been Rs of 46246.31 Lacs, Net Loss for the period would have been Rs 6856.92 Lacs and debit balance of Profit and loss account would have been 20797.55 Lacs.

18. Amount of borrowing cost capitalized to fixed assets during the year is Rs. 40.98 Lacs (Previous Year Rs. Nil Lacs).

19. All the Current Assets, Loans and Advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet.

20. The Company has made an investment of the requisite amount for setting up New Projects in the State of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy, 2004 and has accordingly filed application for eligibility under the above policy, which is still pending. However, the State Government has later on terminated the Policy with effect from June 4, 2007. However, the Company is hopeful to get the benefits under the said policy.

21. In accordance with Accounting Standard (AS)-28 ''Impairment of Assets'' issued by the Institute of Chartered Accountants of India, the Company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However, no such case was found.

22. Other Loans and Advances'' in Note No. ''15'' includes interest of Rs. 59.54 Lacs (Previous Year Rs. 130.20 lacs) recoverable from Banks in respect of Scheme - "Extending Financial Assistance to Sugar Undertakings 2007" for clearance of cane dues wherein the Company had availed term loan of Rs. 3365.00 Lacs which has been fully repaid in earlier years, and includes interest of Rs. 78.78 Lacs (Previous Year Rs. Nil lacs) recoverable from Banks in respect of Scheme - "Extending Financial Assistance to Sugar Undertakings 2014" for clearance of cane dues wherein the Company had availed term loan of Rs. 4857.00 Lacs during the Period.

23. Out of a sum of Rs.44.22 Crores in respect of previously unrecognized deferred tax assets on brought forward unabsorbed business losses, during the Year the company has partially recognized deferred tax assets of Rs. 20.08 Crores in accordance with the AS-22 on "Accounting of Taxes" issued by The Institute of Chartered Accountants of India, as Cane Development Activities carried out by the company and on the basis of a report issued by Sugar Technical Expert, it has become reasonable that sufficient taxable income will be available against which such deferred tax assets can be realized. These earnings are expected to increase mainly due to higher cane recovery.

Further as per the policy adopted by the Company in preceding financial years, the company has recognized deferred tax assets on account of unabsorbed depreciation to the extent of future reversal of Deferred Tax Liability and virtual certainty in accordance with Accounting Standard (AS) - 22 on ''Accounting for Taxes on Income''.

24. The company has identified certain fixed assets which are being retired from active use and are being held for disposal as on balance sheet date. Accordingly these assets have been written down to net realizable value, based on best estimates available with the Company and have been disclosed as Other Current Assets under the head ''Fixed assets held for disposal''.

25. The previous year figures have been re-arranged, regrouped and reclassified wherever necessary and the figures are rounded off to nearest rupee Lacs.

26. Current Financial year is of 15 month starting from 01.04.2013 to 30.06.2014 while the previous year was for 12 month therefore figure are not comparable.

---

Mar 31, 2013

1. During the year, Cogeneration Unit and Distillery Unit at Barkatpur (Distt. Bijnor) have commenced their commercial production in April 2012 and January 2013 respectively. The related trial run costs and pre-operative costs incurred by the units upto the date of commercial production have been allocated to costs of fixed assets in accordance with the Accounting Standard (AS) -10 on Accounting for Fixed Assets'' (Refer Note No. 36).

2. In accordance with the Accounting Standard (AS) - 16 on "Borrowing Costs" the interest on these projects for abnormally delayed period amounting to Rs. 225.93 lacs (Previous Year 799.62 Lacs) has been charged to Profit and loss account.

3. All the Current Assets, Loans and Advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet.

4. ''Exceptional Items'' appearing under previous reporting period represents Differential Cane Price Liability for the Sugar Season 2007-08, Pursuant to the Hon''ble Supreme Court''s Order dated 17th January 2012.

5. The Company has made an investment of the requisite amount for setting up New Projects in the state of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy, 2004 and has accordingly filed application for eligibility under the above policy, which is still pending. However, the State Government has later on terminated the Policy with effect from June 4, 2007. However, the Company is hopeful to get the benefits under the said policy.

6. Disclosure in respect of Operating Lease:

The company has entered into non-cancelable Operating Lease for premises and lease rent amounting to Rs. 33.87 Lacs (Previous Year Rs. 39.69 lacs) have been charged to Profit & Loss account. The future minimum lease payments are as under:-

7. In accordance with Accounting Standard (AS)-28 ''Impairment of Assets'' issued by the Institute of Chartered Accountants of India, the Company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However, no such case was found.

8. ''Other Loans and Advances'' in Note No. ''16'' includes interest of Rs. 130.20 Lacs (Previous Year Rs. 145.40 lacs) recoverable from Banks in respect of scheme - "Extending Financial Assistance to Sugar Undertakings 2007" for clearance of cane dues wherein the Company had availed term loan of Rs. 3365.00 Lacs which has been fully repaid in earlier years.

9. Related Party Disclosures:-

In accordance with the requirements of Accounting Standard (AS)-18 on ''Related Party Disclosure'' issued by The Institute of Chartered Accountants of India , the names of the related parties where control exist and/or with whom transaction have taken place during the Year and description of relationships as identified and certified by the management are:

A. Parties where control exists NIL

B. Other related parties where transaction have taken place during the Year i) Key Management Personnel (KMP) :

Sh.Raj Kumar Adlakha - Managing Director (MD)

Sh.Pasha Biswas - Whole Time Director (Upto 30th May, 2012)

Sh. Ashok Kumar Agarwal - Executive Director

Relative of Key Management Personnel and their Relationship:

- Smt. Amita Adlakha (Wife of MD)

ii) Enterprises where Significant Influence exists :

- Uttam Industrial Engineering Limited

- Lipi Boilers Ltd.

- The Standard Type Foundry Pvt.Ltd.

- Uttam Sucrotech Limited

- Shubham Sugars Limited

- Uttam Adlakha & Sons Holdings Pvt. Ltd.

- Sekhri Finance & Investment Pvt. Ltd.

- Rajan & Sons HUF

- Uttam Distilleries Ltd.

- Uttam Properties (P) Ltd.

10. As per the policy adopted by the Company in immediately preceding financial year, the company has recognized deferred tax assets only on account of unabsorbed depreciation aggregating to Rs. 870.89 lacs to the extent of future reversal of Deferred Tax Liability and virtual certainty in accordance with Accounting Standard (AS) - 22 on Accounting for Taxes on Income''

11. The company has identified certain fixed assets which are being retired from active use and are being held for sale as on balance sheet date. Accordingly these assets have been written down to net realizable value, based on best estimates available with the company and have been disclosed as Other Current Assets under the head ''Fixed assets held for disposal1.

12. The Company concluded a Rights Issue in October, 2012 and raised an aggregate of Rs.2721.21 Lacs with the twin objects of repaying Interest-Free temporary Unsecured Loan of Rs. 675 Lacs and the balance amount of Rs. 1989.56 Lacs towards Financing Long Term Working Capital requirement. Upon allotment of 1,23,69,120 Equity Shares of face value of Rs.10/- at a price of Rs.22/- per share (including Share Premium of Rs.12A per share) on October 27, 2012, the Paid-up Equity Share Capital and Share Premium have been increased by Rs.1236.91 Lacs and Rs. 1484.30 Lacs respectively. These newly allotted Equity Shares rank pari passu in all respect with the existing Equity Shares of the Company. The proceeds of the Rights Issue have been fully utilized as per the objects of Issue mentioned in the Letter of Offer.

13. The previous year figures have been re-arranged, regrouped and reclassified wherever necessary and the figures are rounded off to nearest rupee Lacs.

---

Mar 31, 2012

A) Terms & Conditions of Equity Shares

1 The Company has one class of Equity Shares having a par value of Rs.10/- each.

2 Each Shareholder is eligible for one vote per shares held.

3 The Dividend, if any, proposed by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting, except in the case of interim dividend.

4 In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion of their shareholding.

b) Terms & Conditions of Preference Shares (Series -1)

1 Rate of Dividend on these Preference Shares is 6.5% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment on the call of the Company.

4 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 1956. (Series - II)

1 Rate of Dividend on these Preference Shares is 10% p.a.

2 The Preference Shares are Cumulative with reference to the dividend.

3 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment on the call of the Company

4 The Preference Shareholders will have no voting rights except as provided in the Companies Act, 1956.

c) There are Nil number of shares (Previous Year Nil) in respect of each class in the company held by its holding company or its ultimate holding company including shares held by or by subsidiary or associates of the holding company or the ultimate holding company in aggregate.

e) There are Nil number of shares (Previous Year Nil) reserved for issue under option and contracts/commitment for the sale of shares/disinvestment including the terms and amounts.

f) For the period of five years immediately preceeding the date at which the balance sheet is prepared

g) There are no securities (Previous Year no) convertible into Equity/Preferential shares.

h) There are no calls unpaid (Previous Year no) including calls unpaid by Directors and Officers as on balance sheet date.

i) There is no reserve specifically represented by earmarked investments which can be termed as fund.

Terms & Conditions:

1 Number of Shares issued : 75000 - 10% Cumulative Redeemable Preference Shares of Rs.100/- each to be issued at a premium of Rs.100/-per share.

2 The Preference Shares shall be redeemed after completion of 12 years but not later than 15 years from the date of allotment.

3 The Board of Directors were reviewing the terms and conditions because of which there has been some delay. However, the shares have been allotted on May 30th, 2012.

4 There is sufficient authorised share capital to cover the share capital amount on allotment of shares out of share application money.

5 There is no interest accured on the amount due.

i) Terms & Conditions of Secured Loans

a) Security Clauses:

(1) Term Loans and Funded Interest Term Loans from Banks are secured/to be secured on first pari passu charge by way of joint equitable mortgage on Company's immovable properties and first charge by way of hypothecation of all movable properties of the Company on pari passu basis, subject to prior charge created / to be created in favour of Company's Bankers for securing borrowings for working capital requirements of the Company.

(2) Term Loans and Funded Interest Term Loans from Banks are guaranteed by Managing Director and two other promoters of the Company and corporate guarantees of three Promoter Companies.

(3) Term Loan from Govt, of India,Sugar Development Fund through Industrial Finance Corporation of India Ltd. Is secured / to be secured by an exclusive second charge on movable assets (except book debts) and Company's immovable properties.

(4) Vehicle loans from banks are secured by way of hypothecation of vehicle financed by them.

ii) Terms & Conditions of Unsecured Loans

a) Loans from Related Parties represents Interest Free Unsecured Loans.

b) Unsecured Loans from Related Parties shall be repayable after a period of 3 years with the consent of Term Lenders (Banks) covered under Corporate Debt Restructuring (CDR).

iii) Continuing Default as on 31st March 2012: (Refer Note No. 8)

i) Term Loans from Banks Rs.187.17 included in Current Maturies of Term Loans from Bank was due as on Balance Sheet date and Paid on 3rd April 2012.

ii) Unsecured Soft Loan from Uttarakhand State Government Rs.656.68 lacs included in Current Maturities of Unsecured Loan was repayable in three years in quarterly instalments w.e.f. January 2009 and the same is still to be repaid.

i) Terms & Conditions of Secured Loans - Security Clause

Cash Credit from Banks are secured/to be secured by first pari passu charges by hypothecation/pledge of stocks of raw materials, sugar, molasses, other stores and spares and book debts/receivables of the Company both present and future and third pari passu charge on immovable assets of the Company.Cash Credit from Banks are guaranteed by Managing Director and two other promoters of the Company and corporate guarantees of three Promoter Companies.

ii) Terms & Conditions of Unsecured Loans

a) Loans from Related Parties represents Interest Free Unsecured Loans from Related Parties.

b) Unsecured Loans from Related Parties shall be repaid out proceeds of Proposed Right Issue of the Company.

iii) There is no default as on Balance Sheet date in repayment of Loans and Interest thereon.

Mode of Valuation of Inventories:

Inventories of Raw Material, Work-in-Progress, Finished Goods, Stock-in-Trade, Stores, Spares Parts and Packing Materials are valued at lower of Cost or Net Realisable Value. By-Products and residuals are valued at Net Realisable Value.

Cost of Inventories is determined on weighted average. Cost of Finished Goods and Work in-Progress has been worked out on absorption cost basis.

(Rs.in lacs)

Figures as at Figures as at end of current end of previous Reporting Period Reporting Period

31.03.2012 31.03.2011

NOTE -1 : CONTINGENT LIABILITIES AND COMMITMENTS

Contingent Liabilities

i) Excise Duty / Sales Tax / Income Tax demands and show cause notices against which Company / Department has preferred appeals / filed replies. 2,299.60 676.46

ii) Preference Dividend payable on cumulative

Redeemable Preference Shares 916.39 407.14

iii) In respect of pending court cases by/against ex-employees amount not ascertainable at this stage Capital Commitments

i) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 5,034.61 4,795.55

ii) Letter of Credit in favour of Suppliers 816.99 716.03

TOTAL 9,067.59 6,595.18

2. Amount of borrowing cost capitalized to fixed assets during the year is Rs. NIL Lacs (Previous Year Rs. 840.99 Lacs). The Co-Generation units at Khaikheri (Distt. Muzaffarnagar) and Shermau (Distt. Saharanpur) had been kept in abeyance for non achievment of financial closure and Cogeneration Unit and Distillery Unit at Barkatpur (Distt. Bijnor) are also in process of being set up and are abnormally delayed. Therefore in accordance with the Accounting Standard (AS) - 16 on "Borrowing Costs" the interest on these projects amounting to Rs. 799.62 lacs (Previous Year Rs. 13.17 Lacs) has been charged to Profit and loss account.

3. All the Current Assets, Loans and Advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet.

4. Pursuant to the Hon'ble Supreme Court's Order dated 17th January 2012, Differential Cane Price Liability for the Sugar Season 2007-08 amounting to Rs.2067.46 lacs has been provided for under the head 'Exceptional Items' in Profit & Loss Statement during the year, which was earlier provided for at Rs.110/- per quintal instead of State Advised Price (SAP) of Rs.125/- per quintal in respect of its units situated in the State of Uttar Pradesh.

5. The Company has made an investment of the requisite amount for setting up New Projects in the state of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy,2004 and has accordingly filed application for eligibility under the above policy, which is still pending. However, the State Government has later on terminated the Policy with effect from June 4, 2007. However, the Company is hopeful to get the benefits under the said policy.

6. Sundry Creditors - others includes short term loan of Rs. NIL Lacs (including interest accrued Rs.NIL lacs) (Previous Year Rs. 3860.32 lacs (including interest accrued Rs.20.31 lacs)) from Punjab National Bank under the scheme for loan to farmers against Sugar Cane Receivables wherein the Company is acting as 'Management and Collection Agent'.

7. Disclosure in respect of Operating Lease:

The company has entered into non-cancelable Operating Lease for premises and lease rent amounting to Rs. 39.69 Lacs (Previous Year Rs. 36.88 lacs ) have been charged to Profit & Loss account. The future minimum lease pay- ments are as under:-

8. In accordance with Accounting Standard (AS)-28 'Impairment of Assets' issued by the Institute of Chartered Accountants of India, the Company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However, no such case was found.

9. As per the Accounting Standard (AS)-17 on 'Segment Reporting' issued by The Institute of Chartered Accountants of India, presently there is only one reportable segment i.e. Sugar.

10. Company has availed a term loan of Rs. 3365.00 Lacs (Previous Year Rs.3365.00 Lacs) for payment of cane dues for the season 2006-07 and 2007-08 as per scheme for "Extending Financial Assistance to Sugar Undertakings 2007" issued by Government of India. As per the Scheme the interest charged by the bank on such loan is to be reimbursed by the Government of India. A sum of Rs. 145.40 Lacs was recoverable as on 31st March, 2012 (Previous Year Rs.250.50 lacs), pending reimbursement, the same has been included in 'Other Loans and Advances' in Note No. '16'.

11. The Company's debt had been rescheduled / restructured by Corporate debt Restructuring Empowered group (CDR EG) considering 1st July 2009 as cut off date. The restructuring package has been given effect in accordance with the approvals/ sanctions received from all the term lenders.

12. Related Party Disclosures:-

In accordance with the requirements of Accounting Standard (AS)-18 on 'Related Party Disclosure' issued by The Institute of Chartered Accountants of India , the names of the related parties where control exist and/or with whom transaction have taken place during the Year and description of relationships as identified and certified by the man- agement are :

A. Parties where control exists NIL

B. Other related parties where transaction have taken place during the Year

i) Key Management Personnel (KMP) :

Sh.Raj Kumar Adlakha - Managing Director (MD)

Sh.Pasha Biswas - Whole Time Director

Sh. Ashok Kumar Agarwal - Executive Director (w.e.f. 14,h February, 2012)

Relative of Key Management Personnel and their Relationship:

- Smt. Amita Adlakha (Wife of MD)

ii) Enterprises where Significant Influence exists :

- Uttam Industrial Engineering Limited

- Lipi Boilers Ltd.

- The Standard Type Foundry Pvt.Ltd.

- Uttam Sucrotech Limited

- Shubham Sugars Limited

- Adharshila Capital Services Ltd.

- Pariksha Fin-lnvest-Lease Ltd.

- Uttam Adlakha & Sons Holdings Pvt. Ltd.

(Formerly known as G.M.Colonisers Pvt.Ltd.)

- Sekhri Finance & Investment Pvt. Ltd.

- New Castle Finance & Leasing Pvt. Ltd.

- Rajan & Sons HUF

- Uttam Distilleries Ltd.

13. After considering sufficient availability of raw materials and the sugar inventory available with the company for disposal as well as, the fact that there is a substantial increase in cogeneration capacity backed by agreement for supply of power with State Government and starting of operations of Distillery unit in the beginning of next financial year, resulting into de-risking of the business operations. The Company, out of the total unrecognized Deferred Tax assets on account of unabsorbed business loss and unabsorbed depreciation as a matter of abundant caution has during the year recognized deferred tax assets only on account of unabsorbed depreciation aggregating to Rs.2500 lacs to the extent of future reversal of Deferred Tax Liability and virtual certainty in accordance with Accounting Standard (AS) - 22 on 'Accounting for Taxes on Income'.

14. The financial statements are prepared under the historical cost convention and are in accordance with the requirements of Companies Act, 1956, applicable Accounting Standards and accepted accounting principles including the principle of going concern despite erosion of more than fifty percent of net worth as the promoters have committed to provide continued financial and operational support to the company for its successful operations in the foreseeable future. Also the management expects improvement in the business results in the year ended March 31, 2013 to continue in the foreseeable future primarily due to the fact that there is .substantial increase in cogeneration capacity backed by agreement for supply of power unit with State Government, starting of operations of distillery plant in the beginning of next financial year and better sugar realization, the Financial statements have, therefore, been prepared on going concern basis.

15. The company has identified certain fixed assets which are being retired from active use and are being held for sale as on balance sheet date and the management is confident to dispose off these assets in next financial year. Accordingly these assets have been written down to net realizable value, based on best estimates available with the company and have been disclosed as Other Current Assets under the head 'Fixed assets held for disposal'.

16. The previous year figures have been re-arranged, regrouped and reclassified wherever necessary and the figures are rounded off to nearest rupee lacs.

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Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounting to Rs. 4795.55 Lacs (Previous Period Rs.5069.36 Lacs)

2. Contingent Liabilities not provided for:

a) Bank guarantee in favour of U.P.Pollution Control Board Rs. 17.00 Lacs (Previous Period Rs. 1.00 Lac).

b) Bank guarantee in favour of Deputy Commissioner Commercial Tax, Dehradun Rs.Nil (Previous Period Rs. 22.19 Lacs).

c) Letter of credit in favour of suppliers Rs. 716.03 Lacs (Previous Period Rs.610.39 Lacs).

d) Excise duty / Sales Tax / Income Tax demands and show cause notices aggregating to Rs. 676.46 Lacs (Previous Period Rs.608.62 Lacs) against which company / Department has preferred appeals/filed replies. However in respect of certain notices since there is no present and possible obligation of any kind and based on the legal opinion, the same has not been considered as liability of any kind.

e) In respect of pending court cases by/against ex-employees amount not ascertainable at this stage.

f) Cane Price payable, if any, for the season 2007-08, presently not ascertainable, (Refer Note no. 8(a)).

g) Preference Dividend payable on Cumulative Redeemable Preference Shares Rs. 407.14 lacs (Previous Period Rs. 113.52 lacs).

3. Amount of borrowing cost capitalized to fixed assets during the year is Rs. 840.99 Lacs (Previous Period Rs. 905.30 Lacs).

The Co-Generation units at Khaikheri (Distt. Muzaffarnagar) and Shermau (Distt. Saharanpur) had been kept in abeyance for non achievement of financial closure and the interest thereafter amounting to Rs. 13.17 lacs (Previous Period Rs. 79.35 Lacs)has been charged to Profit and loss account in accordance with the Accounting Standard (AS) - 16 on "Borrowing Costs".

4. All the Current Assets, Loans and Advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet.

5. Advances recoverable in cash or in kind as appearing in schedule no. 10 Rs.5.39 Lacs (Previous Period Rs. 3.78 Lacs) as other advances and also capital advances as appearing in schedule no. 6 of Balance Sheet includes a sum of Rs. 1550.98 Lacs (Previous Period Rs. 1920.29 Lacs) given against purchase of capital goods in ordinary course of business to companies in which some directors of the company are interested as its directors/share- holders.

6. As per the Accounting Standard (AS)-17 on 'Segment Reporting' issued by The Institute of Chartered Accountants of India, presently there is only one reportable segment i.e. Sugar.

7. (a) Consequent to the interim order of the Hon'ble Supreme Court, Company .has accounted for the Sugar Cane purchases liability for the season 2007-08 at Rs.110/- per quintal in respect of its units situated in State of Uttar Pradesh, instead of State Advised Price (SAP) of Rs.125/- per quintal fixed by the Government. Necessary adjustment, if any, will be given effect by the Company in accordance with the final order of Hon'ble Supreme Court in this matter.

(b) Raw material consumed includes Rs. Nil (Previous Period Rs.373.34 lacs) being the differential cane price for the Season 2007-08 paid in accordance with the State Advised Price(SAP) fixed by the State Government of Uttarakhand.

8. The Company has made an investment of the requisite amount for setting up New Projects in the state of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy,2004 and has accordingly filed application for eligibility under the above policy, which is still pending. However, the new State Government has terminated the Policy with effect from June 4,2007 and has expressed its intention to introduce another policy. Company has been legally advised that it is eligible for the benefits under the said policy.

9. Sundry Creditors - others includes short term loan of Rs. 3860.32 Lacs (including interest accrued Rs.20.31 lacs) (Previous Period Rs. 5042.61 lacs (including interest accrued Rs.42.61 lacs)) from Punjab National Bank under the scheme for loan to farmers against Sugar Cane Receivables wherein the Company is acting as 'Management and Collection Agent'.

10. In accordance with Accounting Standard (AS)-28 'Impairment of Assets' issued by the Institute of Chartered Accountants of India, the Company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However no such case was found.

11. Company availed a term loan of Rs. 3365.00 Lacs (Previous Period Rs.3365.00 Lacs) for payment of cane dues for the season 2006-07 and 2007-08 as per scheme for "Extending Financial Assistance to Sugar Undertakings 2007" issued by Government of India. As per the Scheme the interest charged by the bank on such loan is to be reimbursed by the Government of India. A sum of Rs. 250.50 Lacs was recoverable as on 31st March, 201 ^Pre- vious Period Rs.527.21 lacs), pending reimbursement, the same has been included in 'Advance Recoverable in cash or Kind' in Schedule '10'.

12. The Company's debt had been rescheduled / restructured by Corporate debt Restructuring Empowered group (CDR EG) considering 1st July 2009 as cut off date'. The restructuring package has been given effect in accor- dance with the approvals/ sanctions received from all the term lenders.

13. Related Party Disclosures:-

In accordance with the requirements of Accounting Standard (AS)-18 on 'Related Party Disclosure' issued by The Institute of Chartered Accountants of India, the names of the related parties where control exist and/or with whom transaction have taken place during the Year and description of relationships as identified and certified by the management are:

A. Parties where control exists NIL

B. Other related parties where transaction have taken place during the Year

i) Key Management Personnel (KMP):

Sh.Raj Kumar Adlakha - Managing Director (MD)

Sh. Pasha Biswas - Whole Time Director

Relative of Key Management Personnel and their Relationship:

- Smt. Amita Adlakha (Wife of MD)

ii) Enterprises where Significant Influence exists :

- Uttam Industrial Engineering Limited

- Lipi Boilers Ltd.

- The Standard Type Foundry Pvt.Ltd.

- Uttam Sucrotech Limited

- Shubham Sugars Limited

- Adharshila Capital Services Ltd.

- Pariksha Fin-lnvest-Lease Ltd.

- G.M.Colonisers Pvt. Ltd.

- Sekhri Finance Investment Pvt. Ltd.

- New Castle Finance & Leasing Pvt. Ltd.

14. After considering sufficient availability of raw materials and the sugar inventory available with the company for disposal as well as capacity of power, resulting into de-risking of the business operations, the management is confident that there is virtual certainty that sufficient future taxable income will be available against which deferred tax asset on account of unabsorbed business loss amounting to Rs. 4765.11 lacs will be realized in the normal course of business. However, the management, out of abundant caution, has decided to restrict recognition of deferred tax assets on account of unabsorbed business loss during the Year.

15. The figures for the current year comprises twelve months whereas the corresponding previous period figures are for a period of fifteen months from 1st January 2009 to 31st March 2010, as such not comparable. The previous period figures have been re-arranged, regrouped and reclassified wherever necessary.

16. The Other information as required under Paragraphs 3,4 and 4-D of Part-Ill of Schedule VI of the Companies Act, 1956 not given being either Nil or Not Applicable.

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Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounting to Rs.5069.36 Lacs (Previous Period Rs.7988.79 Lacs)

2. Contingent Liabilities not provided for:

a) Bank guarantee in favour of U.P.Pollution Control Board Rs. 1.00 Lac (Previous Period Rs. 1.00 Lac).

b) Bank Guarantee in favour of Chief Director (Sugar) Department of Food and Public Distribution, Ministry of Consumer affairs, New Delhi Rs.Nil (Previous Period Rs. 200.00 Lacs).

c) Bank Guarantee in favour of Deputy Commissioner Commercial Tax, Dehradun Rs.22.19 Lacs (Previous Period Rs.Nil).

d) Letter of credit in favour of suppliers Rs. 610.39 Lacs (Previous Period Rs. 1634.24 Lacs).

e) Excise duty / Sales Tax / Income Tax demands and show cause notices aggregating to Rs. 608.62 Lacs (Previous Period Rs. 770.27 Lacs) against which company / Department has preferred appeals/filed replies. However in respect of certain notices since there is no present and possible obligation of any kind and based on the legal opinion, the same has not been considered as liability of any kind.

f) In respect of pending court cases by/against ex-employees amount not ascertainable at this stage.

g) Cane Price payable, if any, for the season 2007-08, presently not ascertainable, {Refer Note no. 9(a)}.

h) Preference Dividend payable on Cumulative Redeemable Preference Shares Rs. 113.52 lacs.

3. Amount of borrowing cost capitalized to fixed assets during the period is Rs. 905.30 Lacs (Previous Period Rs. 1282.51 Lacs). The Co-Generation units at Khaikheri (Distt. Muzaffamagar) and Shermau (Distt. Saharanpur) had been kept in abeyance for non achievment of financial closure and the interest thereafter amounting to Rs. 79.35 lacs has been charged to Profit and loss account in accordance with the Accounting Standard (AS)-16 on "Borrowing Costs".

4. All the Current Assets, Loans and Advances, in the opinion of the Board, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet.

5. Advances recoverable in cash or in kind as appearing in schedule no. 11 include Rs. Nil (Previous Period Rs. 4.20 Lacs) paid as share application money and Rs. 3.78 lacs (Previous Period Rs. 8.93 lacs) as other advances and also capital advances as appearing schedule no. 5 of Balance Sheet include a sum of Rs. 1920.29 lacs (Previous Period Rs. 1503.91 lacs) given against purchase of capital goods in ordinary course of business to companies in which some directors of the company are interested as its directors/shareholders.

6. Balances of Certain Debtors, Creditors and Loans & Advances are subject to reconciliation and adjustments, if any.

7. As per the Accounting Standard (AS)-17 on Segment Reporting issued by The Institute of Chartered Accountants of India, presently there is only one reportable segment i.e. Sugar.

8. (a) Consequent to the interim order of the Honble Supreme Court, Company has accounted for the Sugar Cane purchases liability for the season 2007-08 at Rs.110/- per quintal in respect of its units situated in State of Uttar Pradesh, instead of State Advised Price (SAP) of Rs.125/- per quintal fixed by the Government. Necessary adjustment, if any, will be given effect by the Company in accordance with the final order of Honble Supreme Court in this matter.

(b) Raw material consumed includes Rs.373.34 lacs being the differential cane price for the Season 2007-08 paid in accordance with the State Advised Price(SAP) fixed by the State Government of Uttarakhand.

9. The Company has made an investment of the requisite amount for setting up New Projects in the state of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy,2004 and has accordingly filed application for eligibility under the above policy, which is still pending. However, the new State Government has terminated the Policy with effect from June 4, 2007 and has expressed its intention to introduce another policy. Company has been legally advised that it is eligible for the benefits under the said policy.

10. Sundry Creditors - others includes short term loan of Rs. 5042.61 Lacs (including interest accrued Rs.42.61 lacs) from Punjab National Bank under the scheme for loan to farmers against Sugar Cane Receivables wherein the Company is acting as Management and Collection Agent.

11. In accordance with Accounting Standard (AS)-28 Impairment of Assets issued by the Institute of Chartered Accountants of India, the Company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However no such case was found.

12. Company availed a term loan of Rs. 3365.00 Lacs (Previous Period Rs.3365.00 Lacs) for payment of cane dues for the season 2006-07 and 2007-08 as per scheme for "Extending Financial Assistance to Sugar Undertakings 2007" issued by Government of India. As per the Scheme the interest charged by the bank on such loan is to be reimbursed by the Government of India. A sum of Rs. 527.21 Lacs was recoverable as on 31st March, 2010, pending reimbursement, the same has been included in Advance Recoverable in cash or Kind in Schedule 11.

13. The Companys debt had been rescheduled / restructured by Corporate debt Restructuring Empowered group (CDR EG) considering 1st July 2009 as cut off date. During the period, the restructuring package has been given effect in accordance with the approvals/ sanctions received from all the term lenders.

14. Related Party Disclosures:—

In accordance with the requirements of Accounting Standard (AS)-18 on Related Party Disclosure issued by The Institute of Chartered Accountants of India, the names of the related parties where control exist and/or with whom transaction have taken place during the Period and description of relationships as identified and certified by the management are :

b) In the absence of Profits during the period, no commission is due/payable to the Managerial Personnel. Hence computation of Commission under section 198 & 309 of the Companies Act, 1956 is not furnished.

c) The remuneration as approved by the Board, paid to the managerial personnel during the period has been considered as the minimum remuneration stipulated under Schedule XIII of the Companies Act,1956.

d) During the period under report, payment of minimum remuneration as per schedule XIII of the Companies Act, 1956 of Rs. 34.93 lacs made to managerial personnel for which the steps are being taken to obtain approval from Central Government.

NOTES:

i) Sales appearing in the Profit & Loss Account also include sale of Bagasse Rs. 481.85 Lacs (Previous Period Rs.837.32 Lacs), sale of Bio Fertilizer Rs. 176 Lacs (Previous Period Rs. 101,75 Lacs) and other sale Rs. 14.63 Lacs (Previous Period Rs. 51.86 Lacs). Sales quantity of Molasses includes wastage of 311 quintal (Previous Period 68564 Quintal)

ii) Production and stock of Sugar includes Brown Sugar (BISS). Production of Power includes captive consumption/ import against power banked of 92216985 KWH (Previous Period 90084925 KWH) and Stocks of Power represent power banked.

iii) Value has been Rounded-Off to the nearest lacs rupee and the quantities have been Rounded-off to the nearest Qtl.

iv) Closing Stock of By Products as appearing in Balance Sheet and Profit & Loss Account include stock of Bagasse Rs. 720.13 Lacs (Previous Period Rs. 116.82 Lacs) and stock of Bio-Fertilizer Rs. 236.69 Lacs (Previous Period Rs. 319.66 Lacs) and other Rs. 59.92 Lacs (Previous Period NIL)

15. During the period, the Company has purchased / imported raw sugar aggregating 7000 MT for Rs. 1176.02 Lacs in terms of advance license issued by the office of Director General of Foreign Trade without payment of Custom Duty. The company is required to complete the export of white sugar aggregating 7000 MT by 6th march 2011. The management is confident of meeting the export obligation of 7000 MT and no loss is foreseen.

16. After considering sufficient availability of raw materials and the sugar inventory available with the company for disposal as well as capacity of power, resulting into de-risking of the business operations, the management is confident that there is virtual certainty that sufficient future taxable income will be available against which deferred tax asset on account of unabsorbed business loss amounting to Rs.4765.11 lacs will be realized in the normal course of business. However, the management, out of abundant caution, has decided to restrict recognition of deferred tax assets on account of unabsorbed business loss during the period.

17. The previous period figures have been re-arranged, regrouped and reclassified wherever necessary.

18. The Other information as required under Paragraphs 3,4 and 4-D of Part-Ill of Schedule VI of the Companies Act, 1956 not given being either Nil or Not Applicable.

19. Additional information as required under Part IV of Schedule VI of the Companies Act, 1956.