Terms/ rights attached to equity shares

The company has only one class of equity shares having par value of INR 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends, if any, in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

Terms/ rights attached to preference shares

The Preference shares issued by the company are non-convertible. Preference shares will be redeemed on April 29, 2027 at the price of INR 10/- per share. The Preference shares carry a dividend of 8% per annum payable at the discretion of the company and subject to approval of the lenders. The dividend rights are non-cumulative. The preference shares rank ahead of the equity shares in event of liquidation. The presentation of liability and equity portion of these shares is explained in the summary of significant accounting policy.

Note 1 : At March 31, 2024 and March 31, 2023, there were 4,10,93,424 no. of redeemable preference shares in issue. Each share has a par value of INR 10. Preference shares will be redeemed on April 29, 2027 at par value. The preference shares carry a

dividend of 8% per annum, payable yearly in arrears as on 31 March. The dividend rights are non-cumulative. The preference shares rank ahead of the equity shares in the event of a liquidation. The presentation of the liability and equity portions of these shares is explained in the summary of significant accounting policies.

Note: Nature of Securities for the aforesaid secured loans repayable on demand

(a) Zila Sahakari Bank Limited Ghaziabad - For Units in Uttar Pradesh

Working Capital loans from Zila Sahakari Bank Ltd. Ghaziabad are secured by pledge of crystal sugar and hypothecation of all other current assets at Sugar Units in District Moradabad and Rampur (UP) respectively.

(b) UCO Bank - For Units in District Amritsar & Tarantaran

Working Capital Loans from UCO Bank are secured by hypothecation of stocks of raw materials, Stock in process and finished goods lying in the borrower's godowns, factory situated at Punjab Units, Stock-in-transit and Stock lying at other places with prior permission of the bank. The limits are further secured by hypothecation of Trade receivables

(c) Union Bank of India - For Units in District Amritsar & Tarantaran

Overdraft limit from Union bank of India is secured against fixed deposit exclusively in favour of bank.

(d) Uttar Pradesh Co-op. bank Limited, Lucknow - For Units in Uttar Pradesh

Working capital limits from Uttar Pradesh Co-op. bank Limited, Lucknow are secured by pledge of sugar stock at sugar units in district Moradabad and Rampur respectively and stock of Finished Goods & Raw Material related to Ethanol lying at Distillery unit in district Moradabad. The limits are also secured by hypothecation of current assets of the company on first pari-passu charge basis with IREDA, UCO Bank and Zila Sahakari Bank Limited, Ghaziabad except for trade receivables of Power relating to Uttar Pardesh Power Corporation Limited which are charged exclusively in favour of IREDA and sugar stock pledged to Zila Sahakari Bank Limited, Ghaziabad.

(e) Overdraft limit from ICICI Bank is secured against fixed deposit exclusively in favour of bank.

(f) Working Capital Loans from Banks are further secured by personal guarantee of promoters / directors.

26. Contingent Liabilities, Commitments and Contingencies (to the extent not provided for)

A) Claims against the company not acknowledged as debt

Liabilities in respect of Income Tax and Sales Tax have been accounted for on the basis of respective returns filed with the relevant authorities. Additional demand, if any, arising at the time of assessment shall be accounted for in the year in which the assessment is completed. The status of completed assessments is as under: -

a) Income Tax assessments have been completed up to the assessment year 2022-23. The Followings demands have been raised by the Income Tax Department for which the Company has preferred an appeal which are pending with Different Forums: -

i) In respect of Sugar Units in Uttar Pradesh, the Excise & Taxation department has raised demand on account of VAT on molasses for INR 35.41 Lakhs, 201.31 lakhs, 103.99 lakhs, 178.90 lakhs, 122.52 Lakhs, 191.09 Lakhs and 34.20 Lakhs for the Financial years 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 respectively. However, as per the order of the Hon’ble Allahabad High Court dated 30 March, 2010 the said VAT has not been deposited with the Excise & Taxation Department. The Excise& Taxation Department, Uttar Pradesh has filed an appeal with Hon’ble Supreme Court of India against such order of the Hon’ble High Court of Allahabad.

ii) In respect of Distillery unit in Punjab, the office of Excise & Taxation Commissioner, Punjab raised a demand of INR 348.47 lakhs (INR 55.69 lakhs for VAT and INR 292.78 lakhs for CST) vide its order dated 30 April, 2015 for FY 13-14 against which the Company has filed appeal with DETC (Appeals) Amritsar

c) In respect of its Sugar unit at Moradabad, the company has deposited INR 49.89 Lakhs in FY 2010-11 on account of Excise Duty under protest against alleged demand of Excise duty amounting to INR 204.61 lakhs and the same has been shown under the head Payments of Taxes under protest/appeal under Other Assets (Refer note no 8). The Company has filed an appeal with CESTAT (Central Excise & Service Tax Appellant Tribunal) against the order of Commissioner Central Excise.

d) In respect of its Sugar unit at Moradabad, the company has deposited INR 1.21 Lakhs on account of Gst demand amounting to INR 12.19 lakhs and the same has been shown under the head Payments of Taxes under protest/ appeal under Other Assets (Refer note no 8). The Company has filed an appeal with Appellant authority.

e) Financial Guarantees

The Company has given guarantees for term loan availed by the Company in which relative of the Directors are interested to a maximum amount of INR 9956 Lakhs (P.Y. INR 9956 Lakhs). The carrying amount of the related financial guarantees contract were INR 783.51 Lakhs at 31 March 2024. (P.Y. INR 1081.39 Lakhs).

B. Commitments

a) Bank Guarantees/LC's issued INR 466.87 Lakhs (Previous Year INR 424.87 Lakhs) are secured by pledge of FDRs of INR 127.33 Lakhs (Previous Year INR 100.22 Lakhs) given by the Company.

27. CORPORATE SOCIAL RESPONSIBILITY

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility (“CSR”). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. Details are as under:-

Average net profit of the company as per section 135(5): INR 11635.42 Lakhs

Two percent of average net profit of the company as per section 135(5) : INR 232.71 Lakhs

Note:

• Mr. Suresh Kumar Jain was appointed as Independent Director w.e.f 1^st October 2023 and has resigned w.e.f 8^th Feb 2024.

• Mr. Surjeet Kaushal was appointed as Independent Director w.e.f 1^st October 2023.

• Mr.Tara Chand Meenia has resigned w.e.f 20^thJuly 2023 as Independent Director.

• Mr. Madhur Bain Singh was appointed as Company Secretary w.e.f 27^th April 2023.

The amounts disclosed in the table relating to employee benefits are the amounts recognised as an expense during the reporting period related to key management personnel. The remuneration to the Key Management Personnel does not include the provision for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2023: INR Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

30. Deferred Tax:

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

The Company has Unabsorbed Depreciation- NIL (PY-INR NIL Lakhs).

During the year the Company has recognized Deferred tax liability of INR 330.72 Lakhs.

31. Employee Benefits

The Company has a defined benefit gratuity plan. Under Gratuity Plan, every employee who has completed five years or more of service gets a gratuity on departure at 15 days of last drawn salary for each completed year of service.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. The level of benefits provided depends on the member's length of service and salary at retirement age. The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset.

Description of Risk Exposures

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks as follow:

i) Salary Increases- Actual salary increases will increase the Plan's liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

ii) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan’s liability.

iii) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

iv) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability

32. Segment Information:

A. Description of the segments and principal activities:

The Company's executive committee examines the Company's performance from a product and geographic perspective and has identified three reportable segments of its business:

a. Sugar Manufacturing: (India - Punjab and Uttar Pradesh)

This part of the business manufactures and sells sugar, molasses and bagasse. Whereas sugar is main product; others are the bye products and are produced at various stages of the production of the sugar. The Company has sugar manufacturing facilities at three locations in India viz. Buttar (Punjab), Moradabad and Rampur (Uttar Pradesh). The committee monitors the performance in the respective region separately. While the committee receives separate reports for each region, the facilities have been aggregated in to one reportable segment as they have similar average gross margins and similar expected growth rates.

b. Ethanol/ENA Manufacturing: (India - Punjab and Uttar Pradesh)

This part of business manufactures Ethanol & Liquor. The basic raw material for Ethanol & Liquor is molasses and grain. At present the company has two manufacturing facilities in India viz Laukha (Punjab), Belwara (Uttar Pradesh). At Laukha, Punjab location the company is manufacturing Ethanol as well as liquor where as at Belwara Uttar Pradesh manufacturing facility the company is manufacturing Ethanol only.

c. Power Generation: (India - Punjab and Uttar Pradesh)

This part of the business consumes the bye product bagasse from sugar process and co generates the power. The segment also procures fuel from outside to generate power. After meeting the captive requirements of the respective sugar unit the power is exported the respective State Grids under long term Power Purchase Agreements (PPA).

The comparison of carrying value and fair value of financial instruments by categories that are not measured at fair value are as follows:

The management assessed that trade receivables, cash and cash equivalents, other bank balances, loans and advances to related parties, interest receivable, trade payables, capital creditors, other current financial assets and liabilities are considered to be the same as their fair values, due to their short term nature.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

34. Financial risk management objectives and policies

The Company has instituted an overall risk management programme which also focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. Financial risk management is carried out by Finance department under policies approved by the Board of Directors from time to time. The Finance department, evaluates and hedges financial risks in close co-operation with the various stakeholders. The Board of Directors approves written principles for overall financial risk management, as well as written policies covering specific areas, such as credit risk, use of derivative financial instruments and non-derivative financial instruments.

The Company is exposed to market risk, credit risk and liquidity risk. These risks are managed pro-actively by the Senior Management of the Company, duly supported by various Groups and Committees.

(a) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company employs prudent liquidity risk management practices which inter alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Given the nature of the underlying businesses, the corporate finance maintains flexibility in funding by maintaining availability under committed credit lines and this way liquidity risk is mitigated by the availability of funds to cover future commitments. Cash flow forecasts are

prepared and the utilized borrowing facilities are monitored on a daily basis and there is adequate focus on good management practices whereby the collections are managed efficiently. The Company while borrowing funds for large capital project, negotiates the repayment schedule in such a manner that these match with the generation of cash on such investment. Longer term cash flow forecasts are updated from time to time and reviewed by the Senior management of the Company.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) including deposits with banks, foreign exchange transactions and other financial assets.

(i) Trade receivables

Customer credit risk is managed subject to the Company's established policy, procedures and control relating to customer credit risk management. Management evaluate credit risk relating to customers on an ongoing basis. Receivable control management team assess the credit quality of the customer, taking into account its financial position, past experience and other factors. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on group\category basis. The calculation is based on exchange losses, historical data and available facts as on date of evaluation. Trade receivables comprise a customer base including Sugar dealers, state electricity board, oil manufacturing companies apart from related to distillery. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposit

Credit risk from balances with banks and financial institutions is managed by the Company's Finance department team in accordance with the Company's policy. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counter party's potential failure to make payments. Credit limits of all authorities are reviewed by the management on regular basis. All balances with banks and financial institutions is subject to low credit risk due to good credit ratings assigned to the Company.

(c) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings. The sensitivity analyses in the following sections relate to the position as at March 31, 2024 and March 31, 2023. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of at March 31, 2024 and March 31, 2023.

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue, expense or capital expenditure is denominated in foreign currency). The company is not exposed to material foreign currency risk.

(e) Interest rate risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's debt obligation at floating interest rates which is not material.

(f) Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of raw material and therefore requires a continues supply. The Company operations may impact due to changes in prices of those raw materials.

35. Capital Management

For the purpose of the Company’s capital management, capital includes issued equity attributable to the equity shareholders of the Company, Liability Component of compound financial instrument (CFI), security premium and all other equity reserves. The primary objective of the Company’s capital management is that it maintains an efficient capital structure and maximize the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents, other bank balances.

36. In respect of Sugar Unit in Punjab, the Department has raised the demand for Purchase Tax on cane for INR 140.40 lakhs, 297.22 lakhs, 347.25 lakhs, 227.62 lakhs, 90.52 lakhs and 381.98 lakhs for the Financial years 2005-06, 2008-09, 2009-10, 2010-11, 2011-12 and 2013-14 respectively. Out of which 22.62 lakhs for the F.Y-2011-12 and 44.00 lakhs for the F.Y-2013-14 has been paid respectively. The Company has preferred appeals against such orders with the appellate authorities.

37. Company as a Lessee

As required by Ind AS 116 ‘Lease’ the company has recognised “right of use” assets which have been amortized over the term of lease. Further, finance cost in respect of corresponding lease liabilities has been measured and considered in these financial statement

The Company’s lease asset class primarily consist of leases for building & vehicles.

The Company applied the exemption not to recognize Right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

Depreciation charge for Right-of-use assets is included under depreciation and amortization expense in the Statement of Profit and Loss. Further, to above, the Company has certain lease arrangement on short term basis, expenditure on which has been recognised under line item “Rent” under Other expenses. The effect of adoption of Ind AS 116 'Leases’ is not material on the profit before tax, profit for the year and earnings per share.

(v) Previous year figures have been recasted/regrouped/rearranged wherever necessary to make them comparable with

that of current year.

(vi) Additional Regulatory Information

(a) Title deeds of all the immovable properties (other than the properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the company. Further, the company does not hold any immovable property jointly with others.

(b) The company has not revalued its Property, Plant and Equipment during the financial year 2023-24. Therefore, the disclosure as to whether the revaluation is based on the valuation by a registered valuer as defined under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017 is not required.

(c) The company is not granted any Loan or Advances in the nature of loans to promoters, directors, KMPs and related parties (as defined under the companies Act 2013) either severally or jointly with any other person, that are Repayable on demand or are Without specifying any terms or period of repayment.

(d) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibitions) Act, 1988 and rules made thereunder.

(e) The company has borrowed working capital facilities from Uttar Pradesh Co-operative Bank Ltd and Zila Sahakari Bank Ltd, Ghaziabad and UCO Bank on the basis of security of current assets and the quarterly returns or statements of current assets filed with the said banks are in agreement with the books of accounts.

(f) The company is not declared by any bank or financial institutions or other lender as a willful defaulter.

(g) The company has not entered into any transaction with the companies stuck off under section 248 of the companies Act, 2013.

(h) The company has filed registration of charges or satisfaction with the registrar of companies within the statutory period as per the companies Act, 2013.

(i) The company has not traded or invested in crypto currency or virtual currency during the financial year.

(j) Key Ratio