Simbhaoli Sugars Ltd.(Old) के अकाउंट के लिये नोट

Mar 31, 2015

Note:

1 The Company has issued 3,200,000 (previous year 3,200,000) 8% Cumulative Redeemable Preference shares (CRPS) of Rs 100 each aggregating Rs. 3,200.00 lacs (previous year Rs. 3,200.00 lacs) for consideration other than cash in aggregate in the last five financial years.

2 Arrears of fixed cumulative dividends on 8% cumulative preference shares as at March 31, 2015 Rs.516.21 lacs (previous year Rs. 260.21 lacs).

3 Rights, preference and restriction attached to shares:

Equity shares of Rs. 10 each:

a) Voting right shall be in same proportion as the capital paid upon such equity share.

b) The dividend proposed by the Board of Directors which is subject to the approval of the shareholders in the Annual General Meeting shall be in the same proportion as the capital paid upon such equity share.

c) In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to capital paid upon such equity share.

8% cumulative redeemable preference shares (CRPS) of Rs. 100 each:

a) Voting right shall be in same proportion as the capital paid upon such preference share since dividend in respect of these CRPS is outstanding of more than two years.

b) The CRPS shall carry a fixed cumulative dividend coupon rate of 8% and shall be redeemed on the expiry of 12 years from the date of allotment i.e. March 26, 2013.

4 Under Simbhaoli Sugars Limited - Employee Stock Option Scheme 2007, the Company has granted :

a) 81,300 options on May 18, 2009 exercisable over a period of three years after vesting on May 18, 2010 at an exercise price of Rs. 39 (including premium of Rs. 29) per option.

b) 5,16,500 options on August 10, 2009 exercisable in three tranches over a period of three years after vesting on August 10, 2010 at an exercise price of Rs. 49 (including premium of Rs. 39) per option.

Note:- No options were exercised during the vesting period therefore balance options have lapsed and have been transferred to the balance in Statement of Profit and Loss during the previous year.

(1) Rs. 124.52 lacs (previous year Rs. 37.42 lacs) transferred to Statement of Profit and Loss.

(2) Government grant received during the previous year towards subsidies.

(3) Transferred to Statement of Profit and Loss.

(4) Rs. 1.23 lacs (previous year Rs. 1.84 lacs) received during the year.

(5) Rs. Nil (previous year Rs. 0.48 lacs) disbursed during the year.

(6) Refer foot note 4 of note 3.1.

(7) Refer note 16.

Includes Rs. 8.62 lacs (previous year Rs. 8.62 lacs) pertaining to land situated at Brijnathpur pending registration in favour of the Company. * Transition adjustment recorded against balance in Statement of Profit and Loss. Refer note 16

** First pari passu charge on pledge of 8,695,900 (previous year 8,695,900) equity shares of the Company in favour of bankers of Simbhaoli Spirits Limited.

# First pari passu charge on pledge of 1,929,655 (previous year 1,929,655) equity shares of the Company in favour of bankers of Simbhaoli Power Private Limited.

@ First pari passu charge on pledge of 27,653,770 (previous year 27,456,690) equity shares of the Company in favour of bankers of Uniworld Sugars Private Limited 45,15,000 (previous year 45,15,000) equity shares have been transferred in favor of the Company and approved by the Board of Directors of Uniworld Sugars Private Limited in the meeting held on March 28, 2013. However, due to shares being in lock in period, the effect has not been taken into the records of the respective depository participants.

* This loan is given under section 186 of the Companies Act, 2013 and for purpose of working capital and discharge of its loan liability.

# Includes pledged with excise authorities and civil courts Rs. 223.47 lacs (previous year Rs. 152.34 lacs)

* Includes interest receivable of Rs. 128.45 lacs (previous year Rs. 1,808.47 lacs) on balance consideration receivable.

# Includes amount due as on March 31, 2015 of Rs. Nil (previous year Rs. 129.11 lacs).

1. In the year 2013, pursuant to the Business Transfer Agreements (BTA) dated January 25, 2013 and subsequent amendments thereto, executed between the Company and Simbhaoli Power Private Limited (SPPL), the Company had transferred the Power Cogeneration divisions at Simbhaoli and Chilwaria with all properties, assets, liabilities, rights and obligations which have vested in the Company for an aggregate consideration receivable of Rs. 15,978.62 lacs. At the year end, the B TA consideration outstanding of Rs. 8,180.15 lacs (previous year Rs. 11,204.33 lacs) is to be discharged in the following manner as laid down under the BTA :

i) Allotment of securities having an aggregate value of Rs. 2,497.96 lacs (previous year Rs. 3,330.61 lacs) in tranches and in the manner agreed to by the SPPL and the Company.

ii) Payment of balance interest bearing liability of Rs. 5,682.19 lacs (previous year Rs. 7,873.72 lacs) in cash on or before the date falling 48 (forty eight) months from the date of BTA, or on achieving the closing in terms of the Joint Venture Agreement with Syndicatum Captive Energy Pte Limited, whichever is earlier. The outstanding consideration payable has been disclosed under other current assets and other non-current assets.

2. The Company has entered into finance lease arrangement with Simbhaoli Power Private Limited for one of the equipments at its Simbhaoli Sugar Division.

All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not in the opinion of the management, have a material effect on results of operations or financial position of the Company.

ii) Arrears of dividend on 8% cumulative preference shares Rs. 516.21 lacs (previous year Rs. 260.21 lacs).

iii) The Company together with its affiliates have to invest Rs. Nil (previous year Rs. 930 lacs) in Uniworld Sugars Private Limited (Joint venture). Also refer note 3.12.

iv) Capital and other commitment The Company has other commitments, for purchase / sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreements in normal course of business. The Company does not have any other long term commitments or material non-cancellable contractual commitments / contracts, which may have a material impact on the financial statements.

3. The Company has facilitated agri loans from certain commercial banks to its sugarcane farmers under the management and collection agreements and provided Corporate Guarantee and post dated cheques as security. These loans were distributed to the farmers against the payment to be made to them against supply of sugarcane to the Company in previous years and the Company facilitating the repayment of these loans along with interest to the banks. Accordingly these loans have been accounted for by the Company as its liability and are shown as "Short term borrowings from banks" as loans repayable on demand. The Company is in discussions with the banks for raising long term loan(s) to retire these liabilities.

4. Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the "The Micro, Small and Medium Enterprises Development Act, 2006" (MSMED) is Rs. 12.09 lacs (previous year Rs. 14.30 lacs). Further interest of Rs. 0.70 lacs (Previous year Rs. Nil) during the year is payable under the terms of MSMED Act, 2006. Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

5. (A) Secured loan

a. Short term borrowings - Loan repayable on demand from banks:

1. Cash Credit facilities* from Commercial Banks of each business division are secured by way of first pari passu charge created by hypothecation of all current assets, both present and future, of the concerned business division of the company. These facilities are collaterally secured by way of third pari passu charge on the entire fixed assets of the Company.

2. Cash credit facilities from Co-operative Banks of each business division are secured by pledge of sugar stocks of the respective business divisions of the Company.

In addition to the above, the credit facilities with banks (i.e. Working Capital and Term Loans including WCTL) excluding SDF loans, Cash Credit from Co-operative banks and loan from STM are additionally secured by following securities:

a. First pari passu charge on pledge of 22.50 lacs equity shares of the Company held by promoters.

b. Pledge of 86,95,500 equity shares of Simbhaoli Spirits Limited held by the Company.

All credit facilities other than SDF Loans, Sugar Technology Mission Loan are guaranteed by Mr. Gurmit Singh Mann, Chairman and Mr. Gurpal Singh, Managing Director of the Company Joint Venture Entity: Uniworld Sugars Private Limited (USPL).

Co-venturer: : ED & F Man Asia Holdings Pte Ltd. (ED & F Man)

Key Management Personnel: Mr.G.M.S.Mann, Mr.Gurpal Singh, Dr.G.S.C.Rao (ceased to be key management personnel w.e.f. September 11, 2013), Mr. Sanjay Tapriya, Ms. Gursimran Kaur Mann and Mr. S.N. Misra (w.e.f. October 8, 2013).

Relatives of Key management personnel:

Mrs. G.R.Lakshmi (wife of Dr.G.S.C.Rao, ceased to be key management personnel w.e.f. September 11, 2013), Mrs. Mamta Tapriya (wife of Mr. Sanjay Tapriya), Mr. B.D.Tapriya (father of Mr. Sanjay Tapriya), Mr. Govind Singh Sandhu (brother of Mr. Gurpal Singh), Mrs. Usha Misra and Mr. Angad Singh (son of Mr. Gurpal Singh).

Enterprise over which key management personnel exercise significant influence:

- Dholadhar Investments Private Limited (enterprise over which Mr.G.M.S.Mann and Ms. Gursimran Kaur Mann exercise significant influence).

- Pritam Singh Sandhu Associates Private Limited (enterprise over which Mr. Gurpal Singh exercises significant influence).

6. Related Party disclosures under Accounting Standard 18

A. Name of related party and nature of related party relationship.

Subsidiaries:

- Simbhaoli Global Commodities DMCC (DMCC).

- Integrated Casetech Consultants Private Limited (ICCPL).

- Simbhaoli Power Private Limited (SPPL).

- Simbhaoli Spirits Limited (SISPL).

- Simbhaoli Specialty Sugars Private Limited (SSSPL) (formerly known as Resham Packaging Private Limited).

7. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting", the Company's primary segments are business segments, viz. Sugar and Alcohol.

B. Geographical segments:

Since the Company's activities/operations are primarily within the country and considering the nature of products it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 2 above the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include income taxes. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two or more segments is allocated to the segments on a reasonable basis.

c) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

# Loss on sale of fixed assets, bad debts and advances written off, provision for doubtful debts and advances and exceptional item.

8. As at March 31, 2015 outstanding export obligation against advance license scheme (ALS) is 11,616 metric tons (previous year 17,897 metric tons). The management is confident that the export obligation shall be fully met and possible loss expected in complying with such obligation has been accounted for in the financial statements.

9. A vessel carrying raw sugar purchased by the Company sank in July 2009 for which an insurance claim was repudiated against cargo insurers. Subsequent to completion of recovery proceedings against ship owner, the Company is continuing to pursue its ongoing legal proceedings against the Cargo insurers for balance claim amount of Rs. 768.96 lacs. However, as abundant caution, management has provided the amount in the financial statement.

10. Exceptional item of Rs. 1,058.36 lacs in the previous year represents write off of inventory shortage arising due to irregularities/ misappropriation committed by certain former senior executives of the Company against whom legal proceedings are in progress.

11. With effect from April 1, 2014, depreciation on the opening block of assets has been provided as per the useful life prescribed in Schedule II of the Companies Act 2013. Consequent thereto, depreciation charge for the year is lower by Rs. 510.56 lacs and depreciation amounting to Rs.169.91 lacs (net of revaluation reserve of Rs. 124.52 lacs) has been adjusted from the opening balance of retained earnings. As regards additions during the year, depreciation has been charged as per the Schedule II of the Act.

12. The Company follows Accounting Standard (AS-22) "Accounting for taxes on income", and in consideration of prudence, has recognised deferred tax asset on unabsorbed depreciation and brought forward business losses, as at March 31, 2015 only to the extent of deferred tax liability on difference between book balance and tax balance of fixed assets of Rs. 8,119.91 lacs (previous year Rs. 8,161.56 lacs) out of total deferred tax assets of Rs. 22,616.59 lacs (previous year Rs. 18,019.03 lacs).

13. (a) The following are the particulars of disputed dues on account of sales tax (trade tax) and excise duty matters that have not been deposited by the Company as at March 31, 2015.

Uniworld Sugars Private Limited is a 50:50 Jointly controlled entity between E D & F Man Holdings BV, The Netherlands (EDFM) and the Company as per the terms set under the Share Subscription and Shareholders Agreement dated January 25, 2011 and subsequent amendments therein (collectively referred to as "Joint Venture Agreements" or "JVA"). The Joint Venture Company (JVC) has been incorporated to undertake the business of refining of sugar and molasses, the cogeneration of power and all other activities ancillary or identical thereto in India and trading of sugar and molasses both within the Indian and overseas markets.

The Company's share of Assets and Liabilities as at March 31, 2015 and Income and Expenditure for the year ended March 31, 2015 (Without elimination of the effect of transactions between the Company and the joint venture) are given below:

There are no dues in respect of income tax, customs duty, wealth tax and cess, which have not been deposited on account of any

* Amount as per demand orders including interest and penalty wherever indicated in order.

(a) A Scheme of Amalgamation of the Company with Simbhaoli Spirits Limited (SISPL), the wholly owned subsidiary company (the Scheme), as approved by the Board of both the companies, was filed with the Hon'ble High Court of Judicature at Allahabad (the Court). With effect from the Appointed Date i.e. the close of the business hours on March 31, 2014 or such other date as may be fixed or approved by the Court, the entire business and undertaking of the Company, shall be and stand transferred to and vested in or be deemed to have been transferred to and vested in SISPL, as a going concern without any further act and deed. The share holders and unsecured creditors of the Company have approved the Scheme on September 20, 2014. The Company and SISPL are in process to seek approval from their respective secured creditors. Pending sanction of the Scheme by the Court, no financial effect has been considered in these financial statements and further, based upon expert advice and pending necessary clarification from Board for Industrial and Financial Reconstruction (BIFR), no requisite steps as applicable to the sick companies have been initiated under the prevailing laws.

(b) The Government of Uttar Pradesh (U.P.) has announced subsidy on sugar cane purchases during the sugar season 2014-15 linked to the average selling price of sugar and its by-products during the period October 1, 2014 to May 31, 2015 to be finalised by a Committee to be constituted by the Government of U.P. Based on the prevailing and expected prices the Company is confident of realising the full subsidy of Rs. 28.60 per quintal aggregating to Rs. 5,742.63 lacs for the year. Pending final determination of the amount of subsidy and interest charge on delayed payments if any, the Company has on a conservative basis accounted for Rs. 4,738.67 lacs for the year in the Statement of Profit & Loss by adjustment of cost of materials consumed. Necessary adjustments would be made on final determination of the amount of subsidy.

(c) Over the last few years, the Company has been incurring cash losses due to which its net worth has been eroded and its current liabilities are significantly higher than its current assets. The Uttar Pradesh based sugar companies have been facing financial difficulties on account of higher sugar cane prices, lower realization of sugar and high finance cost in last 3-4 years. In the previous years, the Company has implemented various initiatives which included business and financial restructuring of its business divisions into new SPVs and planned growth in operations and disinvestments of the shares in such SPVs, etc. for de-risking its businesses and improving its financial position. Also, the State and Central Government, recognizing the importance of the sugar industry are taking necessary steps as in the previous year to strengthen the sugar industry. In view of the above and also considering the Scheme as stated in Note 20 (a) above, these financial results have been prepared by the Company on a going concern basis.

14. Employee Benefits

The Company has classified the various benefits provided to employees as under:-

a) Defined contribution plans:

i) Superannuation fund ii) Provident fund

b) Defined benefits plans

a) Gratuity

b) Com pensatedabsences Earned Leave/Sick Leave/

Casual Leave

15. Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/ disclosure.

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Mar 31, 2014

1. Background

Simbhaoli Sugars Limited (''the Company'') is a public limited company registered with Registrar of Companies, Kanpur Uttar Pradesh on 29 th June 1936. The Company has three sugar complexes - Simbhaoli (western Uttar Pradesh), Chilwaria (eastern Uttar Pradesh) and Brijnathpur (western Uttar Pradesh) having an aggregate crushing capacity of 19,500 TCD. The Company is technology driven with a business mix that spans from refined (sulphurless) sugar, specialty sugars, extra neutral alcohol (ENA), ethanol and bio-manure. The Company is engaged in sugar refining (Defeco Remelt Phosphotation and Ion Exchange technology), high value, niche products (specialty sugars) and clean energy (ethanol). The Company sells international standard refined, pharmaceutical grade and specialty sugars to the retail and bulk institutional consumer segments.

The Company is operating its different businesses through separate subsidiaries/jointly controlled entity, the details are given below:

2. In the previous year, pursuant to the Business Transfer Agreements (BtA) dated January 25, 2013 and subsequent amendments thereto, executed between the Company and Simbhaoli Power Private Limited (SPPL), the Company had transferred the Power Cogeneration divisions at Simbhaoli and Chilwaria with all properties, assets, liabilities, rights and obligations which have vested in the Company for an aggregate consideration of Rs. 15,978.62 lacs. At the year end, the BTA consideration outstanding of Rs.11,204.33 lacs (previous year Rs. 15,466.58 lacs) is to be discharged in the following manner as laid down under the BTA :

i) Allotment of securities having an aggregate value of Rs. 3,330.61 lacs (previous year 7,592.86 lacs) in tranches and in the manner agreed to by the SPPL and the Company.

ii) Payment of balance interest bearing liability of Rs. 7,873.72 lacs (previous year 7,873.72 lacs) in cash on or before the date falling 48 (forty eight) months from the date of BTA, or on achieving the closing in terms of the Joint Venture Agreement, whichever is earlier.

The outstanding consideration payable has been disclosed under other current assets and other non- current assets.

3. The Company has entered into finance lease arrangement with Simbhaoli Power Private Limited for one of the equipments at its Simbhaoli Sugar Division.

Reconciliation of future minimum lease payments and gross investment in the lease and present value of minimum lease payments are as follows:

4. i) Contingent liabilities not provided for: Claims against the Company not acknowledged as debts Rs. 1,065.22 lacs (previous year Rs. 1,035.66 lacs).

All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not in the opinion of the management, have a material effect on results of operations or financial position of the Company.

ii) Arrears of dividend on 8% cumulative preference shares Rs. 260.21 lacs (previous year Rs. 4.21 lacs).

iii) The Company together with its affiliates have to invest Rs. 930 lacs (previous year Rs. 1,740 lacs) in Uniworld Sugars Private Limited (Joint venture).

iv) Capital and other commitment

The Company has other commitments, for purchase/ sales orders which are issued after considering requirements per operating cycle for purchase / sale of goods and services, employee benefits including union agreements in normal course of business. The Company does not have any other long term commitments or material non-cancellable contractual commitments / contracts, which may have a material impact on the financial statements.

5. The Company has facilitated agri loans from certain commercial banks to its sugarcane farmers under the management and collection agreements and provided Corporate Guarantee and PDCs as security. These loans were distributed to the farmers against the payment to be made to them against supply of sugarcane to the company in previous years and the Company facilitating the repayment of these loans along with interest to the banks. Now these loans became due for payment to the banks by the Company as its liability and accordingly these liabilities are shown as "Short term borrowings from banks". The Company is in discussions with the banks for raising long term loan(s) to retire these liabilities.

6. Foreign Currency exposures that are not hedged by derivative instruments or otherwise are as follows:

7. Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the "The Micro, Small and Medium Enterprises Development Act, 2006" (MSMED) is Rs. 14.30 lacs (previous year Rs. 9.31 lacs). Further no interest during the year has been paid or is payable under the terms of MSMED Act, 2006.

8. Secured loan

a. Short term borrowing-Loan repayable on demand from banks:

1. Cash Credit facilities of each business division are secured by way of first pari passu charge created by hypothecation of all current assets, both present and future, of the concerned business division of the company. These facilities are collaterally secured by way of third pari passu charge on the entire fixed assets of the Company.

2. Cash credit facilities from co-operative banks of each business division is secured by pledge of sugar stocks of the respective business division of the Company.

In addition to the above, the credit facilities with banks (i.e. Working Capital and Term Loans including WCTL) excluding SDF loans, Cash Credit from Co-operative banks and loan from STM are additionally secured by following securities:

a. First pari passu charge on pledge of 22.50 lacs equity shares of the Company held by promoters.

b. Pledge of 86,95,500 equity shares of Simbhaoli Spirits Limited held by the Company.

All credit facilities other than SDF Loans, Sugar Technology Mission Loan and Vehicle Loans are guaranteed by Mr. Gurmit Singh Mann, Chairman and Mr. Gurpal Singh, Managing Director of the Company.

9. Detail of loans and advances in the nature of loans, as per clause 32 of Listing Agreement where there is no repayment schedule:

10. Related Party disclosures under Accounting Standard 18

A. Name of related party and nature of related party relationship.

Subsidiaries:

- Simbhaoli Global Commodities DMCC (DMCC).

- Integrated Casetech Consultants Private Limited (ICCPL).

- Simbhaoli Power Private Limited (SPPL).

- Simbhaoli Spirits Limited (SISPL).

Joint Venture: Uniworld Sugars Private Limited (USPL).

Co-venturer: ED & F Man Asia Holdings Pte Ltd. (ED & F Man)

Key Management Personnel: Mr.G.M.S.Mann, Mr.Gurpal Singh, Dr.G.S.C.Rao (ceased to be key management personnel w.e.f. September 11, 2013), Mr. Sanjay Tapriya, Ms. Gursimran Kaur Mann and Mr. S.N. Misra (w.e.f. October 8, 2013).

Relatives of Key management personnel:

Mrs. G.R.Lakshmi (wife of Dr.G.S.C.Rao, ceased to be key management personnel w.e.f. September 11, 2013), Mrs. Mamta Tapriya (wife of Mr. Sanjay Tapriya), Mr. B.D.Tapriya (father of Mr. Sanjay Tapriya), Mr. Govind Singh Sandhu (brother of Mr. Gurpal Singh) and Mr. Angad Singh (son of Mr. Gurpal Singh).

Enterprise over which key management personnel exercise significant influence:

- Dholadhar Investments Private Limited (enterprise over which Mr.G.M.S.Mann and Ms. Gursimran Kaur Mann exercise significant influence).

- Pritam Singh Sandhu Associates Private Limited (enterprise over which Mr. Gurpal Singh exercises significant influence).

B) Transactions with the above parties:

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" notified by the Companies (Accounting Standard) Rules, 2006, the Company''s business segments include: Sugar, Alcohol and Power.

B. Geographical segments:

Since the Company''s activities/operations are primarily within the country and considering the nature of products it deals in, the risks and returns are same and as such there is only one geographical segment. ,

C. Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 1 above the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include income taxes. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two or more segments is allocated to the segments on a reasonable basis.

c) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

The Company has classified the various benefits provided to employees as under:- a) Defined contribution plans:

i) Superannuation fund

ii) Provident fund

During the year, the Company has recognized the following amounts in the Statement of Profit and Loss:

# Indian Assured Lives Mortality (2006-08) Ultimate

* The plan assets are maintained with ICICI Prudential Life Insurance Company Ltd. The details of investments maintained by the ICICI Prudential Life Insurance Company Ltd have not been made available to the Company and have therefore not been disclosed.

The Company''s best estimate of contributions expected to be paid during the annual year beginning after balance sheet date is Rs. 1,336.27 lacs for gratuity and Rs. 246.17 lacs for Compensated absences.

Disclosure relating to present value of defined benefit obligation and fair value of plan assets and net actuarial gain/ loss:-

11. (a) The following are the particulars of disputed dues on account of sales tax (trade tax) and excise duty matters that have not been deposited by the Company as at March 31, 2014.

* Amount as per demand orders including interest and penalty wherever indicated in order.

(b) In the following instances the concerned statutory authority is in appeal against favourable orders received by the Company.

There are no dues in respect of income tax, customs duty, wealth tax, service tax and cess, which have not been deposited on account of any disputes.

12. As at March 31,2014 outstanding export obligation against advance license scheme (ALS) is 17,897 metric tonnes (previous year 22,517 metric tonnes). The management is confident that the export obligation shall be fully met and possible loss expected in complying with such obligation has been accounted for in the financial statements.

13. A vessel carrying 22,500 MT of raw sugar purchased by the Company sank in July 2009 for which an insurance claim for Rs. 4,780 lacs was filed with the insurance company. Following the repudiation of insurance claim by the Cargo insurers, in an arbitrary manner, the Company has initiated legal proceedings against the insurer in India and the vessel owner in London. During the previous year, the Company, in the London proceedings, has accepted and received a part compensation towards the cost of raw sugar. The Company is continuing to pursue the ongoing legal proceedings against the cargo insurer for the balance claim of Rs. 769 lacs. Based on expert advice, management is confident that the proceedings against the insurer would be settled in favour of the Company and no loss would arise in this regard.

14. During the year, shortage of finished goods in the sugar units of the Company amounting to Rs. 1,058.36 lacs have been detected based upon internal enquiries by the Management of the Company relating to certain irregularities by senior executives and the resultant loss has been written off in the books of account and included under the head ''Exceptional Items''. Following its internal policies in this regard, requisite legal actions including termination of employment of these executives for misappropriation of the Company''s assets, financial irregularities and breach of fiduciary duties committed by them have been taken.

15. The Company follows Accounting Standard (AS-22) "Accounting for taxes on income", and in consideration of prudence, has recognised deferred tax asset, as at March 31, 2014 only to the extent of deferred tax liability of Rs. 8,161.56 lacs (previous year Rs. 8,269.92 lacs) on unabsorbed depreciation and brought forward business losses out of total deferred tax assets of Rs.18,019.03 lacs (previous year Rs. 13,170.78 lacs).

16. Disclosure related to Joint venture:

Uniworld Sugars Private Limited is a 50:50 Jointly controlled entity between E D & F Man Holdings BV, The Netherlands (EDFM) and the Company as per the terms set under the Share Subscription and Shareholders Agreement dated January 25, 2011 and subsequent amendments therein (collectively referred to as "Joint Venture Agreements" or "JVA"). The Joint Venture Company (JVA) has been incorporated to undertake the business of refining of sugar and molasses, the cogeneration of power and all other activities ancillary or identical thereto in India and trading of sugar and molasses both within the Indian and overseas markets.

The Company''s share of Assets and Liabilities as at March 31, 2014 and Income and Expenditure for the year ended March 31, 2014 (Without elimination of the effect of transactions between the Company and the joint venture) are given below:

17. (a) The Board of Directors of the Company in their meeting held on March 20, 2014 has approved the Scheme of Amalgamation between Simbhaoli Sugars Limited (Amalgamating Company) and Simbhaoli Spirits Limited, the wholly owned subsidiary company (Amalgamated Company) and their respective shareholders and creditors (the Scheme). The Scheme shall be beneficial to all the stake holders and shall provide greater integration amongst the affairs of the two companies, improve the financial strength, bring in efficiencies in operations and result in optimum utilization of resources, better administration, significant cost savings, rationalization of human resources, improved organizational capabilities and leadership and flexibility of fund raising for future growth and expansions.

As per clause 24 (f) of the Listing Agreement, the Company has filed the draft Scheme with the Stock Exchanges and Securities and Exchange Board of India (SEBI) to seek their consent to the proposed Scheme. With effect from the Appointed Date i.e the close of the business hours on March 31, 2014 or such other date as may be fixed or approved by the High Court and upon the Scheme becoming effective, the entire business and undertaking of Amalgamating Company, shall be and stand transferred to and vested in or be deemed to have been transferred to and vested in the Amalgamated Company, as a going concern without any further act and deed. The Amalgamated Company will be listed with the same stock exchanges as that of Amalgamating Company subject to the approval of the SEBI.

The Amalgamating Company shall be wound up without liquidation as per the scheme. Pending sanction of the scheme, no financial effect has been considered in these financial statements.

(b) The Indian sugar industry particularly in the state of Uttar Pradesh has been facing financial difficulties on account of higher sugar cane prices in prior years, lower realization of sugar and high finance cost. The Company continues to incur cash losses, which has resulted in its Net Worth being fully eroded and its current liabilities being significantly higher than its current assets. The State and Central Governments, having recognized the importance of the sugar industry had taken various steps to strengthen the industry, which includes no increase in cane price for 2013-14 sugar season, remission of society commission, purchase tax and entry tax in the state, subsidy on interest cost on specified loans and consideration of linking the sugarcane price with sugar realizations in ensuing sugar seasons. The Company had also initiated a number of measures which included business and financial restructuring of its business divisions into new SPVs and planned growth in operations and disinvestments of the shares in such SPVs etc. for de-risking its businesses and improving its financial position.

On the basis that the aforesaid Scheme of Amalgamation of the Company as stated in Note 27(a) above, will be successfully completed on approval of the Scheme from the Hon''ble Court of Judicature at Allahabad, these financial statements have been prepared by the Company on going concern basis.

18. Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

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Mar 31, 2013

1. Background

Simbhaoli Sugars Limited (''the Company'') is a public limited company registered with Registrar of Companies, Kanpur Uttar Pradesh on 29th June 1936. The Company has an eight-decade track record of producing top quality sugars. Established in 1933 by Sardar Raghbir Singh Sandhanwalia, Simbhaoli Sugars was amongst the first sugar plants to be set up in north India. The Company has three sugar complexes - Simbhaoli (western Uttar Pradesh), Chilwaria (eastern Uttar Pradesh) and Brijnathpur (western Uttar Pradesh) having an aggregate crushing capacity of 19,500 TCD. The Company is technology driven with a business mix that spans refined (sulphurless) sugar, specialty sugars, extra neutral alcohol (ENA), ethanol, bio-manure and technology consultancy. The Compnay is enganged in sugar refining (Defeco Remelt Phosphotation and Ion Exchange technology), high value, niche products (specialty sugars) and clean energy (ethanol). The Company sells international standard refined, pharmaceutical grade and specialty sugars to the retail and bulk institutional consumer segments.

2. During the year, the Company has taken further steps to implement the business restructuring exercise suggested by the SBI Capital Markets Limited, and approved by Company''s lenders and shareholders. Accordingly, the Company has transferred its existing power co-generation businesses situated at its sugar plants at Simbhaoli and Chilwaria, as an inseparable lot, as going concern on a slump sale basis for a consideration of Rs. 15,978.62 lacs to Simbhaoli Power Private Limited (SPL) {formerly known as Simbhaoli Power Limited}. Further, the Company and Sindicatum Captive Energy Singapore Pte Limited (SCES), a global developer and operator of clean energy projects have entered into a joint venture agreement and SCES has acquired 49% of the share capital of SPL. In addition, SPL will be implementing an expansion plan to enhance the aggregate power generation capacity at these locations from 54 MW to 92 MW with increase in days of operations beyond crushing season.

Pursuant to the Business Transfer Agreements (BTAs) dated January 25, 2013 executed between the Company and SPL, effective from January 26, 2013, the business Undertakings of Simbhaoli Cogen Division (SCD) and Chilwaria Cogen Division (CCD) including all their assets, liabilities, rights and obligations have been transferred to and vested in SPL for are aggregate consideration of Rs. 15,978.62.

a) The assets and liabilities transferred to and vested in SPL, given effect to in these accounts, are as under:-

b) The aggregate consideration of Rs. 15,978.62 lacs is to be discharged in the manner laid down under the respective BTAs:

i) Allotment of 5,12,041 shares of Rs 10 each in SPL at a premium of Rs. 90 per share, aggregating Rs. 512.04 lacs.

ii) Allotment of securities having an aggregate value of Rs. 7,592.86 lacs in tranches and in the manner agreed to by the SPL and the Company.

iii) Payment of balance interest bearing liability of Rs. 7,873.72 lacs in cash on or before the date falling 48 (forty eight) months from the date of BTAs, or on achieving the closings in terms of the Joint Venture Agreement with SCES, whichever is earlier.

The outstanding consideration receivable has been disclosed under Non Current Assets Rs. 2,227.68 lacs and other Current Assets Rs. 13,911.75 lacs including interest receivable of Rs. 672.85 lacs on balance consideration respectively.

c) The resultant excess consideration of 5,469.00 lacs over the book values of Co-generation business transferred has been shown as "Profit on transfer of Power Undertakings" under the head exceptional item in the statement of profit and loss.

d) The Company has made requests to UPPCL for assigning of Power Purchase Agreement(s) (PPA) pertaining to both power divisions to SPL pursuant to the BTAs. Whilst the novation of the PPAs in favour of SPL is pending, in view of the execution of the BTAs, revenue from sale of power for the period commencing from January 26, 2013 to March 31, 2013 has been considered in the financial statements of SPL.

e) The Company has entered into finance lease arrangement with SPL for one of the equipment at its Simbhaoli Sugar Division. Gross investment in the lease at the inception of lease amounting to Rs. 2010.00 lacs has been considered as finance lease receivable against the written down value (WDV) of the equipment of Rs. 1772.41 lacs and consequently Rs. 237.58 lacs has been accounted as "Profit on transfer of assets" under the head exceptional item in the statement of profit and loss.

All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not in the opinion of the management, have a material effect on results of operations or financial position of the Company. ii) Arrear of dividend on 8% cumulative preference shares Rs. 4.21 lacs (previous period Rs. Nil) from March 26, 2013 to March 31, 2013.

3. The Company has facilitated agri loans from certain commercial banks to its sugarcane farmers under the management and collection agreements and provided Corporate Guarantee amounting to Rs. 300 crore to the banks. These loans were distributed to the farmers against the payment to be made to them against supply of sugarcane to the Company and facilitating the repayment of these loans along with interest to the banks.

4. Estimated amount of contracts (net of advances) remaining to be executed on capital account Rs. Nil (previous period Rs. 28.83 lacs). Further, the Company/ Affiliates have to invest of Rs. 1,740 lacs (Previous period Rs. 2,300 lacs) in Uniworld Sugars Private Limited (Joint venture).

5. Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the "The Micro, Small and Medium Enterprises Development Act, 2006" (MSMED) is Rs. 9.31 lacs (previous period Rs. 30.64 lacs). Further no interest during the year has been paid or is payable under the terms of MSMED Act, 2006.

6. Secured loan

a. Short term working capital borrowings from banks:

1. Cash Credit facilities of each business division are secured by way of first pari passu charge created by hypothecation of all current assets, both present and future, of the concerned business division of the company. These facilities are collaterally secured by way of third pari passu charge on the entire fixed assets of the Company.

2. Cash credit facilities from co-operative banks of each business division is secured by pledge of sugar stocks of the respective business division of the Company.

a. First pari passu charge on pledge of 22.50 Lacs equity shares of the company held by promoters.

b. Pledge of 86,95,500 equity shares of Simbhaoli Spirits Limited held by the Company.

All credit facilities other than SDF Loan, Sugar Technology Mission Loan and Vehicle Loans are guaranteed by Chairman & Managing Director and Deputy Managing Director of the Company.

7. Revenue expenditure on research and development Rs. Nil (previous period Rs. 14.18 lacs).

8. Related Party disclosures under Accounting Standard 18

A. Name of related party and nature of related party relationship.

Subsidiaries:

Simbhaoli Global Commodities DMCC (DMCC), Integrated Casetech Consultants Private Limited (ICCPL) with effect from November 29, 2010 Simbhaoli Power Private Limited (SPL) with effect from June 21, 2011 (formerly Simbhaoli Power Limited) Simbhaoli Spirits Limited (SISPL) with effect from April 04, 2011

Uniworld Sugars Private Limited (USPL) with effect from February 25, 2011 and upto March 20, 2012.

Joint Venture: Uniworld Sugars Private Limited (USPL) with effect from March 21, 2012

Co-venturer: ED & F Man Holdings BV (ED & F Man) with effect from March 21, 2012

Key Management Personnel: Mr.G.M.S.Mann, Mr.Gurpal Singh, Dr.G.S.C.Rao, Mr. Sanjay Tapriya and Ms. Gursimran Kaur Mann with effect from March 24, 2011.

Relatives of Key management personnel:

Mrs. G.R.Lakshmi (wife of Dr.G.S.C.Rao), Mrs. Mamta Tapriya (wife of Mr. Sanjay Tapriya), Mr. B.D.Tapriya (father of Mr. Sanjay Tapriya), Mr. Govind Singh Sandhu (brother of Mr. Gurpal Singh) and Mr. Angad Singh (son of Mr. Gurpal Singh).

Enterprise over which key management personnel exercise significant influence:

Dholadhar Investments Private Limited (enterprise over which Mr.G.M.S.Mann and Ms. Gursimran Kaur Mann exercises significant influence).

Pritam Singh Sandhu Associates Private Limited (enterprise over which Mr. Gurpal Singh exercises significant influence).

Uniworld Sugars Private Limited (enterprise over which Mr. Sanjay Tapriya and Dr.G S C Rao exercise significant influence upto February 24, 2011).

9. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" notified by the Companies (Accounting Standard) Rules, 2006, the Company''s business segments include: Sugar, Alcohol and Power.

B. Geographical segments:

Since the Company''s activities/operations are primarily within the country and considering the nature of products it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 1 above the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include income taxes. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two or more segments is allocated to the segments on a reasonable basis.

c) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

10. (a) The following are the particulars of disputed dues on account of sales tax (trade tax) and excise duty matters that have not been deposited by the Company as at March 31, 2013.

There are no dues in respect of income tax, customs duty, wealth tax, service tax and cess, which have not been deposited on account of any disputes.

11. As at March 31, 2013 outstanding export obligation against advance license scheme (ALS) is 22,517 metric tonnes (previous period 2,891 metric tonnes). The management is confident that the export obligation shall be fully met and no loss is foreseen in complying with such obligation.

12. A vessel carrying 22,500 MT of raw sugar purchased by the Company sank in July 2009 for which an insurance claim for Rs. 4,780 lacs was filed with the insurance company. Following the repudiation of insurance claim by the Cargo insurers, in an arbitrary manner, the Company has initiated legal proceedings against the insurer in India and the vessel owner in London. During the current year, the Company, in the London proceedings, has accepted and received a part compensation towards the cost of raw sugar. The Company is continuing to pursue the ongoing legal proceedings against the cargo insurer for the balance claim of Rs. 769 lacs. Based on expert advice, management is confident that the proceedings against the insurer would be settled in favour of the Company and no loss would arise in this regard.

13. The Company''s net worth has been substantially eroded, and the Company has made cash losses during the previous period ended March 31, 2012 and the current year ended March 31, 2013. During the last three years the Indian sugar industry faced difficulties on account of lower realization of sugar, and higher sugar cane prices particularly sugar mills located in Uttar Pradesh. During the current sugar season also, the country had the large surplus of sugar in a decontrolled sugar sale scenario with unrestricted imports resulting in lower sugar realization, under recovery of cost of production and higher finance cost leading to operating/ cash loss and consequent further erosion of the Company''s net worth. The State and Central Governments have initiated un- remunerative price and further steps are under consideration like linking the sugar cane price with sugar sale values, improving long term hedging mechanism of sugar and encouragement of further investment in sector by the State Government.

The Company has implemented a number of measures during the previous years and current year which included business and financial restructuring of its business divisions comprising of transfer of potable alcohol and power undertakings of the Company to separate SPVs, disinvestments of the shares in such SPVs, fresh capital infusion and Company''s foray into sugar refining business in joint venture with a global major etc. to de-risk its businesses and improving its financial position. The transfer of potable alcohol undertaking, formation of joint venture for sugar refining business and transfer of cogeneration business to SPL and induction of a JV partner therein, has been completed during 2012-13. On the basis of successful completion of its aforesaid business and financial restructuring initiatives, the outcome of the steps being initiated by the State and Central Governments for the sugar industry, the Management of the Company is confident on the Company''s ability to generate sufficient cash flows to meet its future obligations. Accordingly, these financial statements have been prepared by the Company on a going concern basis.

14. The Company follows Accounting Standard (AS-22) "Accounting for taxes on income", and in consideration of prudence, has recognised deferred tax asset, as at March 31, 2013 only to the extent of deferred tax liability of Rs. 8,269.92 lacs on unabsorbed depreciation and brought forward business losses out of total deferred tax assets of Rs. 13,170.78 lacs.

15. The Scheme of Arrangement (SOA) between the Company and Simbhaoli Spirits Limited (SISPL) under Section 391 to 394 of the Companies Act, 1956 was sanctioned by the Hon''ble High Court of Judicature at Allahabad vide its Order dated September 17, 2012. The SOA became effective on September 20, 2012, on filing of the certified copy of the Order of the High Court with the Registrar of Companies, Uttar Pradesh. Consequent thereto, the effect of SOA was given in the financial statements for the period ended March 31, 2012, Accordingly:

a) The undertaking of Simbhaoli Distillery Division (SDD) including all assets, land admeasuring 28.16 acres being the land required for alcohol business on which the undertaking was located, liabilities, rights, obligations and brands of the Company, without any further act or deed have been transferred to and vested in SISPL as a going concern with effect from October 1, 2010, the Appointed date.

c) SISPL has allotted 17,000,000 equity shares of the face value of Rs.10 at a premium of Rs. 70 each credited as fully paid-up to the Company. The resultant excess of consideration over the book values of SDD undertaking transferred, amounting to Rs. 11,817.37 lacs has been shown as "Profit on transfer of SDD Undertaking" in the statement of profit and loss for the period ended March 31, 2012.

d) Subsequent to the scheme being sanctioned on September 17, 2012, the Company was in the process of taking approvals from the concerned authorities for transfer of various licenses in the name of SISPL. These licenses have been renewed in the name of SISPL w.e.f. April 1, 2013. In view of the same, the books of account of the Company for the year ended March 31, 2013 includes transactions of SISPL for the same period. Following exclusions in respect of the operations of the SISPL for the above mentioned period have been made for the purposes of these accounts, since the said business, during this period, was being run and managed in trust by the Company on behalf of SISPL.

e) The Company has set-off deferred tax assets recognized in respect of brought forward business losses / unabsorbed deprecation aggregating Rs. 6,759.99 lacs against the Securities Premium Account amounting to Rs. 6,759.99 lacs appearing in the books of account as on October 1, 2010, the appointed date.

f) Post hiving off, SISPL has chalked out its growth plans which include adding new products, increasing the capacities by adding the grain spirit plant and new bottling lines. At the same time, the Company has initiated discussions with strategic investors for disinvestment in SISPL as a part of its business restructuring exercise. On these accounts and on the specific request of SISPL, the Company has transferred the additional land admeasuring 56.67 acres contiguous to alcohol undertaking of SISPL under a Deed of Transfer dated March 26, 2013 at a sales consideration of Rs. 11,800 lacs. The sales consideration for the aforesaid land has been determined on the basis of report of an independent valuer after taking into account government notifies rates/prevailing market rates, proximity of location National Capital Region (NCR) availability of infrastructure, potential and permitted use of land for alcohol business. SISPL has allotted 1,47,50,000 fully paid equity shares of Rs 10 each, at a premium of Rs 70 per share aggregating Rs 11,800 lacs towards discharge of the said consideration. The resultant excess of consideration over the cost of land transferred amounting to Rs. 11,676.86 lacs has been recognised in the statement of profit and loss for the year ended March 31, 2013 and has been disclosed as "Profit on sale of Land to Simbhaoli Sprits Limited” under the head exceptional item in the Statement of Profit and Loss.

16. During the year, to control and consolidate the shareholding in Uniworld Sugars Private Limited (USPL), the Company has issued 32,00,000 8 % cumulative redeemable preference shares of Rs 100 each amounting to Rs. 3200 lacs to the specified promoters and select investors in consideration of purchase of 80,00,000 fully paid up equity shares of Rs 10 each in USPL as a consideration of Rs 3,200 lacs (Rs. 40 per share). Subsequent to purchase of these shares, the investment of the Company and its associates in USPL has increased to 2,87,43,950 shares of Rs 10 each constituting 50% in the share capital of USPL

17. The current financial year is for twelve months from April 1, 2012 to March 31, 2013 whereas the corresponding previous period figures are for a period of eighteen months from October 1, 2010 to March 31, 2012. Accordingly, revised schedule VI became applicable from the financial year commencing from April 1, 2012. Therefore, previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/disclosure and the corresponding figures of previous period are not directly comparable with those of current year.

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Mar 31, 2012

1. The Scheme of Arrangement (SOA) under Section 391 to 394 of the Companies Act, 1956, has been sanctioned by the Hon'ble High Court of Allahabad vide its Order dated September 17, 2012. The SOA became effective on September 20, 2012, on filing of the certified copy of the Order of the High Court with the Registrar of Companies, Uttar Pradesh and Uttarakhand and consequent thereto:

a) The undertaking of Simbhaoli Distillery Division (SDD) including all assets, liabilities, rights, obligations and brands has been transferred to and vested in Simbhaoli Spirits Limited (SISPL), a subsidiary company incorporated on April 4, 2011 as a going concern on a slump sale basis for a consideration of Rs. 13,600 lacs with effect from October 1, 2010, the appointed date.

c) SISPL would allot 17,000,000 equity shares of the face value of Rs.10 at a premium of Rs. 70 each credited as fully paid-up to the Company. Pending allotment of such shares, the consideration receivable has been disclosed in "Other Current Assets". The resultant excess of consideration over the book values of SDD undertaking transferred, amounting to Rs. 11,817.37 lacs has been shown as "Profit on transfer of SDD Undertaking" in the profit and loss account.

d) The profit and loss account of the Company for the 18 months period ended March 31, 2012 includes transactions of SDD for the same period. Following exclusions in respect of the operations of the SDD for the above mentioned period have been made for the purposes of these accounts, since the said business, during this period, was being run and managed in trust by the Company on behalf of SISPL.

e) The Company has set-off deferred tax assets recognized in respect of brought forward business losses/unabsorbed deprecation aggregating Rs. 6,759.99 lacs against the Securities Premium Account amounting to Rs. 6,759.99 lacs appearing in the books of account as on October 1, 2010, the appointed date.

2. i) Contingent liabilities not provided for:

Claims against the Company not acknowledged as debts Rs. 1,304.53 lacs (previous year Rs. 707.30 lacs).

(Rs. In lacs)

Description As at March As at September 31, 2012 30, 2010

Sales Tax/Trade Tax Act 10.43 12.60

State Excise Act 17.34 17.34

Central Excise Act 515.53 239.96

Income tax 316.73 316.73

Others 444.50 120.67

Total 1,304.53 707.30

All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not in the opinion of the management, have a material effect on results of operations or financial position of the Company.

3. Estimated amount of contracts (net of advances) remaining to be executed on capital account Rs. 28.83 lacs (previous year Rs. 304.92 lacs). Further, the Company/Affiliates have to invest Rs. 2,300 lacs (Previous year Rs. Nil) in Uniworld Sugars Private Limited (Joint venture).

4. During the year ended March 31, 2006, the Company had issued Zero Coupon Foreign Currency Convertible Bonds (FCCB) aggregating US$ 33 million (Rs.14,685 lacs at issue). Out of these, during the previous years, FCCB aggregating US$ 31.11 million (Rs.13,844 lacs) have been repurchased and cancelled and during the current period the balance FCCB aggregating US$ 1.89 million (Rs. 841 lacs) have been redeemed in accordance with the terms in the letter of offer.

5. Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the "The Micro, Small and Medium Enterprises Development Act, 2006" is Rs 30.64 lacs (previous year Rs. 1.01 lacs). Further the Company has not received any claim for interest under the terms of the "The Micro, Small and Medium Enterprises Development Act, 2006".

6. Employee Benefits

The Company has classified the various benefits provided to employees as under:-

a) Defined contribution plans:

i) Superannuation fund

ii) Provident fund

b) Defined benefits plans

a) Gratuity

b) Compensated absences – Earned Leave/ Sick Leave/ Casual Leave

In accordance with the Accounting Standard 15 (revised 2005), actuarial valuation was done in respect of the aforesaid defined benefit plans and details of the same are given below:

7. Revenue expenditure on research and development Rs. 14.18 lacs (previous year Rs. 7.99 lacs).

8. Related Party disclosures under Accounting Standard 18

A. Name of related party and nature of related party relationship.

Subsidiaries:

- Simbhaoli Global Commodities DMCC (DMCC),

- Integrated Casetech Consultants Private Limited (ICCPL) with effect from November 29, 2010

- Simbhaoli Power Limited (SPL) with effect from June 21, 2011

- Simbhaoli Spirits Limited (SISPL) with effect from April 04, 2011

- Uniworld Sugars Private Limited (USPL) with effect from February 25, 2011 and upto March 20, 2012.

Joint Venture: Uniworld Sugars Private Limited (USPL) with effect from March 21, 2012

Co-venturer: ED & F Man Holdings BV (ED & F Man) with effect from March 21, 2012

Key Management Personnel: Mr.G.M.S.Mann, Mr.Gurpal Singh, Dr.G.S.C.Rao, Mr. Sanjay Tapriya and Ms. Gursimran Kaur Mann (with effect from March 24, 2011).

Relatives of Key management personnel:

Mrs. G.R. Lakshmi (wife of Dr.G.S.C.Rao), Mrs. Mamta Tapriya (wife of Mr. Sanjay Tapriya), Mr. B.D.Tapriya (father of Mr. Sanjay Tapriya), Mr. Govind Singh Sandhu (brother of Mr. Gurpal Singh) and Mr. Angad Singh (son of Mr. Gurpal Singh).

Enterprise over which key management personnel exercise significant influence:

- Dholadhar Investments Private Limited (enterprise over which Mr.G.M.S.Mann exercises significant influence).

- Pritam Singh Sandhu Associates Private Limited (enterprise over which Mr. Gurpal Singh exercises significant influence).

- Uniworld Sugars Private Limited (enterprise over which Mr. Sanjay Tapriya and Dr.G S C Rao exercise significant influence upto February 24, 2011).

9. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" notified by the Companies (Accounting Standard) Rules, 2006, the Company's business segments include: Sugar, Alcohol and Power.

B. Geographical segments:

Since the Company's activities/operations are primarily within the country and considering the nature of products it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 1 of schedule 17 "Notes to the Accounts", the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include income taxes. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two or more segments is allocated to the segments on a reasonable basis.

c) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

10. The proceeds of 2,263.49 lacs from warrants/shares issued and allotted to specified promoters/investors of the Company were utilized for capital expenditure/ working capital requirement of the Company as per the resolutions passed by the shareholders in the general meetings.

11. As at March 31, 2012 outstanding export obligation against advance license scheme (ALS) is 2,891 metric tonnes (previous year 40,800 metric tonnes). The management is confident that the export obligation shall be fully met and no loss is foreseen in complying with such obligation.

12. A vessel carrying 22,500 MT of raw sugar purchased by the Company sank in July 2009 for which an insurance claim for Rs. 4,780 lacs was filed with the insurance Company. Following the repudiation of insurance claim by Cargo insurers, in an arbitrary manner, the Company has initiated legal proceedings against the insurer in India and vessel owner in London. Subsequent to the period end, the Company, in the London proceedings, has accepted and received a compensation of USD 98 lacs (Rs.5,515 lacs) towards the cost of raw sugar, interest loss and legal costs. The Company is continuing to pursue the ongoing legal proceedings against the cargo insurer for balance Rs. 769 lacs. Based on expert advice, management is confident that the proceedings against insurer would be settled in favour of the Company and no loss would arise in this regard.

13. The Company's net worth has been substantially eroded and the Company has made cash losses during the eighteen months period ended March 31, 2012. During the last two years the Indian sugar industry had faced difficulties on account of lower realization of sugar and higher sugar cane prices particularly in respect of sugar mills located in Uttar Pradesh. During the current season also, the country had the large surplus of sugar resulting in lower sugar realization, under recovery of cost of production and higher finance cost leading to operating/ cash loss and consequent substantial erosion of the Company's net worth. The Company has initiated a number of measures which includes business and financial restructuring comprising of transfer of potable alcohol and power undertakings of the Company to separate SPVs, disinvestments of the shares in such SPVs, fresh capital infusion and Company's foray into sugar refining business in joint venture with a global major etc. to de-risk its businesses and improving its financial position. The transfer of potable alcohol undertaking and formation of joint venture for sugar refining business has been completed. The State and Central Governments have initiated various steps to strengthen the sugar industry like opening sugar exports under OGL and working towards decontrol of the sector. The Management of the Company is confident about the successful completion of its aforesaid business and financial restructuring initiatives, the outcome of the steps being initiated by the State and Central Governments for the sugar industry and the Company's ability to generate sufficient cash flows to meet its future obligations. Accordingly, these financial statements have been prepared by the Company on a going concern basis.

14. Relying upon the future projections prepared based upon the restructuring plans under implementation and taken on record by the Board of Directors, deferred tax asset (net) amounting to Rs. 4,747.83 lacs as at March 31, 2012 relating to unabsorbed depreciation and carry forward business losses has been recognized as, the Management of the Company believes that there is a virtual certainty that sufficient future taxable income will be available against which such asset would be realized.

15. The Company had taken approval from the shareholders of the Company under section 293(1)(a) of the Companies Act, 1956 to hive off its power businesses to Simbhaoli Power Limited, its subsidiary to facilitate expansion in power generation/export capacities. The transfer of assets was conditional upon the finalization of the business restructuring for giving effect to the transfer, capital contribution by a select investor and approvals from the lenders for financing expansion plan within a given time frame. Therefore, pending completions of the conditions, no effect/disclosures of such hiving off was considered necessary in these financials.

16. Donations include Rs. 1.70 lacs (Previous year Rs. Nil) in excess of limits specified in section 293 (1)(e) of the Companies Act, 1956 and are subject to shareholders' approval in the ensuing annual general meeting.

Uniworld Sugars Private Limited is a 50:50 Jointly controlled entity between E D & F Man Holdings BV, The Netherlands (EDFM) and the Company as per the terms set under the Share Subscription and Shareholders Agreement dated January 25, 2011 and subsequent amendments therein (collectively referred to as "Joint Venture Agreements" or "JVA"). The Company has been incorporated to undertake the business of refining of sugar and molasses, the cogeneration of power and all other activities ancillary or identical thereto in India and trading of sugar and molasses both within the Indian and overseas markets.

The Company's share of Assets and Liabilities as at March 31, 2012 and Income and Expenditure for the period ended March 31, 2012 (Without elimination of the effect of transactions between the Company and the

17. The figures for the current period are for a period of eighteen months from October 1, 2010 to March 31, 2012 and exclude the figures of SDD undertaking from October 1, 2010 to March 31, 2012, transferred under the Scheme of Arrangement whereas the corresponding previous year figures are for twelve months from October 1, 2009 to September 30, 2010. As such, corresponding figures for the previous year are not directly comparable with those of current period.

18. Previous year figures have been regrouped/ recast wherever necessary.

Signatures to Schedules 1 to 18.

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Sep 30, 2010

1. i) Contingent liabilities not provided for:

Claims against the Company not acknowledged as debts Rs. 707.30 lacs (previous year Rs. 147.66 lacs).

(Rs. in lacs)

Description As at September As at September 30,2010 30, 2009

Sales Tax/Trade Tax Act 12.60 9.87

State Excise Act 17.34 9.26

Central Excise Act 239.96 11.89

Income tax 316.73 -

Others 120.67 116.64

Total 707.30 147.66

All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings, when ultimately concluded will not in the opinion of the management, have a material effect on results of operations or financial position of the Company. ii) Corporate guarantee of Rs. Nil (previous year Rs. 10,000.00 lacs) given by the Company to banks on behalf of farmers :

iii) Consequent to redemption of outstanding preference share capital aggregating Rs. 216.00 lacs, the cumulative preference dividend arrears of Rs. 77.76 lacs stands extinguished.

2. Estimated amount of contracts (net of advances) remaining to be executed on capital account Rs. 304.92 lacs (previous year Rs. 459.40 lacs).

3. (a) During the year ended March 31, 2006, the Company had issued Zero Coupon Foreign Currency Convertible Bonds (FCCB) aggregating US$ 33 million (Rs.14,685 lacs at issue). The bondholders have an option to convert these bonds into shares, at the conversion price of Rs. 153 (including share premium of Rs. 143) per share {initial conversion price of Rs.170 (including share premium of Rs.160) per share} with a fixed rate of exchange on conversion of Rs.44.1050 = US $ 1, at any time on or after April 10, 2006 up to February 9, 2011. The Company has an option to convert principal amount of the bonds between March 10, 2007 and March 10, 2011, subject to the satisfaction of certain conditions. Unless previously converted, redeemed or repurchased and cancelled, the bonds fall due for redemption on March 11, 2011 at 137.033% of their principal amount.

(b) During the year, the Company has bought back FCCB having a face value of US$ 1.50 Million (previous year US$ 29.61 Million) and cancelled the same. Consequent thereto the Company has:

(i) written back the premium provision aggregating Rs. 180.83 lacs (previous year Rs. 2,438.33 lacs) attributable to these FCCB by crediting back Rs. 73.05 lacs (previous year Rs. 700.14 lacs) {(net of tax of Rs. 37.61 lacs (previous year Rs. 360.52 lacs)} to securities premium account and Rs. 70.17 lacs (previous year Rs. 1,377.67 lacs) to concerned fixed assets to which it was capitalized in earlier years, and

(ii) Credited gain amounting to Rs. 138.51 lacs (previous year Rs. 7,220.73 lacs) arising on buy back and cancellation of these FCCB under the head "Other Income" in schedule 14 and Rs. 27.34 lacs (previous year Rs. 1,351.39) to concerned fixed assets to which it was capitalized in earlier years.

4. Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the " The Micro, Small and Medium Enterprises Development Act, 2006" is Rs 1.01 lacs (previous year Rs. 0.10 lac). Further no interest during the year has been paid or is payable under the terms of the " The Micro, Small and Medium Enterprises Development Act, 2006".

5. Employee Benefits

The Company has classified the various benefits provided to employees as under:-

a) Defined contribution plans:

i) Superannuation fund

ii) Provident fund

b) Defined benefits plans

a) Gratuity

b) Compensated absences - Earned Leave/ Sick Leave/ Casual Leave

6. Revenue expenditure on research and development Rs. 7.99 lacs (previous year Rs. 6.71 lacs).

7. Related Party disclosure under Accounting Standard 18

A. Name of related party and nature of related party relationship.

Subsidiary: Simbhaoli Global Commodities DMCC

Key Management Personnel: Mr. G M S Mann, Mr.Gurpal Singh, Dr. G S C Rao and Mr. Sanjay Tapriya.

Relatives of Key management personnel: Mrs. G R Lakshmi (wife of Dr. G S C Rao), Mrs. Mamta Tapriya (wife of Mr. Sanjay Tapriya), Mr. B D Tapriya (father of Mr. Sanjay Tapriya), Mr. Govind Singh Sandhu (brother of Mr. Gurpal Singh), Ms. Gursimran Kaur Mann (daughter of Mr. G M S Mann) and Mr. Angad Singh (son of Mr. Gurpal Singh).

Enterprise over which key management personnel exercise significant influence: Dholadhar Investments (P) Ltd. (enterprise over which Mr. G M S Mann exercises significant influence), Pritam Singh Sandhu Associates Pvt. Ltd (enterprise over which Mr. Gurpal Singh exercises significant influence) and Uniworld Sugars Limited (enterprise over which Mr. G M S Mann, Dr. G S C Rao and Mr. Sanjay Tapriya exercise significant influence).

8. Segment reporting

A. Business segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" notified by the Companies (Accounting Standard) Rules, 2006, the Companys business segments include: Sugar, Alcohol and Power.

B. Geographical segments:

Since the Companys activities/operations are primarily within the country and considering the nature of products it deals in, the risks and returns are same and as such there is only one geographical segment.

C. Segment accounting policies:

In addition to the significant accounting polices applicable to the business segments as set out in note 1 of schedule 17 "Notes to the Accounts", the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include income taxes. While most of the assets/liabilities can be directly attributed to individual segments, the carrying amount of certain assets/liabilities pertaining to two or more segments is allocated to the segments on a reasonable basis.

c) Inter segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated on consolidation.

9. In the previous year, pursuant to the Notification dated March 31, 2009 issued by The Ministry of Corporate Affairs, amending Accounting Standard (AS) 11 - Effects of Changes in Foreign Exchange Rates, the Company had chosen to exercise the option under paragraph 46 inserted in the standard by the notification. Accordingly with retrospective effect from 1st October 2007 onwards exchange differences on all long term monetary items to the extent such items were used for financing fixed assets were added to/subtracted from the cost of those fixed assets and depreciated over the balance useful life of the assets. During the year, the Company has deducted from fixed assets Rs. 501.28 lacs (previous year added Rs. 466.27 lacs) being the exchange differences on long term monetary items relatable to the acquisition of fixed assets. As a result of such change, net loss before tax and after tax is higher by Rs. 501.28 lacs and Rs. 334.77 lacs respectively (previous year profit before tax and after tax lower by 129.63 lacs).

10. On the basis of future projections taken on record by the Board of Directors of the Company after considering the recent improvements in sugar prices and margins, the sugar inventory available with the Company for disposal, changing government policies, as well as the additional capacities set up in the previous years for production of sugar, power and ethanol resulting in de-risking of the business operations and given the cyclicality of sugar industry and other steps being taken, the management is confident that there is a virtual certainty that sufficient future taxable income will be available against which deferred tax asset (net) of Rs. 7,040.49 lacs will be realized in the future.

11. On July 23, 2009 a vessel carrying 22,500 MT of raw sugar purchased by the Company sank near South Africa in relation to which an insurance claim for Rs. 4,780.00 lacs has been filed with the insurance Company. The Company has also simultaneously obtained undertaking from the London Steamship Owners Mutual Insurance Association Limited, London, the P&I club of vessel owner to compensate the loss suffered by the Company to the extent of USD 14.5 million, in case arbitration proceedings will be decided in favour of the Company. The arbitration proceedings have been progressing as per schedule.

The Insurance Company vide letter dated July 30, 2010 has repudiated the aforesaid insurance claim. The Company has initiated legal proceedings against this decision. The management, based on the facts of the case and opinion received from the legal experts, is confident that the insurance claim would be settled in favour of the Company and no loss would arise on settlement thereof.

12. The Company has accounted for cane purchases for sugar season 2007-08 at Rs. 110 per quintal, the rate at which it has made payment to the cane growers as per the interim order of the Honble Supreme Court, against the State Advised Price of Rs. 125 per quintal fixed by the Uttar Pradesh State Government. Necessary adjustments will be made in accordance with subsequent orders of the Honble Court in the matter.

13. The proceeds of Rs. 10.97 Lacs from 28,140 stock options/ shares issued and allotted to eligible employees of the Company were utilized for capital expenditure/working capital requirement of the Company as per the resolutions passed by the shareholders in the general meetings.

14. During the earlier years, the Company, without payment of customs duty, had purchased imported raw sugar aggregating 1,32,013 metric tonnes for Rs 15,225.71 lacs for conversion into white sugar. In terms of the advance license(s) granted for this purpose by the office of Director General of Foreign Trade and subsequent extensions therein, the Company is required to complete the export of white sugar aggregating 1,06,325 metric tonnes by March 31, 2011 and 19402 metric tones by February 17, 2012. As at September 30, 2010 outstanding export obligation is 40,800 metric tonnes. The management is confident that the export obligation shall be fully met and no loss is foreseen in complying with such obligation.

15. During the second half of the current year, due to a steep decline in the sugar prices on account of change in sugar production estimates in India, the Companys operations were adversely affected due to under recovery of cost of production as well as marking to net realizable value of inventory resulting in significant operating/cash losses to the Company. However, in view of the improved industry outlook on account of better sugar prices accompanied with significant reduction in inputs costs and after considering the remedial measures being taken by the Company for improving the financial position, the management is confident about the operation outlook for the ensuing year.

16. Previous year figures have been regrouped/ recast wherever necessary.